<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 9, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VENTURE HOLDINGS COMPANY LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
MICHIGAN 3714 38-3470015
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
33662 JAMES J. POMPO DRIVE
FRASER, MICHIGAN 48026
810-294-1500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES E. BUTLER, JR.
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
VENTURE HOLDINGS COMPANY LLC
33662 JAMES J. POMPO DRIVE
FRASER, MICHIGAN 48026
810-294-1500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
FREDRICK M. MILLER, ESQ. PAUL LIEBERMAN, ESQ.
DYKEMA GOSSETT PLLC PAUL LIEBERMAN, P.C.
400 RENAISSANCE CENTER 1471 S. WOODWARD AVENUE, SUITE 250
DETROIT, MICHIGAN 4243-1668 BLOOMFIELD HILLS, MICHIGAN 48302
(313) 568-6975 (248)335-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
- ---------
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11% Senior Notes Due 2007....... $125,000,000 100% $125,000,000 $34,750
- --------------------------------------------------------------------------------------------------------------------------------
12% Senior Subordinated Notes
Due 2009...................... $125,000,000 100% $125,000,000 $34,750
- --------------------------------------------------------------------------------------------------------------------------------
Guarantees of 11% Senior Notes
Due 2007...................... (2) (2) (2) (2)
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Guarantees of 12% Senior
Subordinated Notes Due 2009... (2) (2) (2) (2)
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- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(f) solely for the purposes of calculating the
registration fee.
(2) Pursuant to Rule 457(n), no registration fee is required with respect to the
Guarantees of the Senior Notes or the Senior Subordinated Notes registered
hereby.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
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EXACT NAME OF GUARANTOR REGISTRANT JURISDICTION OF PRIMARY STANDARD INDUSTRIAL
AS SPECIFIED IN ITS CHARTER INCORPORATION IRS EMPLOYER IDENTIFICATION NO. CLASSIFICATION CODE NUMBER
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Vemco, Inc. Michigan 38-2737797 3714
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Venture Industries Corporation Michigan 38-2034680 3714
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Venture Mold & Engineering
Corporation Michigan 38-2556799 3714
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Venture Leasing Company Michigan 38-2777356 3714
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Vemco Leasing, Inc. Michigan 38-2777324 3714
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Venture Holdings Corporation Michigan 38-2793543 3714
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Venture Service Company Michigan 38-3024165 3714
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Experience Management LLC Michigan 38-3382308 3714
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Venture Europe, Inc. Michigan 38-3464213 3714
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Venture EU Corporation Michigan 38-3470019 3714
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</TABLE>
<PAGE> 3
SUBJECT TO COMPLETION, DATED JULY 9, 1999
PROSPECTUS
VENTURE HOLDINGS COMPANY LLC [VENTURE LOGO]
OFFER TO EXCHANGE
<TABLE>
<S> <C> <C>
11% SENIOR NOTES DUE 2007 12% SENIOR SUBORDINATED NOTES DUE 2009
FOR ALL OF ITS FOR ALL OF ITS OUTSTANDING
OUTSTANDING AND 12% SENIOR SUBORDINATED NOTES DUE 2009
11% SENIOR NOTES DUE 2007
</TABLE>
TERMS OF THE EXCHANGE OFFER
- Expires 5:00 p.m. New York City time, , 1999, unless
extended.
- All Outstanding Notes that are validly tendered and not validly withdrawn
will be exchanged.
- Tenders of the Outstanding Notes may be withdrawn any time prior to the
expiration of the Exchange Offer.
- Not subject to any condition, other than that the Exchange Offer not
violate applicable law or any applicable interpretation of the Staff of
the Securities and Exchange Commission.
- The Company will not receive any proceeds from the Exchange Offer.
- The exchange of notes will not be a taxable exchange for U.S. federal
income tax purposes.
- The terms of the Exchange Notes and the Outstanding Notes are
substantially identical, except for certain transfer restrictions and
registration rights relating to the Outstanding Notes.
- There is no existing market for the Exchange Notes, and the Company does
not intend to apply for their listing on any securities exchange.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS
PRIOR TO TENDERING THEIR OUTSTANDING NOTES IN THE EXCHANGE OFFER, SEE "RISK
FACTORS" BEGINNING ON PAGE 18.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE NOTES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
July 9, 1999
<PAGE> 4
THE PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS THAT ARE NOT CONTAINED
IN OR DELIVERED WITH THE PROSPECTUS. THESE DOCUMENTS ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST FROM JAMES E. BUTLER, EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, 33662 JAMES J. POMPO DRIVE, FRASER, MICHIGAN 48026, TELEPHONE
NUMBER 810-294-1500. TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY 1999.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 1
Risk Factors................................................ 18
The Exchange Offer.......................................... 28
The Acquisition............................................. 36
Use of Proceeds............................................. 36
Capitalization.............................................. 38
Unaudited Pro Forma Financial Statements.................... 39
Selected Consolidated Financial Data of Venture............. 49
Selected Consolidated Financial Data of Peguform............ 51
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 53
Quantitative and Qualitative Disclosures About Market
Risk...................................................... 63
Business.................................................... 64
Management.................................................. 86
Stock Ownership............................................. 90
Certain Transactions........................................ 90
Description of Certain Indebtedness......................... 94
Description of Exchange Notes............................... 96
Certain U.S. Federal Income Tax Considerations.............. 147
Plan of Distribution........................................ 151
Legal Matters............................................... 151
Experts..................................................... 152
Index to Consolidated Financial Statements.................. F-1
</TABLE>
i
<PAGE> 5
FORWARD-LOOKING STATEMENTS
This Prospectus includes forward-looking statements regarding, among other
things, our financial condition and business strategy. We have based these
forward-looking statements on our current expectations and projections about
future events. While we believe these expectations and projections are
reasonable, such forward-looking statements are inherently subject to risks,
uncertainties and assumptions about us, including, among other things:
- Our substantial leverage;
- Our ability to service our debt;
- Our ability to properly integrate our acquisitions;
- International, national and local general economic and market conditions;
- Demographic changes;
- The size and growth of the automobile market or the plastic automobile
component market;
- Our ability to sustain, manage or forecast our own growth;
- The size, timing and mix of purchases of our products;
- New product development and introduction;
- Existing government regulations and changes in, or the failure to comply
with, government regulations;
- Adverse publicity;
- Our dependence upon original equipment manufacturers;
- Liability and other claims asserted against us;
- Competition;
- The loss of significant customers or suppliers;
- Work stoppages and other labor relations matters;
- Fluctuations and difficulty in forecasting operating results;
- Changes in business strategy or development plans;
- Business disruptions;
- Product recalls;
- Warranty costs;
- The ability to attract and retain qualified personnel;
- The ability to protect technology;
- Retention of earnings;
- Control and the level of affiliated transactions; and
- Other factors referenced in this prospectus.
ii
<PAGE> 6
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
EXCHANGE RATES
When we refer to "dollars," "US$," or "$," we mean United States dollars.
When we refer to "German Marks" or "DEM," we mean German Marks. Except as we say
otherwise herein, conversion of German Marks have been translated to United
States dollars in the financial statements and other information we have
included in this prospectus at the rate of DEM 1.6767 per United States dollar,
the Noon Buying Rate (as defined) as of December 31, 1998. You should not
interpret these conversions as expectations that the German Mark amounts
actually represent such United States dollar amounts or could be converted into
United States dollar amounts at the rates indicated or used, or at any other
rates.
Our debt structure may cause us to encounter currency or exchange risks.
Any devaluation of any local currency used by us against the United States
dollar may have an adverse effect on us, which may be material. See "Risk
Factors -- Substantial Foreign Operations."
The following table provides the German Mark exchange rate, set forth in
DEMs per dollar, solely for your convenience. We do not represent that the DEM
amounts shown in this prospectus could be converted into United States dollars
at such rate or any other rate.
<TABLE>
<CAPTION>
DEMS PER UNITED STATES DOLLAR
---------------------------------------------
YEAR/PERIOD
CALENDAR PERIOD END HIGH LOW AVERAGE(1)
- --------------- ----------- ------ ------ ----------
<S> <C> <C> <C> <C>
1997....................................... 1.7987 1.8905 1.5380 1.7347
1998....................................... 1.6767 1.8565 1.5872 1.7597
1999 (through May 28, 1999)................ 1.8680 1.8774 1.6524 1.7800
</TABLE>
- -------------------------
(1) Average of the noon buying rate in New York City for cable transfers in
DEMs, as certified for customs purposes by the Federal Reserve Bank of New
York (the "Noon Buying Rate"), during the period. On May 28, 1999, the Noon
Buying Rate with respect to the DEM was $1.00 = 1.8680 DEM.
iii
<PAGE> 7
SUMMARY
On May 28, 1999, Venture Holdings Trust and two of its subsidiaries,
Venture Beteiligungs GmbH and Venture Verwaltungs GmbH, acquired Peguform GmbH
(the "Acquisition") for a purchase price of DEM 850 million (approximately
$455.0 million as of May 28, 1999), subject to adjustments. The purchase price
was funded with the proceeds of the sale of the Outstanding Notes together with
borrowings under the new senior credit facility provided to Venture Holdings
Trust by a syndicate of bank lenders (the "New Credit Agreement").
Following the closing of the offering of the Outstanding Notes on May 27,
1999, Venture Holdings Trust effected a Trust Contribution (as defined in the
indentures governing the Outstanding Notes) by contributing its assets,
including the capital stock of the guarantor subsidiaries owned by it (other
than the membership interest in Venture Holdings Company LLC, a wholly-owned
subsidiary of the Trust) to Venture Holdings Company LLC, which assumed all of
Venture Holdings Trust's obligations under the Outstanding Notes and the
indentures, and Venture Holdings Trust was released from such obligations.
This summary highlights the more detailed information and financial
statements, including the notes thereto, appearing elsewhere in this Prospectus.
It may not contain all of the information that you should consider. You should
carefully consider the matters discussed under the caption "Risk Factors." As
used in this Prospectus, unless otherwise stated, the term (1) "Issuer" refers
to Venture Holdings Trust prior to the Trust Contribution and Venture Holdings
Company LLC, as successor to Venture Holdings Trust, after the Trust
Contribution; (2) "Trust" refers to Venture Holdings Trust; (3) "Venture" refers
to the Issuer and its subsidiaries prior to the Acquisition; (4) "Peguform"
refers to Peguform GmbH and its subsidiaries prior to the Acquisition; and (5)
when describing the business of Venture and Peguform, "Company," "our," "us,"
and "we" refer to Venture and Peguform after the Acquisition.
THE EXCHANGE OFFER
On May 27, 1999, we privately placed $125.0 million of 11% Senior Notes due
2007 and $125.0 million of 12% Senior Subordinated Notes due 2009. The
Outstanding Notes are, and the Exchange Notes will be, guaranteed by all of our
wholly-owned domestic subsidiaries.
Simultaneously with the private placement, the subsidiary guarantors and
the Issuer entered into a Registration Rights Agreement with the initial
purchasers of the Outstanding Notes. Under the Registration Rights Agreement, we
must deliver this Prospectus to the holders of the Outstanding Notes and must
complete the Exchange Offer on or before December 8, 1999. If the Exchange Offer
does not take place on or before December 8, 1999, we must pay liquidated
damages to the holders of the Outstanding Notes until the Exchange Offer is
completed. You may exchange your Outstanding Notes for Exchange Notes with
substantially the same terms in this Exchange Offer. You should read the
discussion under the heading "Summary of Terms of the Exchange Notes" and
"Description of Exchange Notes" for further information regarding the Exchange
Notes.
We believe that holders of the Outstanding Notes may resell the Exchange
Notes without complying with the registration and prospectus delivery provisions
of the Securities Act of 1933, if certain conditions are met. You should read
the discussion under the headings "Summary of the Exchange Offer" and "The
Exchange Offer" for further information regarding the Exchange Offer and resales
of the Exchange Notes.
1
<PAGE> 8
THE COMPANY
We are a leading worldwide full-service supplier of high quality molded and
painted plastic parts for automotive original equipment manufacturers, commonly
known as OEMs, and other direct, or "Tier I," suppliers to the OEMs. We rank
among the largest designers and manufacturers of interior and exterior plastic
components and systems to the North American and European automotive markets.
Exterior products include such items as front and rear bumper fascias and
systems, body side moldings, hatchback doors, fenders, grille opening panels and
reinforcements, farings, wheel lips, spoilers and large body panels such as
hoods, sunroofs, doors and convertible hardtops. Interior products include
instrument panel systems, door panels, airbag covers, side wall trim,
garnishment molding systems and consoles. On a pro forma basis for the twelve
months ended December 31, 1998, our net sales totaled $1,933.5 million and our
Adjusted EBITDA (as defined) totaled $195.1 million, and on a pro forma basis
for the three months ended March 31, 1999 (three months ended December 31, 1998
for Peguform), our net sales totaled $511.7 million and our EBITDA totaled $49.8
million.
Our principal customers include every major North American OEM, eleven of
the twelve major European OEMs, several major Japanese OEMs, and leading Tier I
suppliers, as detailed below:
<TABLE>
<CAPTION>
TIER I
OEMS SUPPLIERS
---- ---------
<S> <C> <C> <C>
AB Volvo Ford Motor Company PSA Peugeot Citroen Autoliv,
S.A.
Adam Opel AG General Motors Renault SA TRW Inc.
Corporation
Audi AG Isuzu Motors Limited Seat, S.A.
Bayerische Motoren Mitsubishi Motors Skoda Automobilova
Werke AG (BMW) Corporation
DaimlerChrysler AG Nissan Motor Co., Ltd Volkswagen AG
Porsche AG
</TABLE>
We are a full-service supplier and an industry leader in manufacturing
plastic components, modules and systems and in applying new design and
engineering technology to develop innovative products, create new applications
and reduce product development time. We, and our affiliated companies, have the
capability to provide our customers state-of-the-art design and advanced
engineering services 24 hours a day around the world. We operate 57 facilities
in 9 countries, including the United States, Canada, Germany, Spain, France,
Hungary, the Czech Republic, Mexico, and the Netherlands, and expect to start
operations in Brazil in the third quarter of 1999. Our comprehensive
manufacturing capabilities include custom injection molding, automated painting
and assembly, and material and product testing. We also have extensive tool
making capabilities. Our engineering focuses on anticipating actual production
issues and integrating part design with tool design to create an efficient
manufacturing process. We refer to this emphasis as "design for manufacture."
We primarily emphasize the design and manufacture of components and
integrated systems, and manufacture those components and systems as a
sole-source supplier. We currently supply components or systems on over 150
models, including 4 out of 5 of the top selling models in both the United States
and Europe. We supply components for many popular models, such as the Volvo V40
and S40; Audi A4 and TT; BMW 3 Series and 5 Series; DaimlerChrysler A-Class,
"LH" cars (Chrysler LHS, Concorde, 300M and Dodge Intrepid), Dakota and Durango
trucks and "JA" cars (Cirrus, Stratus and Breeze); Ford F-series truck,
Explorer, Expedition, Mustang, Navigator and Windstar; Chevrolet Corvette,
General Motors "M" vans (Astro and Safari), Yukon, Tahoe,
2
<PAGE> 9
Suburban, Grand Am, Grand Prix and GMC and Chevrolet full size vans (Express and
Savana); Porsche 986 and 996; Peugeot 206; Citroen Xsara; Renault Twingo; Seat
Ibiza and Cordoba; Skoda Felicia and Octavia; and Volkswagen Golf, Passat and
Bora. We believe that the depth of our product mix, the diversity of models for
which we are a supplier and our geographic coverage reduce our risks associated
with historical downturns in the automotive industry.
OUR INDUSTRY
The automotive industry has been, and continues to be, significantly
influenced by several trends which we believe will enhance our strategic
position and growth prospects:
- INCREASED OUTSOURCING BY OEMS. In an effort to reduce costs, speed
product design and simplify manufacturing, OEMs have increasingly
outsourced the manufacture of many components and integrated systems
which were previously manufactured internally. Suppliers such as
ourselves have benefited from this outsourcing trend as the aggregate
number and value of components and integrated systems which we
manufacture have increased dramatically.
- CONSOLIDATION OF SUPPLIER BASE BY OEMS. Since the 1980s, OEMs have been
reducing the number of suppliers that may bid for business. As a result
of this trend, the OEMs are focusing on the development of long-term,
sole-source relationships with suppliers who can provide more complex
components and integrated systems on a just-in-time basis, while
maintaining strict, high quality standards. These requirements are
accelerating the trend toward consolidation of the OEMs' supplier base,
as those suppliers who lack the capital or production expertise to meet
the OEMs' needs either exit the business or are merged with larger
suppliers.
- INCREASED EMPHASIS ON PROGRAM MANAGEMENT AND INTEGRATED SYSTEMS. In
conjunction with the supplier base consolidation, OEMs are transitioning
from merely purchasing components to placing responsibility for design,
engineering and manufacturing of full component systems on their
preferred Tier I suppliers. These expanded requirements can best be
addressed by full-service suppliers such as ourselves with sufficient
technological and manufacturing resources to meet such demands.
- INCREASING UTILIZATION OF PLASTIC. OEMs have continued to increase the
use of plastics in their vehicles due to its lighter weight, greater
design flexibility and cost advantage on many models. According to
industry data, the average plastic content per passenger vehicle has
increased from approximately 222 pounds in 1987 to approximately 242
pounds in 1997, and is projected to grow to approximately 266 pounds per
vehicle by 2007. We believe our early involvement as a full-service
supplier to OEMs of plastic components and integrated systems, as well as
our extensive plastics manufacturing technologies, position us to benefit
from the expanded utilization of plastics.
- GLOBALIZATION OF THE OEM SUPPLIER BASE. OEMs are increasingly seeking to
identify preferred suppliers that can meet their needs on a global scale
and not just regionally. To facilitate global expansion by such preferred
suppliers, in certain instances OEMs are committing to sole-source
relationships to enhance the economic viability of new production
facilities. Such relationships also facilitate the efforts of OEMs to
develop certain models for the world automotive market. Our recent
establishment of facilities in Mexico and Brazil will further augment our
already significant capabilities to design and manufacture plastic
components and systems worldwide.
3
<PAGE> 10
THE ACQUISITION
Venture has, for many years, been a key supplier to North American OEMs.
Venture's extensive design and manufacturing expertise, coupled with strategic
acquisitions, has enabled it to diversify its customer base and technological
capabilities, such that Venture has become a leading participant in the supply
of molded and painted interior and exterior plastic components and systems to
North American OEMs. For the five year period ended December 31, 1998, Venture's
net sales grew from $205.6 million to $645.2 million, a compounded annual growth
rate ("CAGR") of 25.7%, and its EBITDA grew from $40.1 million to $94.2 million,
a CAGR of 18.6%. In 1996, Venture expanded its customer relationships and
technological capabilities through strategic acquisitions of Bailey Corporation
("Bailey") and of certain assets of AutoStyle Plastics, Inc. ("AutoStyle" and,
together with Bailey, the "1996 Acquisitions").
A key element of Venture's business strategy has been to increase its
global presence to meet its OEM customers' global needs. Venture considers the
Acquisition an attractive opportunity to further this strategy. Peguform has
been a leading international designer and manufacturer of complete interior
modules, door panels and dashboards and of exterior modules and other structural
plastic body parts, including bumper fascias and hatchback doors. As a result of
the Acquisition, we now operate manufacturing facilities in Germany, Spain,
France and the Czech Republic. In addition, Peguform had recently followed
certain of its key OEM customers into Mexico and Brazil. Our manufacturing
network is enhanced by 9 module centers across Europe, serving as final assembly
units located directly at, or very close to, selected customers' car assembly
plants. Peguform's proven ability to gain development orders for new and
successor models is enhanced by its product engineering efforts, including such
innovations as thermoplastic bumpers, a proprietary slush molding process, a
thermoplastic hatchback door and painting technologies such as electro-static
painting and the use of water-based paint. For the twelve-months ended December
31, 1998, Peguform had net sales of $1,260.6 million.
We now have an established and significant presence in Europe as a result
of the Acquisition, which complements our strengths in North America, giving us
the ability to service existing OEM customers much more broadly than either
Venture or Peguform could individually. Additionally, we believe that the
Acquisition enhances the businesses of both Venture and Peguform in additional
ways, representing mutually beneficial synergies that go beyond the expansion of
geographic reach, including the following:
- EXPANDED ENGINEERING CAPABILITIES;
- COMPLEMENTARY TECHNOLOGY;
- STRENGTHENED AND EXPANDED CUSTOMER RELATIONSHIPS; AND
- OPERATIONAL EFFICIENCIES.
COMPETITIVE STRENGTHS
We believe we have the following key competitive strengths, which enhance
our ability to compete successfully in our industry:
- LEADING MARKET POSITION. We are among the largest suppliers of interior
and exterior plastic components and systems to the North American and
European automotive markets. We currently supply components or systems on
over 150 models, including 4 out of 5 of the top selling models in both
the United States and Europe. We believe that OEMs increasingly favor
large, multi-national, integrated suppliers with whom they can establish
global strategic
4
<PAGE> 11
relationships. These strategic relationships require suppliers to be able
to offer their customers worldwide manufacturing, and design and
engineering resources.
- DIVERSIFIED GLOBAL CUSTOMER BASE. Our principal customers include every
major North American OEM, 11 of the 12 major European OEMs, several major
Japanese OEMs, and leading Tier I suppliers. As a result, we are less
dependent on revenues from any single geographic market than competitors
that are less diversified. We believe the geographic breadth of our
customer base and our full-service capabilities position us to further
benefit from the current consolidation and globalization trends in the
automotive industry.
- WORLDWIDE FULL-SERVICE PROGRAM MANAGEMENT CAPABILITIES. As OEMs have
focused increasingly on shortening vehicle design and production cycles
and reducing design and production costs, suppliers who have the ability
to cost-effectively take an idea or design from concept to mass
production ("art to part") are being involved at the initial stages of
the process. We are successful in meeting the increased demands by OEMs
for their suppliers to provide full-service program management because of
our expertise in design and engineering, tooling, and multiple
manufacturing processes. As a result, we have increasingly been selected
as a sole-source supplier for vehicle components and integrated systems.
We believe that the evolution of the OEM relationship into strategic
partnerships provides a significant advantage to us because of our
ability to meet a customer's art to part needs on a global basis.
- MULTIPLE EXTERIOR AND INTERIOR PLASTIC TECHNOLOGIES. We believe that we
are one of only a small number of automotive suppliers that can provide
its customers with both full-service program management capability and a
wide array of alternative plastic molding and painting technologies on a
global basis. We possess the latest technologies associated with
thermoplastic injection molding, compression molding, reaction injection
molding ("RIM"), slush molding, sheet molding compounds, composite
technologies, and water-based paints. By possessing a wide range of
plastic design and manufacturing technologies, we are able to distinguish
ourselves from our competition by offering the process that will best
meet the customers' needs, while often lowering design and production
costs and shortening the product development cycle.
- JUST-IN-TIME/SEQUENTIAL SHIPPING CAPABILITIES. As OEMs have moved to
just-in-time inventory management, the timeliness and reliability of
shipments by their suppliers have become increasingly important. To
service our customers more effectively, we utilize just-in-time
manufacturing and sourcing systems, which enable us to meet our
customers' requirements for on-time deliveries while minimizing the
carrying levels of inventory. Our international production facilities and
module centers are strategically located close to our OEM customers'
facilities. We also offer our customers sequential shipping, in which
components are sent to the OEMs in the specific order in which vehicles
are to be assembled, based on as little as two hours lead time. We
believe we have established a reputation as a highly reliable and timely
supplier able to meet our customers' demanding delivery requirements.
- EXPERIENCED MANAGEMENT TEAM. We believe our management's long history of
mutually successful relationships with a wide variety of OEM and Tier I
customers will provide a competitive advantage as the industry trends of
consolidation, outsourcing and globalization continue. Our management
team is highly experienced and has significant expertise in the North
American, European and other automotive markets. We have gained
additional experience in global operations through affiliate companies of
Venture, including operations in Australia, Asia and Africa, all of which
share the Venture name. As evidenced by the 1996 Acquisitions, our
management team has a proven track record of successfully assimilating
and integrating large, strategic acquisitions.
5
<PAGE> 12
BUSINESS STRATEGY
Our business strategy is to use our competitive strengths to further our
position as a leading automotive supplier. The principal components of this
strategy are as follows:
- INVEST IN LEADING-EDGE DESIGN, ENGINEERING AND MANUFACTURING
TECHNOLOGIES. As OEMs worldwide continue to increasingly outsource
manufacturing of components and integrated systems, they have placed
greater reliance on the design and engineering capabilities of their
supplier base. We have made a substantial commitment to new product
technology and design, including establishing an Advanced Engineering
Center and offering the capability to provide 24-hour-a-day global design
and engineering services to our customers. The Advanced Engineering
Center integrates the use of CAD/CAM and utilizes the latest optical
design technology to rapidly and cost effectively replicate and modify
existing designs, as well as to design new prototypes, using a
proprietary reverse engineering process, licensed from an affiliate,
called reverse engineering automated process for rapid prototyping
("REAP"). We also believe it is highly important to be able to offer a
broad range of manufacturing processes and technologies to our customers
for the production of a wide array of plastic components and systems.
Both the 1996 Acquisitions and the Acquisition fit this strategy by
enhancing our ability to provide customers with multiple exterior and
interior technologies, specifically by adding expertise in sheet molding
compounds, slush molding and composite technologies, as well as
sophisticated painting processes. We intend to continue to invest
significantly in our design, engineering and manufacturing capabilities
in order to meet our customers' needs for innovation, quality,
reliability, lower costs and reduced lead times. We believe our continued
ability to design, engineer, tool and manufacture highly engineered
components, modules and systems will provide additional opportunities to
supply an increasing number of products to existing customers and expand
our customer base.
- CONTINUE TO DEVELOP AND MANUFACTURE HIGH QUALITY PRODUCTS. We believe we
maintain an excellent reputation with the OEMs for providing high quality
products and customer service at competitive prices. Our reputation is
exemplified by our receipt of several major quality awards from our OEM
customers in both North America and Europe. Quality levels are currently
being standardized across OEMs through the QS-9000 program which is
expected to lower the cost of maintaining separate quality programs. All
of our manufacturing, tooling and design facilities historically operated
by Venture, and nine manufacturing facilities previously operated by
Peguform are QS-9000 certified.
- EMPHASIZE CONTINUOUS IMPROVEMENT PROCESSES. Venture follows "lean
manufacturing" and "Kaizen," or continuous improvement, philosophies that
seek to identify and eliminate waste in our own operations and in those
of our customers and suppliers. These philosophies emphasize employee
involvement in all phases of our operations by (1) empowering employees
at all levels with responsibility for their work, which leads to a
quicker identification of production issues; (2) forming cross-functional
teams to investigate opportunities for process improvements; and (3)
rewarding employee participation and involvement through financial
incentives. We have successfully implemented these philosophies in the
1996 Acquisitions, and are implementing these philosophies throughout
Peguform.
- MAXIMIZE OPERATING EFFICIENCIES AND LOWER COST STRUCTURE AT ACQUIRED
COMPANIES. We believe there are a number of areas in which we can achieve
annual cost savings related to the Acquisition. We have successfully
effected significant cost savings in past acquisitions. With respect to
the 1996 Acquisitions, we have been able to employ our lean manufacturing
process, which enables us to grow our business with existing management
and assets, and less capital expenditures. These operational efficiencies,
combined with our tooling and design capabilities, have helped us to
achieve substantial cost savings. We expect the principal components of
cost
6
<PAGE> 13
savings related to the recent Acquisition will be in the areas of material
and tooling costs, as further described below:
Materials Cost Savings. We believe there are many opportunities to
reduce materials costs in areas such as raw materials, paint and other
materials, due to the similarities in plastic components manufactured by
Venture and Peguform. In some cases, these materials are currently
purchased from the same suppliers. Additionally, we expect to gain
increased purchasing leverage due to the Acquisition, resulting in more
favorable materials costs throughout our entire operation. As a result
of our analysis of the same or comparable materials, and their
respective costs and volumes at Venture and Peguform, we believe we can
achieve approximately $15.0 million in materials cost savings in our
first full year of operations following the Acquisition.
Tooling Cost Savings. Peguform has historically outsourced all of its
tooling requirements. Venture has consistently invested in maintaining a
sophisticated, in-house tooling capability. We believe Venture's tooling
capabilities not only provide a competitive advantage, but also
typically result in lower tooling costs than would otherwise be the case
if tooling were outsourced to other tooling manufacturers. We and our
affiliated companies currently have capacity to manufacture in-house a
significant portion of the tooling requirements which Peguform has
traditionally outsourced.
Other Operating Efficiencies. In addition to materials and tooling cost
savings, we believe there are other opportunities to improve Peguform's
cost structure. Some of these opportunities include elimination of
redundant administrative expense items, shared design, engineering and
program management resources, manufacturing efficiencies and production
of certain components in-house that are currently outsourced by
Peguform.
- STRATEGIC EXPANSION. We are committed to continue our strategic,
geographic expansion in order to serve our customer base globally. In
addition, we expect to make selective acquisitions and investments, or
enter into strategic alliances, to broaden our service offerings and
further enhance our systems integration capability. We believe that the
consolidation of the automotive supplier base and geographic expansion of
our customers will present additional opportunities for growth.
SUMMARY OF THE EXCHANGE OFFER
REGISTRATION RIGHTS
AGREEMENT..................... We sold the Outstanding Notes on May 27, 1999
to the initial purchasers -- Banc One Capital
Markets, Inc. and Goldman, Sachs & Co. The
initial purchasers then sold the Outstanding
Notes to institutional investors.
Simultaneously with the initial sale of the
Outstanding Notes, we entered into a
Registration Rights Agreement, which provides
for the Exchange Offer.
You may exchange your Outstanding Notes for
Exchange Notes, which have substantially
identical terms. The Exchange Offer satisfies
your rights under the Registration Rights
Agreement. After the Exchange Offer is over,
you will not be entitled to any exchange or
registration rights with respect to your
Outstanding Notes.
THE EXCHANGE OFFER............ We are offering to exchange $125.0 million
total principal amount of our 11% Senior Notes
due 2007 and $125.0 million total principal
amount of our 12% Senior Subordinated Notes
7
<PAGE> 14
due 2009, which have been registered under the
Securities Act, for your 11% Outstanding Senior
Notes due 2007 or your 12% Outstanding Senior
Subordinated Notes due 2009 sold in the May
1999 private offering. To exchange your
Outstanding Notes, you must properly tender
them, and we must accept them. We will exchange
all Outstanding Notes that you validly tender
and do not validly withdraw. We will issue
registered Exchange Notes at or promptly after
the end of the Exchange Offer.
RESALES....................... We believe that you can offer for resale,
resell and otherwise transfer the Exchange
Notes without complying with the registration
and prospectus delivery requirements of the
Securities Act if:
- you acquire the Exchange Notes in the
ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the Exchange Notes;
and
- you are not an "affiliate" of ours, as
defined in Rule 405 of the Securities Act.
If any of these conditions is not satisfied and
you transfer any Exchange Note without
delivering a proper prospectus or without
qualifying for a registration exemption, you
may incur liability under the Securities Act.
We do not assume or indemnify you against such
liability.
Each broker-dealer acquiring Exchange Notes for
its own account in exchange for Outstanding
Notes, which it acquired through market-making
or other trading activities, must acknowledge
that it will deliver a proper prospectus when
any Exchange Notes are transferred. A
broker-dealer may use this Prospectus for an
offer to resell, a resale or other retransfer
of the Exchange Notes.
EXPIRATION DATE............... The Exchange Offer expires at 5:00 p.m., New
York City time, , 1999, unless
we extend the expiration date.
CONDITIONS TO THE EXCHANGE
OFFER......................... The Exchange Offer is subject to customary
conditions, some of which we may waive.
PROCEDURES FOR TENDERING
OUTSTANDING NOTES........... We issued the Outstanding Notes as global
securities. When the Outstanding Notes were
issued, we deposited them with The Huntington
National Bank, as book-entry depositary. The
Huntington National Bank issued a
certificateless depositary interest in each
note, which represents a 100% interest in the
notes, to The Depositary Trust Company ("DTC").
Beneficial interests in the Outstanding Notes,
which are held by direct or indirect
participants in DTC through the certificateless
depositary interest, are shown on records
maintained in book-entry form by DTC.
8
<PAGE> 15
You may tender your Outstanding Notes through
book-entry transfer in accordance with DTC's
Automated Tender Offer Program ("ATOP"). To
tender your Outstanding Notes by a means other
than book-entry transfer, a Letter of
Transmittal must be completed and signed
according to the instructions contained in the
letter. The Letter of Transmittal and any other
documents required by the Letter of Transmittal
must be delivered to the Exchange Agent by
mail, facsimile, hand delivery or overnight
courier. In addition, you must deliver the
Outstanding Notes to the Exchange Agent or
comply with the procedures for guaranteed
delivery. See "The Exchange Offer -- Procedures
for Tendering Outstanding Notes" for more
information.
Do not send Letters of Transmittal and
certificates representing Outstanding Notes to
the Company. Send these documents only to the
Exchange Agent. See "The Exchange
Offer -- Exchange Agent" for more information.
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS............. If you are a beneficial owner whose Outstanding
Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee and wish to tender your Outstanding
Notes in the Exchange Offer, please contact the
registered holder as soon as possible and
instruct it to tender on your behalf and comply
with our instructions set forth elsewhere in
this Prospectus.
WITHDRAWAL RIGHTS............. You may withdraw the tender of your Outstanding
Notes at any time before 5:00 p.m. New York
City time on , 1999, unless we
extend the date.
APPRAISAL OR DISSENTERS'
RIGHTS........................ Holders of Outstanding Notes do not have any
appraisal or dissenters' rights in the Exchange
Offer. If you do not tender your Outstanding
Notes or the Company rejects your tender, you
will not be entitled to any further
registration rights under the Registration
Rights Agreement, except under limited
circumstances. However, your notes will remain
outstanding and entitled to the benefits of the
Indentures. Holders should read the discussion
under the heading "Risk Factors -- Consequences
of a Failure to Exchange Outstanding Notes" for
further information.
FEDERAL INCOME TAX
CONSIDERATIONS................ The exchange of notes is not a taxable exchange
for United States federal income tax purposes.
You will not recognize any taxable gain or loss
or any interest income as a result of the
exchange. For additional information regarding
federal income tax considerations, you should
read the discussion under the heading "Certain
United States Federal Income Tax Consequences."
USE OF PROCEEDS............... We will not receive any proceeds from the
issuance of the Exchange Notes, and we will pay
the expenses of the Exchange Offer.
9
<PAGE> 16
EXCHANGE AGENT................ The Huntington National Bank is serving as the
Exchange Agent in the Exchange Offer. The
Exchange Agent's address, and telephone and
facsimile numbers are listed in the section of
this Prospectus entitled "The Exchange
Offer -- Exchange Agent" and in the Letter of
Transmittal.
SUMMARY OF TERMS OF THE EXCHANGE NOTES
The form and terms of the Exchange Notes are the same as the form and terms
of the Outstanding Notes, except that the Exchange Notes will be registered
under the Securities Act. As a result, the Exchange Notes will not bear legends
restricting their transfer and will not contain the registration rights and
liquidated damage provisions contained in the Outstanding Notes. The Exchange
Notes represent the same debt as the Outstanding Notes. Both the Outstanding
Notes and the Exchange Notes are governed by the same Indentures.
TOTAL AMOUNT OF NOTES......... $125.0 million in principal amount of 11%
Senior Notes due 2007 and $125.0 million in
principal amount of 12% Senior Subordinated
Notes due 2009.
MATURITY...................... June 1, 2007 with respect to the Senior
Exchange Notes and June 1, 2009 with respect to
the Senior Subordinated Exchange Notes.
INTEREST...................... Annual rate -- 11% for the Senior Exchange
Notes.
Annual rate -- 12% for the Senior Subordinated
Exchange Notes.
Payment frequency -- every 6 months on June 1
and December 1.
First payment -- December 1, 1999.
ISSUER........................ Venture Holdings Company LLC, as successor to
Venture Holdings Trust.
GUARANTORS.................... Each of the following wholly owned domestic
subsidiaries of the Company: Vemco, Inc.; Vemco
Leasing, Inc.; Venture Industries Corporation;
Venture Holdings Corporation; Venture Leasing
Company; Venture Mold & Engineering
Corporation; Venture Service Company;
Experience Management LLC; Venture Europe,
Inc.; and Venture EU Corporation.
RANKING....................... The Senior Exchange Notes are general unsecured
debts. They rank senior in right of payment to
all of our subordinated debts, including the
Senior Subordinated Exchange Notes. The Senior
Exchange Notes will rank equally in right of
payment with all of our current and future
unsecured senior indebtedness. As of May 31,
1999, the Outstanding Senior Notes were
effectively subordinated to $395.5 million of
secured debt of the Company and the guarantors.
10
<PAGE> 17
The Senior Subordinated Exchange Notes are
senior subordinated debts. They rank behind all
of our current and future senior indebtedness,
and equally with all of our current and future
subordinated indebtedness. As of May 31, 1999,
the Outstanding Senior Subordinated Notes were
subordinated to $725.5 million of senior debt
of the Company and the guarantors, including
the Outstanding Senior Notes.
In addition, the Exchange Notes will be
effectively subordinated to all of the debt of
non-guarantor subsidiaries.
OPTIONAL REDEMPTION........... On or after June 1, 2003 we may redeem some or
all of the Senior Exchange Notes at any time at
the redemption prices listed in the section
"Description of Exchange Notes" under the
heading "Optional Redemption." On or after June
1, 2004 we may redeem some or all of the Senior
Subordinated Exchange Notes at any time at the
redemption prices listed in that section.
Before June 1, 2002, we may redeem up to 35% of
the Exchange Notes with the proceeds of certain
offerings of equity as described in
"Description of Exchange Notes -- Optional
Redemption."
MANDATORY OFFER TO
REPURCHASE.................... If we sell certain assets or experience
specific kinds of changes of control, we must
offer to repurchase the Exchange Notes at the
prices listed in the section "Description of
Exchange Notes."
BASIC COVENANTS OF
INDENTURES.................... We issued the Outstanding Notes and we will
issue the Exchange Notes under separate
indentures, with The Huntington National Bank
as trustee. The indentures, among other things,
restrict our ability and the ability of our
subsidiaries to:
- borrow money;
- pay dividends on stock or purchase stock;
- make investments;
- use assets as security in other transactions;
and
- sell certain assets or merge with or into
other companies.
For more details, see "Description of Exchange
Notes."
USE OF PROCEEDS............... We will not receive any cash proceeds in the
Exchange Offer.
RISK FACTORS
For a discussion of certain factors that should be considered in connection
with an investment in the Notes, see "Risk Factors."
11
<PAGE> 18
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL AND OPERATING DATA OF THE
COMPANY
The following table sets forth summary unaudited consolidated pro forma
financial and operating data of the Company. The summary unaudited consolidated
pro forma statement of operations and other data for the year ended December 31,
1998 give effect to the Acquisition, the offering of the Outstanding Notes and
the New Credit Agreement, as if they had occurred as of January 1, 1998. The
summary unaudited consolidated pro forma balance sheet data as of December 31,
1998 gives effect to the Acquisition, the offering of the Notes and the New
Credit Agreement, as if they had occurred as of such date. The summary unaudited
consolidated pro forma statement of operations and other data for the three
months ended March 31, 1999 give effect to the Acquisition, the offering of the
Outstanding Notes and the New Credit Agreement, as if they had occurred as of
January 1, 1999. The summary unaudited consolidated pro forma balance sheet as
of March 31, 1999 gives effect to the Acquisition, the offering of the
Outstanding Notes and the New Credit Agreement, as if they had occurred as of
such date. The unaudited consolidated pro forma statement of operations does not
include pro forma adjustments for certain non-recurring costs and charges,
consisting of (1) the prepayment charge of $3.9 million on the redemption of our
$78.9 million of 9 3/4% Senior Subordinated Notes (the "1994 Notes") and (2) the
related $1.9 million write-off of deferred financing costs. See "Use of
Proceeds" and "Capitalization." The summary unaudited pro forma financial data
do not purport to represent what the Company's results of operations actually
would have been if the Acquisition had occurred as of such date and are not
necessarily indicative of future operating results or financial position. The
information contained in this table should be read in conjunction with "Selected
Consolidated Financial Data of Venture," "Selected Consolidated Financial Data
of Peguform," "Unaudited Pro Forma Financial Statements," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements of Venture and Peguform, including the notes thereto,
appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1998(1) 1999(2)
------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................................... $1,933,452 $ 511,730
Gross profit................................................ 254,903 68,871
Income from operations...................................... 62,078 21,134
Interest expense(3)......................................... 72,726 18,126
Net income (loss) before taxes.............................. (7,284) 3,325
Net income.................................................. 2,224 5,582
OTHER FINANCIAL DATA:
EBITDA(4)................................................... $ 169,003 $ 49,781
Adjusted EBITDA(5).......................................... 195,096 --
Depreciation and amortization............................... 100,253 27,294
Capital Expenditures........................................ 102,377 16,844
SELECTED RATIOS:
Adjusted EBITDA to Interest Expense......................... 2.7x --
Total debt to Adjusted EBITDA............................... 4.5x --
</TABLE>
12
<PAGE> 19
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1998(1) 1999(2)
------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................................. $ 238,863 $ 248,964
Property, plant and equipment -- net........................ 512,565 508,247
Total assets................................................ 1,302,376 1,307,566
Total debt.................................................. 882,257 875,874
Trust principal(6).......................................... 69,901 78,096
</TABLE>
- -------------------------
(1) Operating data for Peguform is based on the 12-month period ended December
31, 1998.
(2) Operating data for Peguform is based on the 3-month period ended December
31, 1998, and balance sheet data for Peguform represents amounts at December
31, 1998.
(3) Represents gross interest expense and does not include interest income of
$3,364 and $317 at Peguform for the 12-months ended and 3-months ended
December 31, 1998, respectively. See "Unaudited Consolidated Pro Forma
Statement of Operations."
(4) EBITDA represents income from operations, net of minority interest, before
deducting taxes (including the Michigan single business tax), depreciation,
amortization, interest and payment to beneficiary in lieu of taxes. EBITDA
is not presented as an alternative to net income, as a measure of operating
results or as an indicator of the Company's performance, nor is it presented
as an alternative to cash flow or as a measure of liquidity, but rather to
provide additional information related to debt service capacity. EBITDA
should not be considered in isolation or as a substitute for net income or
cash flow data prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability. EBITDA, while
commonly used, is not calculated uniformly by all companies and should not
be used as a comparative measure without further analysis, nor does EBITDA
necessarily represent funds available for discretionary use. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for a discussion of liquidity and operating results.
(5) Adjusted EBITDA is EBITDA plus (i) a non-recurring charge of $11,093 at
Peguform related to start-up production costs on the Mercedes A-Class
hatchback program; and (ii) $15,000 of anticipated materials cost savings,
which we believe can be achieved in the first full year of operations after
the Acquisition, based upon management's estimates of materials cost savings
expected from a combination of: (a) increased purchasing volume; (b) taking
advantage of lower cost arrangements for specific materials currently
enjoyed by either Venture or Peguform, and applying such lower costs on a
Company-wide basis by leveraging existing suppliers or alternate suppliers;
and (c) efficiencies expected from a more coordinated purchasing function in
Europe. See "Risk Factors -- Risks Associated with the Acquisition; Ability
to Achieve Anticipated Cost Savings."
(6) Represents amount as adjusted downward for (a) the elimination of Peguform's
stockholders' equity, adjusted by $1,498 for accumulated other comprehensive
income relating to Peguform's minimum pension liability, and (b) the
repayment of the 1994 Notes of $78,940, the pre-payment premium of $3,848
paid to retire the 1994 Notes early and the write-off of $1,866 and $1,777
in unamortized financing costs as of December 31, 1998 and March 31, 1999,
respectively, associated with the repayment of the 1994 Notes.
13
<PAGE> 20
SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA OF VENTURE
The following table sets forth summary historical financial and operating
data of Venture. The summary income statement data and balance sheet data as of
and for each of the fiscal years in the five-year period ended December 31, 1998
were derived from the audited consolidated financial statements of Venture. The
summary historical financial data for the 3 months ended March 31, 1999 and 1998
have been derived from Venture's unaudited condensed consolidated financial
statements. The information contained in this table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements of Venture,
including the notes thereto, appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN
(DOLLARS IN THOUSANDS) THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1)(2):
Net sales..................................... $244,112 $251,142 $351,777 $624,113 $645,196 $166,612 $165,992
Cost of products sold......................... 199,717 211,262 302,940 521,361 532,809 133,616 133,070
-------- -------- -------- -------- -------- -------- --------
Gross profit.................................. 44,395 39,880 48,837 102,752 112,387 32,996 32,922
Selling, general and administrative expense... 19,200 20,129 26,588 57,217 59,689 14,855 14,270
Payment to beneficiary in lieu of taxes....... 3,405 577 666 472 535 -- --
-------- -------- -------- -------- -------- -------- --------
Income from operations...................... 21,790 19,174 21,583 45,063 52,163 18,141 18,652
Interest expense.............................. 14,345 15,032 19,248 30,182 36,641 7,145 9,479
-------- -------- -------- -------- -------- -------- --------
Net income before extraordinary items and
taxes..................................... 7,445 4,142 2,335 14,881 15,522 10,996 9,173
Net extraordinary loss on early retirement of
debt........................................ -- -- 2,738 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income after extraordinary items.......... 7,445 4,142 (403) 14,881 15,522 10,996 9,173
Tax provision(3).............................. -- -- 336 3,358 1,954 1,465 1,067
-------- -------- -------- -------- -------- -------- --------
Net income (loss)............................. 7,445 4,142 (739) 11,523 13,568 9,531 8,106
OTHER FINANCIAL DATA:
EBITDA(4)..................................... $ 41,021 $ 37,001 $ 46,123 $ 80,391 $ 94,216 $ 28,336 $ 30,205
Depreciation and amortization................. 14,070 16,068 22,628 32,147 39,320 9,079 10,794
Capital expenditures.......................... 22,798 20,339 64,593 33,012 24,706 8,371 2,688
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................... $ 85,258 $ 74,354 $ 83,404 $125,101 $168,655 $156,076 $178,756
Property, plant and equipment -- net.......... 111,472 116,299 203,975 205,765 200,544 205,529 196,226
Total assets.................................. 234,435 231,602 498,067 524,122 541,315 564,341 550,516
Total debt.................................... 153,118 152,463 299,996 336,188 364,939 357,796 362,656
Trust principal............................... 49,356 53,498 52,759 64,282 77,113 73,813 85,219
</TABLE>
- -------------------------
(1) The Issuer operates as a holding company and has no independent operations
of its own. Separate financial statements of the Issuer's subsidiaries have
not been presented because we do not believe that such information would be
material to a decision to exchange your Outstanding Notes.
(2) The results for 1996 include the operations of Bailey from August 26, 1996,
and of AutoStyle from June 3, 1996.
(3) This provision relates solely to Venture Holdings Corporation (which
operates Bailey) and its subsidiaries (see Note 2 above). Other significant
subsidiaries and the Issuer have elected "S" corporation status under the
Internal Revenue Code of 1986, as amended (the "Code") or are limited
liability companies ("LLCs") (taxed as partnerships) and, consequently, do
not incur liability for federal and certain state income taxes.
14
<PAGE> 21
(4) EBITDA represents income from operations before deducting taxes (including
the Michigan single business tax), depreciation, amortization, interest and
payment to beneficiary in lieu of taxes. EBITDA is not presented as an
alternative to net income, as a measure of operating results or as an
indicator of Venture's performance, nor is it presented as an alternative to
cash flow or as a measure of liquidity, but rather to provide additional
information related to debt service capacity. EBITDA should not be
considered in isolation or as a substitute for net income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability. EBITDA, while commonly used, is not
calculated uniformly by all companies and should not be used as a
comparative measure without further analysis, nor does EBITDA necessarily
represent funds available for discretionary use. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for a discussion of liquidity and operating results.
15
<PAGE> 22
SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA OF PEGUFORM
The following table sets forth summary historical financial and operating
data of Peguform. The summary income statement data and balance sheet data as of
and for the two year period ended September 30, 1998 were derived from the
audited consolidated financial statements of Peguform. The summary income
statement data and balance sheet data as of and for the three month period ended
December 31, 1997 and 1998 are derived from unaudited financial statements of
Peguform. The information contained in this table should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements of Peguform, including the
notes thereto, appearing elsewhere in this prospectus.
Solely for the convenience of the readers, the following consolidated
financial statements have been translated to United States dollars at the rate
of DEM 1.6767 per United States dollar, the Noon Buying Rate as of December 31,
1998. The translation should not be construed as a representation that the
amounts shown could be converted into United States dollars at such rate or any
other rate.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- ----------------------
1997 1998 1997 1998
----------- ----------- --------- ---------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................... $ 992,953 $1,179,518 $263,518 $344,561
Other revenues.......................... 10,567 27,272 754 1,177
---------- ---------- -------- --------
Total revenues.......................... 1,003,520 1,206,790 264,272 345,738
Cost of products sold................... 884,146 1,077,184 241,233 309,789
---------- ---------- -------- --------
Gross profit............................ 119,374 129,606 23,039 35,949
Selling, general and administrative
expenses.............................. 92,102 119,902 22,613 30,660
Other expenses.......................... 4,487 1,436 5,298 951
Interest expense (net).................. 13,877 14,309 4,064 3,777
---------- ---------- -------- --------
Income before income taxes............ 8,908 (6,041) (8,936) 561
Taxes on income......................... 3,596 3,614 534 476
Minority interest....................... 369 (301) (2) (275)
---------- ---------- -------- --------
Net income.............................. $ 4,943 $ (9,354) $ (9,468) $ 360
OTHER FINANCIAL DATA:
EBITDA(1)............................... $ 77,278 $ 64,947 $ 9,735 $ 19,575
EBITDA (as adjusted)(2)................. 76,040
Depreciation and amortization........... 52,381 52,922 14,196 14,645
Capital Expenditures.................... 60,842 85,616 22,101 14,156
</TABLE>
16
<PAGE> 23
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- ----------------------
1997 1998 1997 1998
----------- ----------- --------- ---------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital(3)...................... $ 45,668 $ 43,061 $ 78,255 $ 25,443
Property, plant and equipment -- net.... 291,178 319,198 297,206 312,021
Total assets............................ 625,446 663,224 676,969 651,635
Total debt.............................. 245,464 273,287 323,199 272,261
Total stockholders equity............... 130,239 128,011 119,930 128,419
</TABLE>
- -------------------------
(1) EBITDA represents income from operations, net of minority interest, before
deducting taxes, depreciation, amortization, and interest. EBITDA is not
presented as an alternative to net income, as a measure of operating results
or as an indicator of Peguform's performance, nor is it presented as an
alternative to cash flow or as a measure of liquidity, but rather to provide
additional information related to debt service capacity. EBITDA should not
be considered in isolation or as a substitute for net income or cash flow
data prepared in accordance with generally accepted accounting principles or
as a measure of a company's profitability. EBITDA, while commonly used, is
not calculated uniformly by all companies and should not be used as a
comparative measure without further analysis, nor does EBITDA necessarily
represent funds available for discretionary use. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for a discussion of liquidity and operating results.
(2) EBITDA (as adjusted) represents EBITDA plus a non-recurring charge of
$11,093 related to start-up production costs on the Mercedes A-Class
hatchback program.
(3) Working capital does not include loans payable to Peguform's parent of
$158,031 at September 30, 1997, $183,957 at September 30, 1998, $209,922 at
December 31, 1997 and $164,850 at December 31, 1998. All outstanding
intercompany loans will be repaid as part of the purchase price upon
consummation of the Acquisition.
17
<PAGE> 24
RISK FACTORS
This prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934 including, in particular, the statements about the Company's plans,
strategies, and prospects under the headings "Summary," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and "Business."
Although we believe that our plans, intentions and expectations reflected in or
suggested by such forward-looking statements are reasonable, we can give no
assurance that such plans, intentions or expectations will be achieved.
Important factors that could cause actual results to differ materially from the
forward-looking statements we make in this prospectus are set forth below and
elsewhere in this prospectus. See "Forward-Looking Statements." All
forward-looking statements attributable to the Company or persons acting on our
behalf are expressly qualified in their entirety by the following cautionary
statements.
SUBSTANTIAL LEVERAGE -- OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT THE
FINANCIAL HEALTH OF THE COMPANY AND PREVENT US FROM FULFILLING OUR OBLIGATIONS
UNDER THESE NOTES.
We have now and will continue to have a significant amount of indebtedness.
The following chart shows certain important credit statistics and is presented
assuming we had completed the Acquisition and the financing thereof, as of March
31, 1999:
<TABLE>
<CAPTION>
AT MARCH 31, 1999
PRO FORMA,
AS ADJUSTED
-----------------
(DOLLARS IN
THOUSANDS)
<S> <C>
Total indebtedness (excludes $2,975 of outstanding letters
of credit)................................................ $875,874
Trust principal............................................. 78,096
Debt to equity ratio........................................ 11.2x
</TABLE>
On a pro forma basis for the year ended December 31, 1998, our earnings
were insufficient to cover fixed charges by $4.7 million. On a pro forma basis
for the three months ended March 31, 1999, the ratio of earnings to fixed
charges was 1.2x.
Our substantial indebtedness could have important consequences to you. For
example, it could:
- make it more difficult for us to satisfy our obligations with respect to
the Exchange Notes;
- increase our vulnerability to general adverse economic and industry
conditions;
- require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, research and development efforts and other general
corporate purposes;
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
- place us at a competitive disadvantage compared to our competitors that
have less debt; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds;
specifically our New Credit Agreement and the indenture governing our
$205 million of 9 1/2% Senior Notes due 2005 (the "1997 Senior Notes")
contain many covenants that are more restrictive than those applicable to
these Notes. Failing to comply with those covenants could result in an
event of default which, if not cured or waived, could have a material
adverse effect on us.
18
<PAGE> 25
We are required to refinance $125.0 million principal amount outstanding
under the New Credit Agreement within 18 months from May 27, 1999, utilizing the
proceeds from the sale of securities that are pari passu in right of payment
with, or junior to, the Senior Subordinated Exchange Notes. We cannot assure you
that we will be able to refinance such amount on favorable terms or at all. If
we do not refinance the $125.0 million principal amount, we would be in default
under the New Credit Agreement and the indentures for the Exchange Notes.
See "Description of Exchange Notes" and "Description of Certain
Indebtedness."
ABILITY TO SERVICE DEBT -- TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A
SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS
BEYOND OUR CONTROL.
Our ability to make payments on and to refinance our indebtedness,
including the Exchange Notes, and to fund planned capital expenditures and
research and development efforts will depend on our ability to generate cash in
the future. This, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control.
Based on our current level of operations and anticipated cost savings and
operating improvements, we believe our cash flow from operations, available cash
and available borrowings under the New Credit Agreement will be adequate to meet
our future liquidity needs for at least the next few years.
We cannot assure you, however, that our business will generate sufficient
cash flow from operations, that currently anticipated cost savings and operating
improvements will be realized as anticipated or that future borrowings will be
available to us under the New Credit Agreement in an amount sufficient to enable
us to pay our indebtedness, including these Exchange Notes, or to fund our other
liquidity needs. We may need to refinance all or a portion of our indebtedness,
including these Exchange Notes, on or before maturity. We cannot assure you that
we will be able to refinance any of our indebtedness, including the New Credit
Agreement, the 1997 Senior Notes or these Exchange Notes, on commercially
reasonable terms or at all.
COMPANY STRUCTURE; NOT ALL SUBSIDIARIES ARE GUARANTORS -- THE ISSUER IS LIMITED
IN ITS ACCESS TO ITS SUBSIDIARIES' CASH FLOWS. YOUR RIGHT TO RECEIVE PAYMENTS ON
THESE EXCHANGE NOTES COULD BE ADVERSELY AFFECTED IF ANY OF OUR NON-GUARANTOR
SUBSIDIARIES DECLARE BANKRUPTCY, LIQUIDATE, OR REORGANIZE.
The Issuer must rely entirely upon distributions from its domestic and
foreign subsidiaries and repayment of principal and interest on intercompany
loans made by the Issuer to its subsidiaries to generate the funds necessary to
meet its obligations, including payment of principal and interest on the
Issuer's Notes. We expect payments of interest by our foreign subsidiaries on
these intercompany loans to result in the repatriation of a portion of their
cash flow. We cannot predict whether these interest payments will be
recharacterized in a way that has adverse tax or other consequences for us, or
whether they will become subject to restrictions on the transfer of funds into
or out of foreign countries, which would adversely affect our ability to pay our
outstanding indebtedness, including the Exchange Notes. The ability of the
Issuer's subsidiaries to pay dividends and make other payments or advances to
the Issuer will depend upon their operating results and will be subject to
applicable laws and contractual restrictions contained in the instruments
governing any indebtedness of such subsidiaries. Although the indentures
governing the Exchange Notes limit the ability of such subsidiaries to enter
into consensual restrictions on their ability to pay dividends and make other
payments to the Issuer, such limitations are subject to a number of significant
qualifications. In addition, certain countries in which our subsidiaries are
organized place limits on the remittance of dividends, and such limitations may
limit the amount of cash available from our foreign subsidiaries
19
<PAGE> 26
to service our debt. See "Description of Exchange Notes -- Certain
Covenants -- Dividend and Other Payment Restrictions Affecting Subsidiaries."
Some but not all of our subsidiaries will be guarantors of the Exchange
Notes. In the event of a bankruptcy, liquidation or reorganization of any of the
non-guarantor subsidiaries, holders of their indebtedness and their trade
creditors will generally be entitled to payment of their claims from the assets
of those subsidiaries before any assets are made available for distribution to
us. Assuming we had completed this offering on March 31, 1999, on a pro forma
basis after giving effect to the Acquisition, and the financing thereof, the
Exchange Notes would have been effectively junior to all indebtedness and other
liabilities of these non-guarantor subsidiaries. The non-guarantor subsidiaries
generated 66.9% of our consolidated revenues in the twelve-month period ended
December 31, 1998, on a pro forma basis, and 67.9% of our consolidated revenues
in the three-month period ended March 31, 1999, on a pro forma basis. The
non-guarantor subsidiaries held 57.0% of our consolidated assets as of December
31, 1998, on a pro forma basis, and 56.5% of our consolidated assets as of March
31, 1999 on a pro forma basis.
The New Credit Agreement grants to the lenders thereunder security
interests in the assets of the domestic subsidiaries of the Issuer that are
guarantors of the Exchange Notes, including the capital stock of certain
subsidiaries of the Issuer that will not guarantee the Exchange Notes. As a
result, if an event of default occurs under the New Credit Agreement, the
lenders thereunder would be entitled to exercise certain remedies which would
have the effect of preventing such subsidiaries from making payments in respect
of the Notes. See "Description of Certain Indebtedness."
ADDITIONAL BORROWINGS AVAILABLE -- DESPITE CURRENT INDEBTEDNESS LEVELS, WE AND
OUR SUBSIDIARIES MAY STILL BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT. THIS COULD
FURTHER EXACERBATE THE RISKS DESCRIBED ABOVE.
We may be able to incur substantial additional indebtedness in the future.
The terms of the indentures do not fully prohibit us or our subsidiaries from
doing so. As of March 31, 1999, on a pro forma basis our New Credit Agreement
would permit additional borrowing of up to $194.7 million, and all of those
borrowings would be senior to the Senior Subordinated Exchange Notes and the
subsidiary guarantees thereof, and effectively senior to the Senior Exchange
Notes and the subsidiary guarantees thereof. If new debt is added to our current
debt levels, the related risks that we now face could intensify.
See "Capitalization," "Selected Consolidated Financial Data of Venture,"
"Selected Consolidated Financial Data of Peguform" and "Description of Exchange
Notes -- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" and "Description of Certain Indebtedness -- New Credit
Agreement."
RISKS ASSOCIATED WITH THE ACQUISITION; ABILITY TO ACHIEVE ANTICIPATED COST
SAVINGS -- WE MAY NOT RECEIVE THE DESIRED BENEFITS FROM THE ACQUISITION.
We cannot assure you that the Company will realize the expected benefits of
the Acquisition. Also, we may experience difficulty integrating Peguform's
operations with Venture's, and we may not derive the expected cost savings from
the integration. The integration of Peguform into Venture's business will
require the expertise of several key managers who are remaining with us, but may
not remain during the entire period of integration.
We estimate that we will realize certain cost savings from the Acquisition,
including: (1) materials cost savings in respect of which we have included $15.0
million in cost savings in Adjusted EBITDA; (2) tooling cost savings; and (3)
operating efficiencies. See "Summary -- Business Strategy." The expected cost
savings from the integration of Peguform's operation with Venture's, including
any materials cost savings, are based on our estimates and assumptions, which
20
<PAGE> 27
are inherently uncertain and are subject to significant business, economic and
other uncertainties and contingencies, all of which are difficult to predict and
many of which are beyond our control. A portion of the materials cost savings
and operating efficiencies are premised on the assumption that certain
purchasing costs and levels of efficiency realized by either Venture or Peguform
prior to the Acquisition will continue to be achieved. Other estimates were
based on a management consensus as to what levels of purchasing and similar
efficiencies should be achievable by an entity our size. Estimates of potential
cost savings are forward-looking statements that are inherently uncertain. A
portion of our anticipated cost savings, in particular a portion of anticipated
tooling cost savings, will not be realized for one or more years. Actual cost
savings, if any, could differ materially from those projected.
All of these forward-looking statements are based on our estimates and
assumptions, which although we believe to be reasonable, are inherently
uncertain and difficult to predict; therefore, undue reliance should not be
placed upon such estimates. The following important factors (as well as the
factors set forth in "Forward-Looking Statements"), among others, could cause us
not to achieve the cost savings contemplated herein or otherwise cause our
results of operations to be adversely affected in future periods: (1) inability
to negotiate more favorable terms with suppliers; (2) inability to achieve
future sales levels or other operating results that support the cost savings;
and (3) operational inefficiencies in our distribution or other systems. Many of
these factors are beyond our control. In addition, there can be no assurance
that unforeseen costs and expenses or other factors will not offset the
estimated cost savings or other components, or our plan in whole or in part.
SUBORDINATION OF SENIOR SUBORDINATED EXCHANGE NOTES -- YOUR RIGHT TO RECEIVE
PAYMENTS ON THE SENIOR SUBORDINATED EXCHANGE NOTES IS JUNIOR TO OUR EXISTING
INDEBTEDNESS AND POSSIBLY ALL OF OUR FUTURE BORROWINGS. FURTHER, THE GUARANTEES
OF THE SENIOR SUBORDINATED EXCHANGE NOTES ARE JUNIOR TO ALL OUR GUARANTORS'
EXISTING INDEBTEDNESS AND POSSIBLY ALL THEIR FUTURE BORROWINGS.
The Senior Subordinated Exchange Notes and related guarantees rank behind
all of the Issuer's and the guarantors' existing indebtedness and all of the
Issuer's and the guarantors' existing and future borrowings, except any future
indebtedness that expressly provides that it ranks equal with, or is
subordinated in right of payment to, the Senior Subordinated Exchange Notes and
the related guarantees. As a result, upon any distribution to the Issuer's or
the guarantors' creditors in a bankruptcy, liquidation or reorganization or
similar proceeding relating to the Issuer or the guarantors or their property,
the holders of their senior debt will be entitled to be paid in full in cash
before any payment may be made with respect to the Senior Subordinated Exchange
Notes or the related guarantees.
In addition, all payments on the Senior Subordinated Exchange Notes and
related guarantees will be blocked in the event of a payment default on senior
debt and may be blocked for up to 179 of 360 consecutive days in the event of
certain non-payment defaults on senior debt.
In the event of a bankruptcy, liquidation or reorganization or similar
proceeding relating to the Issuer or the guarantors, holders of the Senior
Subordinated Exchange Notes will participate with trade creditors and all other
holders of the Issuer's and the guarantors' subordinated indebtedness in the
assets remaining after the Issuer and the guarantors have paid all of the senior
debt. However, because the Senior Subordinated Note indenture requires that
amounts otherwise payable to holders of the Senior Subordinated Exchange Notes
in a bankruptcy or similar proceeding be paid to holders of senior debt instead,
holders of the Senior Subordinated Exchange Notes may receive less, ratably,
than holders of trade payables in any such proceeding. In any of these cases,
the Issuer and the guarantors may not have sufficient funds to pay all of their
respective creditors, and holders of Senior Subordinated Exchange Notes may not
receive any funds.
21
<PAGE> 28
Assuming we had completed the offering of the Outstanding Notes on March
31, 1999, on a pro forma basis giving effect to the Acquisition and the
financing thereof, as of such date, the Outstanding Senior Subordinated Notes
and guarantees would have been subordinated to $725.5 million of senior debt
(excluding $3.0 million of outstanding letters of credit) of the Issuer and the
guarantors, including the Outstanding Senior Notes, and approximately $194.7
million would have been available for borrowing as additional senior secured
debt under our New Credit Agreement. We will be permitted to borrow substantial
additional indebtedness, including senior debt, in the future under the terms of
the indentures.
EFFECTIVE SUBORDINATION OF SENIOR EXCHANGE NOTES TO SECURED SENIOR
DEBT -- ALTHOUGH YOUR RIGHT TO RECEIVE PAYMENTS ON THE SENIOR EXCHANGE NOTES IS
SENIOR OR PARI PASSU TO OUR EXISTING INDEBTEDNESS, THE SENIOR EXCHANGE NOTES ARE
UNSECURED. THEREFORE, YOUR RIGHTS MAY EFFECTIVELY BE SUBORDINATED TO THE RIGHTS
OF HOLDERS OF SECURED INDEBTEDNESS.
Holders of any secured indebtedness of the Issuer will have claims that are
prior to the claims of the holders of the Senior Exchange Notes with respect to
the assets securing such other indebtedness. Notably, the Issuer is a party to
the New Credit Agreement which is secured by liens on all domestic assets. The
Senior Exchange Notes will be effectively subordinated to all such secured
indebtedness. In the event of any distribution or payment of the assets of the
Issuer or the guarantors in any foreclosure, dissolution, winding-up,
liquidation, reorganization, or other bankruptcy proceeding, holders of secured
indebtedness will have a prior claim to the assets of the Issuer and the
guarantors that constitute their collateral. Holders of the Senior Exchange
Notes will participate ratably with all holders of unsecured indebtedness of the
Issuer that is deemed to be of the same class as the Senior Exchange Notes, and
potentially with all other general creditors of the Issuer and the guarantors,
based upon the respective amounts owed to each holder or creditor, in the
remaining assets. In any of the foregoing events, there can be no assurance that
there would be sufficient assets to pay amounts due on the Senior Exchange
Notes. As a result, holders of the Senior Exchange Notes may receive less,
ratably, than holders of secured indebtedness.
Assuming we had completed the offering of the Outstanding Notes on March
31, 1999, on a pro forma basis after giving effect to the Acquisition, and the
financing thereof, as of such date, the aggregate amount of secured indebtedness
of the issuer and the guarantors (including borrowings under the New Credit
Agreement) would have been approximately $395.5 million, and approximately
$194.7 million would have been available for additional borrowing under the New
Credit Agreement. The indentures will permit the incurrence of substantial
additional secured indebtedness by the Issuer and the guarantors in the future.
22
<PAGE> 29
RELIANCE ON MAJOR CUSTOMERS; THE OEM SUPPLIER INDUSTRY -- WE ARE DEPENDENT UPON
A GROUP OF CUSTOMERS WHOSE NEEDS ARE CYCLICAL AND LARGELY DEPENDENT UPON
CUSTOMER DEMAND.
We compete in the global OEM automobile supplier industry in which OEMs may
exert considerable pressure on suppliers such as us. Our sales to our major OEM
customers for the year ended December 31, 1998 on a pro forma basis, were
approximately:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1998
-----------------
<S> <C> <C>
- - Volkswagen Group: (including Audi AG, Skoda Automobilova,
Seat, S.A. and Volkswagen AG) 30.1%
- - General Motors Corporation: 12.6%
- - DaimlerChrysler AG: 10.5%
- - Ford Motor Company: 8.2%
- - PSA Peugeot Citroen: 5.8%
</TABLE>
Sales to these customers consist of large numbers of different parts,
tooling and other services, which are sold to separate operating groups within
each customer's organization. Purchase orders from these customers generally
cover a particular model year rather than a specific quantity of products. The
loss of a significant number of operating groups or purchase orders, or a
decrease in demand for certain models could have a material adverse affect on
us. The failure to obtain purchase orders for new models or the failure to
continue business on redesigned existing models could also adversely affect us.
Furthermore, the OEMs can exert considerable pressure on their suppliers for
increased quality standards, price reductions or additional engineering
capabilities. Increased costs may result from such changes and adversely affect
the Company.
Finally, the OEM supplier industry is very cyclical and dependent upon the
overall strength of consumer demand for light trucks and passenger cars. The
industry is also subject to regulatory requirements, trade agreements and other
factors beyond our control. The automotive industry, for which we supply
components and systems, may experience downturns. An economic recession
generally has a greater impact on highly leveraged companies like us. A decrease
in overall consumer demand for motor vehicles in general, or specific segments,
could adversely affect us.
UNIONIZED WORKFORCE -- WE MAY BE ADVERSELY IMPACTED BY WORK STOPPAGES AND OTHER
LABOR RELATIONS MATTERS.
Certain of our North American employees, most of our European employees,
and many employees of the OEMs and our other customers are unionized. Work
stoppages, slow-downs or other labor disputes could adversely affect our output.
In the year ended December 31, 1998, for example, our operations were affected
by a prolonged labor dispute at General Motors. In addition, collective
bargaining agreements with unionized employees at each of the three major U.S.
OEMs expire in the Fall of 1999, and any disputes arising from the negotiation
of new agreements could adversely affect our operations. We have recently
negotiated a new collective bargaining agreement with the employees at our
Seabrook, New Hampshire facility. The new agreement expires in June 2002.
Employees at our Conneaut, Ohio facility have recently voted to be represented
by the Teamsters union. Negotiations regarding a new collective bargaining
agreement with these employees has not yet begun.
23
<PAGE> 30
COMPETITION -- WE MAY NOT CONTINUE TO PERFORM SUCCESSFULLY IN OUR HIGHLY
COMPETITIVE INDUSTRY.
We compete in a highly competitive industry. Many actual or potential
competitors exist, including the internal component operations of the OEMs as
well as independent suppliers. Many of these competitors are larger than us. The
industry is becoming increasingly competitive due to supplier consolidations and
the spin-off of formerly in-house OEM plastics manufacturing facilities. We
compete on the basis of geographic presence, quality, cost, timely delivery and
customer service and, increasingly, design and engineering capability, painting
capability, new product innovation, broad product offerings, product testing
capability and ability to reduce the time from concept to mass production. As
the OEMs strive to reduce new model development cost and timing, innovation,
design and engineering will become increasingly important in distinguishing
competitors. We may not be able to continue to compete successfully in this
environment.
RAW MATERIALS -- WE MAY EXPERIENCE SHORTAGES OF RAW MATERIALS NECESSARY TO OUR
MANUFACTURING PROCESSES.
Our manufacturing processes use a variety of raw materials, principally
engineered plastic resins such as nylon, polypropylene (including
thermoplastics), polycarbonate, acrylonitrile-butadiene-styrene, fiberglass
reinforced polyester, polyethylene terephthalate ("PET") and thermoplastic
polyurethane; a variety of ingredients used in compounding materials used in the
compression molding process; paint related products; and steel for production
molds. Our customers usually specify materials and suppliers to be used for a
specific program, but we cannot assure you that the specified suppliers will
always be able to supply the specified materials or that alternative sources
will be available. We obtain most of our raw materials from 1 year supply
agreements in which we estimate our annual needs. We generally issue releases
against these agreements only when we receive corresponding orders from our
customers. Although we have not historically experienced raw material shortages,
we could face shortages in the future.
CONTROL; AFFILIATED TRANSACTIONS -- LARRY J. WINGET ("MR. WINGET") EXERTS
SIGNIFICANT CONTROL OVER US BECAUSE HE IS THE SOLE BENEFICIARY AND TRUSTEE OF
THE TRUST, AND THE TRUST IS THE SOLE MEMBER OF THE ISSUER, WHICH IS THE ISSUER
OF THE EXCHANGE NOTES AND DIRECTLY OR INDIRECTLY OWNS THE CAPITAL STOCK OF EACH
GUARANTOR. ALSO, WE RELY ON NON-ARMS'-LENGTH TRANSACTIONS ENTERED INTO WITH MR.
WINGET AND AFFILIATED ENTITIES HE CONTROLS.
The Issuer is the sole issuer of these Exchange Notes and owns the capital
stock of each guarantor. Mr. Winget is the sole beneficiary and trustee of the
Trust, which is the sole member of the Issuer. Therefore, Mr. Winget may elect
or remove the directors of the guarantor and non-guarantor corporate
subsidiaries and the management of the limited liability company subsidiaries
and exercise other control over their operations. The Issuer makes distributions
to the Trust, which then makes distributions to Mr. Winget, and compensates him
as an executive officer of the Company. Also, we have entered into many
agreements with Mr. Winget and the entities he owns or controls. We depend on
these entities to provide necessary facilities, machinery, equipment, technology
and services. Since we operate for the benefit of Mr. Winget, the terms of these
transactions are not necessarily the result of "arms'-length" bargaining, but we
believe that the transactions are on terms no less favorable to us than would be
obtained if such transactions or arrangements were arms'-length transactions
with non-affiliated persons. The indenture governing the 1997 Senior Notes and
the indentures governing these Exchange Notes require us to have a "Fairness
Committee" with at least one independent member to approve this type of
transaction. Also, such indentures restrict distributions to Mr. Winget and
contain an agreement with Mr. Winget which requires him to offer corporate
opportunities to us before he pursues such opportunities individually or through
other companies he owns or controls.
See "Description of Certain Indebtedness" and "Certain Transactions."
24
<PAGE> 31
RISKS ASSOCIATED WITH ACQUISITIONS -- WE MAY NOT BE ABLE TO IMPLEMENT OUR
STRATEGY OF SUCCESSFULLY COMPLETING FUTURE ACQUISITIONS. COMPLETED ACQUISITIONS
MAY LEAD TO UNEXPECTED LIABILITIES.
Our business strategy allows for growth through selected acquisitions in
order to expand our markets and take advantage of the consolidating trend in the
automotive supplier industry. The full benefits of these acquisitions require
integration of administrative, finance, sales and marketing approaches, and
coordination of administration, marketing and sales organizations. Occasionally
a completed acquisition may adversely affect our financial condition and
reporting results, including our capital requirements and the accounting
treatment of these acquisitions. Completed acquisitions may also lead to
significant unexpected liabilities after the consummation of such acquisitions.
See "Risks Associated with the Acquisition; Ability to Achieve Anticipated
Cost Savings."
ENVIRONMENTAL -- THE COMPANY MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL CLAIMS
RESULTING FROM OUR METHODS OF OPERATIONS.
Our operations are subject to federal, state and local environmental, and
occupational safety and health laws and regulations in the United States and
other countries. The Company has been subject to claims for environmental
matters relating to the disposal of hazardous substances and wastes. In
addition, we anticipate capital expenditures at certain of our manufacturing
facilities to decrease the release of certain compounds into the air resulting
from our painting process. Also, fines may be levied against us for the release
of such compounds. Although we have taken steps to minimize the environmental
risks of our operations, we cannot assure you that our activities will not
result in further environmental claims. However, we believe that our current
environmental liabilities will not result in material adverse effects upon the
Company.
See "Business -- Environmental Matters" and "-- Legal Proceedings."
FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE THE ABILITY TO RAISE THE
FUNDS NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE
INDENTURES.
Upon the occurrence of certain specific kinds of change of control events,
we will be required to offer to repurchase all outstanding Exchange Notes.
However, it is possible that we will not have sufficient funds at the time of
the change of control to make the required repurchase of Exchange Notes or that
restrictions in the New Credit Agreement and other senior debt will not allow
such repurchases. In addition, certain important corporate events, such as
leveraged recapitalizations that would increase the level of our indebtedness,
would not constitute a "Change of Control" under the indentures.
See "Description of Exchange Notes -- Repurchase at the Option of Holders."
YEAR 2000 -- WE CANNOT ASSURE YOU THAT WE, OR OUR CUSTOMERS AND SUPPLIERS, WILL
BE YEAR 2000 COMPLIANT. PROBLEMS ASSOCIATED WITH THE YEAR 2000 MAY ADVERSELY
AFFECT OUR OPERATIONS.
We cannot assure you that our computer systems or software products or
those of our suppliers and customers will accept input of, store, manipulate and
output dates prior to the year 2000 or thereafter without error or interruption.
We are assessing the issues related to the year 2000 problem, and we have
implemented a readiness program to mitigate the problem of business interruption
or other risks. We are also requesting assurances from our significant suppliers
and customers that their systems are year 2000 compliant or that they are
identifying and addressing problems to ready themselves for the year 2000. We
cannot assure you that we will identify all year 2000 problems in advance of
their occurrence, or that we will be able to successfully remedy problems that
are discovered. The expense of our efforts to identify and address such
problems, or the expenses or
25
<PAGE> 32
liabilities to which we may become subject to as a result of such problems,
could have a material adverse effect on the Company.
SUBSTANTIAL FOREIGN OPERATIONS -- OUR SIGNIFICANT INTERNATIONAL OPERATIONS MAKE
US SUSCEPTIBLE TO FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND SEVERAL OTHER
RISKS THAT ARE BEYOND OUR CONTROL.
Over two-thirds of our revenue and over one-half of our net assets are
derived from operations outside of the United States. We are therefore subject
to risks associated with operations in foreign countries, including fluctuations
in currency exchange rates, tariffs and other trade barriers, longer accounts
payable cycles and limits on conversion of foreign currencies into dollars. In
addition, certain countries place limits on the remittance of dividends by
companies organized in such countries to their shareholders. Such dividend
payment restrictions may limit the amount of cash available from our foreign
subsidiaries to service our debt. See "Company Structure; Not all Subsidiaries
are Guarantors." Our financial condition and results of operations, reported in
United States dollars, may be affected by fluctuations in the value of
currencies in which we transact business, particularly the euro, and for such
period of time as those currencies remain in existence, the German Mark, the
French Franc, the Spanish Peseta, the Czech Republic Koruna and the Brazilian
Real. Exchange rate fluctuations could have a material adverse effect on us. In
addition, we incur additional costs of compliance with local regulations by
operating in a number of countries. Changes in local economic or political
conditions could impact our manufacturing, assembly and distribution
capabilities. We intend to hedge currency exchange risks, but such hedges may
not eliminate the risk completely. The costs related to these international
operations could adversely affect the Company.
Under the European Union Treaty, the "euro" was introduced on January 1,
1999 which, subject to the fulfillment of certain conditions, will replace the
currencies of certain member states of the European Union. There can be no
assurance that the introduction of the euro will not increase the volatility of
exchange rates and intensify other risks associated with currency fluctuations.
FRAUDULENT CONVEYANCE MATTERS -- FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER
SPECIFIC CIRCUMSTANCES, TO VOID THE EXCHANGE NOTES AND GUARANTEES AND REQUIRE
NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM US.
Under federal bankruptcy law and comparable provisions of state fraudulent
transfer laws, the Exchange Notes and guarantees could be voided, or claims in
respect of the Exchange Notes and guarantees could be subordinated to all of our
other debts if, among other things, the Issuer or any guarantor at the time it
incurred the indebtedness evidenced by the Outstanding Notes or guarantees:
- received less than reasonably equivalent value or fair consideration for
the incurrence of such Outstanding Notes and guarantees; and
- was insolvent or rendered insolvent by reason of such incurrence; or
- was engaged in a business or transaction for which the Issuer's or such
guarantor's remaining assets constituted unreasonably small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
In addition, any payment by the Issuer or a guarantor could be voided and
required to be returned to the Issuer or such guarantor, or to a fund for the
benefit of the creditors.
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The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, the Issuer or a
guarantor would be considered insolvent if:
- the sum of such entity's debts, including contingent liabilities, were
greater than the fair saleable value of all of its assets, or
- if the present fair saleable value of its assets was less than the amount
that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and
mature, or
- it could not pay its debts as they become due.
On the basis of historical financial information, recent operating history
and other factors, we believe that at the time we incurred the debt constituting
the Outstanding Notes and guarantees, that we were not insolvent, did not have
unreasonably small capital for our business and had not incurred debts beyond
our ability to pay such debts as they mature. We cannot assure you, however, as
to what standard a court would apply in making such determinations or that a
court would agree with our conclusions in this regard.
CONSEQUENCES OF A FAILURE TO EXCHANGE OUTSTANDING NOTES -- IF HOLDERS OF THE
OUTSTANDING NOTES DO NOT EXCHANGE OTHER NOTES, THEY LOSE THEIR RIGHTS TO HAVE
SUCH NOTES REGISTERED.
We did not register the Outstanding Notes under the Securities Act or any
state securities laws, nor do we intend to after the Exchange Offer. As a
result, the Outstanding Notes may only be transferred in limited circumstances
under the securities laws. If the holders of the Outstanding Notes do not
exchange their notes in the Exchange Offer, they lose their right to have the
Outstanding Notes registered under the Securities Act, subject to certain
limitations. A holder of Outstanding Notes after the Exchange Offer may be
unable to sell the notes.
To exchange the Outstanding Notes for the Exchange Notes, the Exchange
Agent must receive (i) certificates for the Outstanding Notes or a book-entry
confirmation of the transfer of the Outstanding Notes into the Exchange Agent's
account at DTC, (ii) a completed and signed Letter of Transmittal with any
required signature guarantees, or an Exchange Agents' message in the case of a
book-entry transfer, and (iii) any other documents required by the Letter of
Transmittal. Holders of Outstanding Notes who want to exchange their notes
should allow enough time to guarantee timely delivery. We are under no duty to
give notice of defective exchanges.
LACK OF PUBLIC MARKET FOR EXCHANGE NOTES -- WE CANNOT MAKE ANY ASSURANCE
REGARDING THE LIQUIDITY OF THE MARKET FOR THE EXCHANGE NOTES.
While the Outstanding Notes are presently eligible for trading in the
PORTAL market of the NASD by qualified institutional buyers, there is no
existing market for the Exchange Notes. The initial purchasers of the
Outstanding Notes have advised us that they currently intend to make a market in
the Exchange Notes following the Exchange Offer, but they are not obligated to
do so, and any market-making may be stopped at any time without notice. We do
not intend to apply for a listing of the Exchange Notes on any securities
exchange. We do not know if an active public market for the Exchange Notes will
develop or, if developed, will continue. If an active public market does not
develop or is not maintained, the market price and liquidity of the Exchange
Notes may be adversely affected. We cannot make any assurances regarding the
liquidity of the market for the Exchange Notes, the ability of holders to sell
their Exchange Notes or the price at which holders may sell their Exchange
Notes.
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<PAGE> 34
PROCEDURES FOR TENDER OF OUTSTANDING NOTES -- IF YOU DO NOT PROPERLY TENDER YOUR
OUTSTANDING NOTES, THEY WILL CONTINUE TO BE SUBJECT TO THE EXISTING TRANSFER
RESTRICTIONS.
The Exchange Notes will be issued in exchange for the Outstanding Notes
only after timely receipt by the Exchange Agent of the Outstanding Notes, a
properly completed and executed Letter of Transmittal and all other required
documentation. If you want to tender your Outstanding Notes in exchange for
Exchange Notes, you should allow sufficient time to ensure timely delivery.
Neither the Exchange Agent nor the Company is under any duty to give you
notification of defects or irregularities with respect to tenders of Outstanding
Notes for exchange. Outstanding Notes that are not tendered or are tendered but
not accepted will, following the Exchange Offer, continue to be subject to the
existing transfer restrictions. In addition, if you tender the Outstanding Notes
in the Exchange Offer to participate in a distribution of the Exchange Notes,
you will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
For additional information, please refer to the sections entitled "The Exchange
Offer" and "Plan of Distribution" later in this Prospectus.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
Simultaneously with the sale of the Outstanding Notes, we entered into a
Registration Rights Agreement with the initial purchasers of the Outstanding
Notes -- Banc One Capital Markets, Inc. and Goldman, Sachs & Co. Under the
Registration Rights Agreement, we agreed to file a registration statement
regarding the exchange of the Outstanding Notes for notes with terms
substantially identical in all material respects. We also agreed to use our best
efforts to cause that registration statement to become effective with the
Securities and Exchange Commission. A copy of the Registration Rights Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
We are conducting the Exchange Offer to satisfy our contractual obligations
under the Registration Rights Agreement. The form and terms of the Exchange
Notes are the same as the form and terms of the Outstanding Notes, except that
the Exchange Notes will be registered under the Securities Act, and holders of
the Exchange Notes will not be entitled to liquidated damages. The Outstanding
Notes provide that, if a registration statement relating to the Exchange Offer
has not been filed by August 25, 1999 and declared effective by October 24,
1999, we will pay liquidated damages on the Outstanding Notes. Upon the
completion of the Exchange Offer, holders of Outstanding Notes will not be
entitled to any liquidated damages on the Outstanding Notes or any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors -- Consequences of a Failure to
Exchange Outstanding Notes" and "Description of Exchange Notes" for further
information regarding the rights of Outstanding Note holders after the Exchange
Offer. The Exchange Offer is not extended to Outstanding Note holders in any
jurisdiction where the Exchange Offer does not comply with the securities or
blue sky laws of that jurisdiction.
In the event that applicable interpretations of the staff of the SEC do not
permit the Company to effect the Exchange Offer, or if for any other reason the
Exchange Offer is not consummated within 180 days of May 27, 1999, we will use
our best efforts to cause to become effective a shelf registration statement
with respect to the resale of the Outstanding Notes. We also agreed to use our
best efforts to keep the shelf registration statement effective until the
earlier of May 27, 2001 and such time as all the Outstanding Notes have been
sold pursuant to such registration or are otherwise not restricted securities.
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<PAGE> 35
The term "holder" as used in this section of the Prospectus entitled "The
Exchange Offer" means (1) any person in whose name the Outstanding Notes are
registered on the books of the Company, or (2) any other person who has obtained
a properly completed bond power from the registered holder, or (3) any person
whose Outstanding Notes are held of record by DTC and who wants to deliver such
Outstanding Notes by book-entry transfer at DTC.
TERMS OF THE EXCHANGE OFFER
We are offering to exchange up to $125.0 million total principal amount of
Senior Exchange Notes for a like total principal amount of Outstanding Senior
Notes. The Outstanding Senior Notes must be tendered properly on or before the
Expiration Date and not withdrawn. In exchange for Outstanding Senior Notes
properly tendered and accepted, the Company will issue a like total principal
amount of up to $125.0 million in Senior Exchange Notes. In addition, the
Company is offering to exchange up to $125.0 million total principal amount of
Senior Subordinated Exchange Notes for a like total principal amount of
Outstanding Senior Subordinated Notes. The Outstanding Senior Subordinated Notes
also must be tendered properly on or before the Expiration Date and not
withdrawn. In exchange for Outstanding Senior Subordinated Notes properly
tendered and accepted, the Company will issue a like total principal amount of
up to $125.0 million in Senior Subordinated Exchange Notes.
The Exchange Offer is not conditioned upon holders tendering a minimum
principal amount of Outstanding Notes. As of the date of this Prospectus, $125.0
million aggregate principal amount of Senior Notes are outstanding and $125.0
million aggregate principal amount of Senior Subordinated Notes are outstanding.
Holders of the Outstanding Notes do not have any appraisal or dissenters'
rights in the Exchange Offer. If holders do not tender Outstanding Notes or
tender Outstanding Notes that the Company does not accept, their Outstanding
Notes will remain outstanding. Any Outstanding Notes will be entitled to the
benefits of the Senior Note Indenture and Senior Subordinated Note Indenture, as
applicable, but will not be entitled to any further registration rights under
the Registration Rights Agreement, except under limited circumstances. See "Risk
Factors -- Consequences of a Failure to Exchange Outstanding Notes" for more
information regarding notes outstanding after the Exchange Offer.
After the Expiration Date, we will return to the holder any tendered
Outstanding Notes that we did not accept for exchange.
Holders exchanging Outstanding Notes will not have to pay brokerage
commissions or fees or transfer taxes if they follow the instructions in the
Letter of Transmittal. The Company will pay the charges and expenses, other than
certain taxes described below, in the Exchange Offer. See "-- Fees and Expenses"
for further information regarding fees and expenses.
WE DO NOT MAKE ANY RECOMMENDATION AS TO THE TENDER OF OUTSTANDING NOTES IN
THE EXCHANGE OFFER. IN ADDITION, WE HAVE NOT AUTHORIZED ANYONE TO MAKE ANY
RECOMMENDATION. YOU MUST DECIDE WHETHER TO TENDER IN THE EXCHANGE OFFER AND, IF
SO, THE AGGREGATE AMOUNT OF OUTSTANDING NOTES TO TENDER.
The Expiration Date is 5:00 p.m., New York City time, on ,
1999 unless we extend the Exchange Offer, in our sole discretion.
We have the right, in our sole discretion, in accordance with applicable
law, at any time:
- to delay the acceptance of the Outstanding Notes;
- to terminate the Exchange Offer if the Company determines that any of the
conditions to the Exchange Offer have not occurred or have not been
satisfied;
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<PAGE> 36
- to extend the Expiration Date of the Exchange Offer and keep all
Outstanding Notes tendered other than those notes properly withdrawn; and
- to waive any condition or amend the terms of the Exchange Offer.
If we materially change the Exchange Offer, we will promptly disclose such
amendment in a manner reasonably calculated to inform holders of the Outstanding
Notes of such amendment. We also will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
If we exercise any of the rights listed above, we will promptly give oral
notice, promptly confirmed in writing, to the Exchange Agent and will issue an
appropriate public announcement. In the case of an extension, we will notify the
Exchange Agent and make an appropriate announcement no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE NOTES
We will issue Exchange Notes to the Exchange Agent for Outstanding Notes
tendered and accepted and not withdrawn promptly after the Expiration Date. The
Exchange Agent might not deliver the Exchange Notes to all tendering holders at
the same time. The timing of delivery depends upon when the Exchange Agent
receives and processes the required documents.
We will be deemed to have exchanged Outstanding Notes validly tendered and
not withdrawn when we give oral or written notice to the Exchange Agent of their
acceptance. The Exchange Agent is our agent for receiving tenders of Outstanding
Notes, Letters of Transmittal and related documents. The Exchange Agent is also
an agent for tendering holders for receiving Outstanding Notes, Letters of
Transmittal and related documents and transmitting Exchange Notes to validly
tendering holders. If, for any reason, we: (1) delay the acceptance or exchange
of any Outstanding Notes; (2) extend the Exchange Offer; or (3) are unable to
accept or exchange notes, then the Exchange Agent may, on behalf of the Company
and subject to Rule 14e-1(c) under the Exchange Act, retain tendered notes.
Notes retained by the Exchange Agent may not be withdrawn, except according to
the withdrawal procedures outlined in the section entitled "-- Withdrawal
Rights" below.
In tendering Outstanding Notes, you must warrant in the Letter of
Transmittal or in an Agent's Message (described below) that (1) you have full
power and authority to tender, exchange, sell, assign and transfer Outstanding
Notes, (2) the Company will acquire good, marketable and unencumbered title to
the tendered Outstanding Notes, free and clear of all liens, restrictions,
charges and other encumbrances, and (3) the Outstanding Notes tendered for
exchange are not subject to any adverse claims or proxies. You also must warrant
and agree that you will, upon request, execute and deliver any additional
documents requested by the Company or the Exchange Agent to complete the
exchange, sale, assignment, and transfer of the Outstanding Notes.
VALID TENDER
You may tender your Outstanding Notes by book-entry transfer or by other
means. For book-entry transfer, you must deliver to the Exchange Agent either
(1) a completed and signed Letter of Transmittal or (2) an Agent's Message,
meaning a message transmitted to the Exchange Agent by DTC stating that you
agree to be bound by the terms of the Letter of Transmittal. You must deliver
your Letter of Transmittal or the Agent's Message by mail, facsimile, hand
delivery or overnight courier to the Exchange Agent on or before the Expiration
Date. In addition, to complete a book-entry transfer, you must also either (1)
have DTC transfer the Outstanding Notes into the Exchange Agent's account at DTC
using the ATOP procedures for transfer, and obtain a confirmation of such a
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<PAGE> 37
transfer, or (2) follow the guaranteed delivery procedures described below under
"-- Guaranteed Delivery Procedures."
If you tender fewer than all of your Outstanding Notes, you should fill in
the amount of notes tendered in the appropriate box on the Letter of
Transmittal. If you do not indicate the amount tendered in the appropriate box,
the Company will assume you are tendering all Outstanding Notes that you hold.
For tendering your Outstanding Notes other than by book-entry transfer, you
must deliver a completed and signed Letter of Transmittal to the Exchange Agent.
Again, you must deliver the Letter of Transmittal by mail, facsimile, hand
delivery or overnight carrier to the Exchange Agent on or before the Expiration
Date. In addition, to complete a valid tender you must either (1) deliver your
Outstanding Notes to the Exchange Agent on or before the Expiration Date, or (2)
follow the guaranteed delivery procedures set forth below under "-- Guaranteed
Delivery Procedures."
Delivery of required documents by whatever method you choose is at your
sole risk. Delivery is complete when the Exchange Agent actually receives the
items to be delivered. Delivery of documents to DTC in accordance with DTC's
procedures does not constitute delivery to the Exchange Agent. If delivery is by
mail, registered mail, return receipt requested, properly insured, or an
overnight delivery service is recommended. In all cases, you should allow
sufficient time to ensure timely delivery.
SIGNATURE GUARANTEES
You do not need to endorse certificates for the Outstanding Notes or
provide signature guarantees on the Letter of Transmittal, unless (a) someone
other than the registered holder tenders the certificate or (b) you complete the
box entitled "Special Issuance Instructions" or "Special Delivery Instructions"
in the Letter of Transmittal. In the case of (a) or (b) above, you must sign
your Outstanding Note or provide a properly executed bond power, with the
signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution." Eligible Guarantor Institutions include: (1) a
bank; (2) a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (3) a credit union; (4) a national securities
exchange, registered securities association or clearing agency; or (5) a savings
association that is a participant in a securities transfer association.
GUARANTEED DELIVERY
If a holder wants to tender Outstanding Notes in the Exchange Offer and (1)
the certificates for the Outstanding Notes are not immediately available or all
required documents are unlikely to reach the Exchange Agent on or before the
Expiration Date, or (2) a book-entry transfer cannot be completed in time, the
Outstanding Notes may be tendered if the holder complies with the following
guaranteed delivery procedures:
(a) the tender is made by or through an Eligible Institution;
(b) you deliver a properly completed and signed Notice of Guaranteed
Delivery, like the form provided with the Letter of Transmittal, to the
Exchange Agent on or before the Expiration Date; and
(c) you deliver the certificates or a confirmation of book-entry transfer
and a properly completed and signed Letter of Transmittal to the
Exchange Agent within three New York Stock Exchange trading days after
the Notice of Guaranteed Delivery is executed.
You may deliver the Notice of Guaranteed Delivery by hand, facsimile or
mail to the Exchange Agent and must include a guarantee by an Eligible
Institution in the form described in the notice.
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Our acceptance of properly tendered Outstanding Notes is a binding
agreement between the tendering holder and us upon the terms and subject to the
conditions of the Exchange Offer.
DETERMINATION OF VALIDITY
We will resolve all questions regarding the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tendered Outstanding Notes. Our resolution of these questions as well as our
interpretation of the terms and conditions of the Exchange Offer (including the
Letter of Transmittal) is final and binding on all parties. A tender of
Outstanding Notes is invalid until all irregularities have been cured or waived.
Neither the Company, any affiliates or assigns of the Company, the Exchange
Agent nor any other person is under any obligation to give notice of any
irregularities in tenders nor will they be liable for failing to give any such
notice. We reserve the absolute right, in our sole and absolute discretion, to
reject any tenders determined to be in improper form or unlawful. We also
reserve the absolute right to waive any of the conditions of the Exchange Offer
or any condition or irregularity in the tender of Outstanding Notes by any
holder. We need not waive similar conditions or irregularities in the case of
other holders.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
that person must indicate that capacity when signing. In addition, unless waived
by us, the person must submit proper evidence satisfactory to us, in our sole
discretion, of his or her authority to so act.
A beneficial owner of Outstanding Notes that are held by or registered in
the name of a broker, dealer, commercial bank, trust company or other nominee or
custodian should contact that entity promptly if the holder wants to participate
in the Exchange Offer.
RESALES OF EXCHANGE NOTES
We are exchanging the Outstanding Notes for Exchange Notes based upon the
Staff of the Securities and Exchange Commission's position, set forth in
interpretive letters to third parties in other similar transactions. We will not
seek our own interpretive letter. As a result, we cannot assure you that the
Staff will take the same position on this Exchange Offer as it did in
interpretive letters to other parties. Based on the Staff's letters to other
parties, we believe that holders of Exchange Notes, other than broker-dealers,
can offer the notes for resale, resell and otherwise transfer the Exchange Notes
without delivering a prospectus to prospective purchasers. However, prospective
purchasers must acquire the Exchange Notes in the ordinary course of business
and have no intention of engaging in a distribution of the notes, as a
"distribution" is defined by the Securities Act.
Any holder of Outstanding Notes who is an "affiliate" of the Company or who
intends to distribute Exchange Notes, or any broker-dealer who purchased
Outstanding Notes from the Company to resell pursuant to any available exemption
under the Securities Act:
- cannot rely on the Staff's interpretations in the above mentioned
interpretive letters;
- cannot tender Outstanding Notes in the Exchange Offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act to transfer the Outstanding Notes, unless the sale is
exempt.
In addition, if any broker-dealer acquired Outstanding Notes for its own
account as a result of market-making or other trading activities and exchanges
the Outstanding Notes for Exchange Notes, the broker-dealer must deliver a
prospectus with any resales of the Exchange Notes.
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If you want to exchange your Outstanding Notes for Exchange Notes, you will
be required to affirm that:
- you are not an "affiliate" of the Company;
- you are acquiring the Exchange Notes in the ordinary course of your
business;
- you have no arrangement or understanding with any person to participate
in a distribution of the Exchange Notes (within the meaning of the
Securities Act); and
- you are not a broker-dealer, not engaged in, and do not intend to engage
in, a distribution of the Exchange Notes (within the meaning of the
Securities Act).
In addition, we may require you to provide information regarding the number
of "beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act)
of the Outstanding Notes. Each broker-dealer that receives Exchange Notes for
its own account must acknowledge that it acquired the Outstanding Notes for its
own account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of Exchange
Notes. By making this acknowledgment and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" under the
Securities Act. Based on the Staff's position in certain interpretive letters,
we believe that broker-dealers who acquired Outstanding Notes for their own
accounts as a result of market-making activities or other trading activities may
fulfill their prospectus delivery requirements with respect to the Exchange
Notes with a prospectus meeting the requirements of the Securities Act.
Accordingly, a broker-dealer may use this Prospectus to satisfy such
requirements. We have agreed that a broker-dealer may use this Prospectus for a
period ending 270 days after the Expiration Date or, if earlier, when a
broker-dealer has disposed of all Exchange Notes. See "Plan of Distribution" for
further information. A broker-dealer intending to use this Prospectus in the
resale of Exchange Notes must notify us, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. This notice may be given in the Letter
of Transmittal or may be delivered to the Exchange Agent. Any Participating
Broker-Dealer who is an "affiliate" of the Company may not rely on the Staff's
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act when reselling Exchange Notes.
Each Participating Broker-Dealer exchanging Outstanding Notes for Exchange
Notes agrees that, upon receipt of notice from the Company (a) of any statement
contained or incorporated by reference in this Prospectus that makes the
Prospectus untrue in any material respect or that this Prospectus omits to state
a material fact necessary to make the statements contained or incorporated by
reference herein, in light of the circumstances under which they were made, not
misleading or (b) of the occurrence of certain other events specified in the
Registration Rights Agreement, the Participating Broker-Dealer will suspend the
sale of Exchange Notes. A Participating Broker-Dealer will not resell the
Exchange Notes until (1) the Company has amended or supplemented this Prospectus
to correct such misstatement or omission and the Company furnishes copies to the
Participating Broker-Dealer or (2) the Company gives notice that the sale of the
Exchange Notes may be resumed. If the Company gave notice suspending the sale of
Exchange Notes, it shall extend the 270-day period by the number of days between
the date Company gives notice of suspension and the date Participating
Broker-Dealers receive copies of the amended or supplemented prospectus or the
date the Company gives notice resuming the sale of Exchange Notes.
WITHDRAWAL RIGHTS
You can withdraw tenders of Outstanding Notes at any time prior to 5:00
p.m., New York City time on or before the Expiration Date.
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<PAGE> 40
For a withdrawal to be effective, you must deliver a written or facsimile
transmission of a Notice of Withdrawal to the Exchange Agent on or before the
Expiration Date. The Notice of Withdrawal must specify the name of the person
tendering the Outstanding Notes to be withdrawn, the total principal amount of
Outstanding Notes withdrawn, and the name of the registered holder of the
Outstanding Notes if different from the person tendering the Outstanding Notes.
If you delivered Outstanding Notes to the Exchange Agent, you must submit the
serial numbers of the Outstanding Notes to be withdrawn and the signature on the
Notice of Withdrawal must be guaranteed by an Eligible Institution, except in
the case of Outstanding Notes tendered for the account of an Eligible
Institution. If you tendered Outstanding Notes as a book-entry transfer, the
Notice of Withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Outstanding Notes and you must deliver the
Notice of Withdrawal to the Exchange Agent by written or facsimile transmission.
Outstanding Notes properly withdrawn may again be tendered at any time on or
before the Expiration Date.
We will determine all questions regarding the validity, form and
eligibility of withdrawal notices. Our determination will be final and binding
on all parties. Neither the Company, any affiliate or assign of the Company, the
Exchange Agent nor any other person is under any obligation to give notice of
any irregularities in any Notice of Withdrawal, nor will they be liable for
failing to give any such notice. Withdrawn Outstanding Notes will be returned to
the holder after withdrawal.
INTEREST ON EXCHANGE NOTES
The Senior Exchange Notes will bear interest at a rate of 11% per annum and
the Senior Subordinated Exchange Notes will bear interest at a rate of 12% per
annum, both payable semi-annually, on June 1 and December 1 of each year,
commencing December 1, 1999. Holders of Exchange Notes will receive interest on
December 1, 1999 from the date of initial issuance of the Exchange Notes, plus
an amount equal to the accrued interest on the Outstanding Notes. Interest on
the Outstanding Notes accepted for exchange will cease to accrue upon issuance
of the Exchange Notes.
CONDITIONS TO THE EXCHANGE OFFER
We need not exchange any Outstanding Notes, may terminate the Exchange
Offer or may waive any conditions to the Exchange Offer or amend the Exchange
Offer, if any of the following conditions have occurred:
(a) the Staff no longer allows the Exchange Notes to be offered for resale,
resold and otherwise transferred by certain holders without compliance
with the registration and prospectus delivery provisions of the
Securities Act; or
(b) a governmental body passes any law, statute, rule or regulation which,
in the Company's opinion, prohibits or prevents the Exchange Offer; or
(c) the Securities and Exchange Commission or any state securities
authority issues a stop order suspending the effectiveness of the
registration statement or initiates or threatens to initiate a
proceeding to suspend the effectiveness of the registration statement;
or
(d) We are unable to obtain any governmental approval that we believe is
necessary to complete the Exchange Offer.
If we reasonably believe that any of the above conditions has occurred, we
may (1) terminate the Exchange Offer, whether or not any Outstanding Notes have
been accepted for exchange, (2) waive any condition to the Exchange Offer or (3)
amend the terms of the Exchange Offer in any respect. If our waiver or amendment
materially changes the Exchange Offer, we will promptly disclose the waiver or
amendment in a manner reasonably calculated to inform the registered holders
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<PAGE> 41
of the Outstanding Notes. We will also extend the Exchange Offer to the extent
required by Rule 14e-1 of the Exchange Act.
EXCHANGE AGENT
We have appointed The Huntington National Bank as Exchange Agent for the
Exchange Offer. You should direct questions and requests for assistance,
requests for additional copies of this Prospectus or of the Letter of
Transmittal and requests for Notice of Guaranteed Delivery to the Exchange Agent
addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: Facsimile Transmissions:
The Huntington National Bank The Huntington National Bank
41 South High Street -- HC1112 Attention: Corporate Trust Department
Columbus, Ohio 43215 (614) 480-5223
Attention: Corporate Trust Department
By Hand or Overnight Delivery: New York Drop Agent:
The Huntington National Bank The Bank of New York
41 South High Street -- HC1112 101 Barclay Street
Columbus, Ohio 43215 New York, New York 10286
Attention: Corporate Trust Department
</TABLE>
If you deliver Letters of Transmittal and any other required documents to
an address or facsimile number other than those listed above, your tender is
invalid.
FEES AND EXPENSES
We will pay all fees and expenses of soliciting tenders for the Outstanding
Notes. We will also pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for its reasonable out-of-pocket expenses.
We will pay the transfer taxes for the exchange of the Outstanding Notes in
the Exchange Offer. If, however, Exchange Notes are delivered to or issued in
the name of a person other than the registered holder, or if a transfer tax is
imposed for any reason other than for the exchange of Outstanding Notes in the
Exchange Offer, then the tendering holder will pay the transfer taxes. If a
tendering holder does not submit satisfactory evidence of payment of taxes or
exemption from taxes with the Letter of Transmittal, the taxes will be billed
directly to the tendering holder.
We have not retained any dealer-manager in connection with the Exchange
Offer and will not make any payment to brokers, dealers or other nominees
soliciting acceptances in the Exchange Offer.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Outstanding Notes. Accordingly, we will not recognize any gain or loss for
accounting purposes. We intend to amortize the expenses of the Exchange Offer
and issuance of the Outstanding Notes over the respective terms of the Senior
Exchange Notes and Senior Subordinated Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not exchange your Outstanding Notes for Exchange Notes pursuant
to the Exchange Offer, you will continue to be subject to the restrictions on
transfer of such Outstanding Notes, as set forth in the legend contained in such
notes as a consequence of the issuance of the Outstanding Notes pursuant to the
exemptions from, or in transactions not subject to, the registration
35
<PAGE> 42
requirements of the Securities Act and applicable state securities laws. In
general, you may not offer or sell the Outstanding Notes unless they are
registered under the Securities Act, except pursuant to an exemption from, or in
a transaction not subject to, the Securities Act and applicable state securities
laws. We do not currently anticipate registering the Outstanding Notes under the
Securities Act. Based on interpretations by the staff of the Commission, you may
offer for resale, sell or otherwise transfer the Exchange Notes issued pursuant
to the Exchange Offer (unless you are an "affiliate" of the company within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that you acquired such Exchange Notes in the ordinary course of your business
and you have no arrangement or understanding with respect to the distribution of
the Exchange Notes to be acquired pursuant to the Exchange Offer. If you tender
in the Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes, you (i) may not rely on the applicable interpretations of the
staff of the Commission and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction. In addition, to comply with the securities laws of
certain jurisdictions, if applicable, you may not offer or sell the Exchange
Notes unless the notes have been registered or the laws have been complied with.
We have agreed, pursuant to the Registration Rights Agreement and subject to
certain specified limitations therein, to register or qualify the Exchange Notes
for offer or sale under the securities or blue sky laws of such jurisdictions as
are necessary to consummate the Exchange Offer.
THE ACQUISITION
Pursuant to the terms of the definitive agreements relating to the
Acquisition, Venture acquired all of the outstanding capital stock of Peguform
GmbH from its parent, Klockner Mercator Maschinenbau GmbH, a wholly-owned
subsidiary of Klockner-Werke AG, and another, nominal shareholder on May 28,
1999. The aggregate purchase price for the Acquisition was DEM 850 million
(approximately $455.0 million as of May 28, 1999), reduced by the amount of
certain indebtedness for borrowed money, including indebtedness to
Klockner-Werke AG, all of which was repaid at closing. The purchase price is
subject to adjustment based upon the amount by which working capital or net
equity of Peguform is less than, or exceeds, applicable targets. The purchase
price was paid in cash. See "Business -- The Acquisition."
USE OF PROCEEDS
The Exchange Offer will not generate cash proceeds for the Company. We used
the proceeds from the offering of the Outstanding Notes together with $380.3
million drawn under the New Credit Agreement, as follows: (1) approximately
$448.0 million was used to fund the cash consideration paid in the Acquisition
(excluding $7.0 million of acquired indebtedness included in the $455.0 million
aggregate purchase price); (2) approximately $82.8 million was used to redeem
the 1994 Notes, including prepayment premium; (3) approximately $75.0 million
was used to refinance Venture's senior credit facility (the "Prior Credit
Agreement"); and (4) approximately $24.5 million was used to pay certain fees
and expenses related to the Acquisition and the offering of the Outstanding
Notes. For a description of the Acquisition, see "Business -- The Acquisition."
On May 27, 1999, Venture entered into the New Credit Agreement. The New
Credit Agreement, as amended, provides for credit facilities in the principal
amount of $575.0 million, including a $175.0 million Revolving Credit Facility
and Term Loans aggregating $400.0 million.
36
<PAGE> 43
The following table summarizes the sources and uses of funds from the New
Credit Agreement and the sale of the Outstanding Notes.
<TABLE>
<S> <C>
SOURCES OF FUNDS:
New Credit Agreement(1):
Revolving Credit Facility................................. $ 5,300
Term Loans................................................ 375,000
Senior Notes................................................ 125,000
Senior Subordinated Notes................................... 125,000
--------
Total Sources............................................. $630,300
========
USES OF FUNDS:
Acquisition(2).............................................. $448,000
Prior Credit Agreement...................................... 75,000
1994 Notes(3)............................................... 82,800
Fees and Expenses........................................... 24,500
--------
Total Uses................................................ $630,300
========
</TABLE>
- -------------------------
(1) As of June 4, 1999 we entered into an amendment to the New Credit Agreement,
which increased the Term Loans from $375.0 million to $400.0 million and
reduced the Revolving Credit Facility from $200.0 million to $175.0 million.
See "Description of Certain Indebtedness -- New Credit Agreement."
(2) Excluding $7.0 million of acquired indebtedness included in the $455.0
million aggregate purchase price.
(3) Includes the redemption of the 1994 Notes in the aggregate principal amount
of $78.9 million, and a prepayment premium of approximately $3.9 million.
37
<PAGE> 44
CAPITALIZATION
The following table sets forth (1) cash and cash equivalents and the actual
capitalization of Venture at March 31, 1999, and (2) pro forma as adjusted
capitalization of the Company to give effect to (a) the Acquisition; (b) the
refinancing of the Prior Credit Agreement and redemption of the 1994 Notes; (c)
the sale of the Outstanding Notes and the application of the net proceeds
therefrom and (d) borrowings under the New Credit Facility, as if such
transactions had occurred on March 31, 1999. See "The Acquisition;" "Use of
Proceeds;" and "Unaudited Pro Forma Financial Statements." This information
should be read in conjunction with the unaudited pro forma balance sheet, the
consolidated financial statements and the Notes thereto of Venture and Peguform
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere herein.
<TABLE>
<CAPTION>
MARCH 31, 1999
-----------------------
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... $ 3,153 $ 11,425
======== ========
Long-term debt (including current portion)
Prior Credit Agreement.................................... $ 75,000 $ --
New Credit Agreement(1):
Revolving Credit Facility.............................. -- 5,300
Term Loans............................................. -- 375,000
Capital leases............................................ 2,056 31,876
Installment Notes payable................................. 1,660 1,660
Other long-term debt(2)................................... -- 7,038
1997 Senior Notes......................................... 205,000 205,000
11% Senior Notes due 2007................................. -- 125,000
1994 Notes................................................ 78,940 --
12% Senior Subordinated Notes due 2009.................... -- 125,000
-------- --------
Total long-term debt................................... $362,656 $875,874
Trust principal(3).......................................... 85,219 78,096
-------- --------
Total capitalization................................... $447,875 $953,970
======== ========
</TABLE>
- -------------------------
(1) On June 4, 1999 we entered into an amendment to the New Credit Agreement
which increased the Term Loans from $375,000 to $400,000 and reduced the
Revolving Credit Facility to allow for borrowings of up to $175,000, subject
to a borrowing base formula. In addition to secured debt, as of March 31,
1999, on a pro forma basis, there will be $2,975 of letters of credit
outstanding under the Revolving Credit Facility. See "Description of Certain
Indebtedness -- New Credit Agreement."
(2) Indebtedness associated with Peguform's 70% owned Mexican joint venture.
(3) Pro forma amount represents amount as adjusted downward for (a) the
elimination of Peguform's stockholders' equity, adjusted by $1,498 for
accumulated other comprehensive income relating to Peguform's minimum
pension liability, and (b) the repayment of the 1994 Notes of $78,940, the
pre-payment premium of $3,848 paid to retire the 1994 Notes early and the
write-off of $1,777 in unamortized financing costs associated with the
repayment of the 1994 Notes.
38
<PAGE> 45
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The information set forth under the heading Pro Forma included in the
Unaudited Consolidated Pro Forma Balance Sheet as of March 31, 1999 (December
31, 1998 for Peguform) reflects: (1) the Acquisition; (2) the refinancing of the
Prior Credit Agreement and redemption of the 1994 Notes; (3) the offering of the
Outstanding Notes and borrowings under the New Credit Agreement, and the
application of the net proceeds therefrom to the Company as described under "Use
of Proceeds," as if such transactions had occurred on such date.
The Unaudited Consolidated Pro Forma Statement of Operations for the year
ended December 31, 1998 gives effect to: (1) the Acquisition; (2) the
refinancing of the Prior Credit Agreement and redemption of the 1994 Notes; and
(3) the offering of the Outstanding Notes and borrowings under the New Credit
Agreement, and the application of the net proceeds therefrom to the Company as
described in "Use of Proceeds," as if such transactions had occurred on January
1, 1998. The Unaudited Consolidated Pro Forma Statement of Operations for the
three months ended March 31, 1999 (three months ended December 31, 1998 for
Peguform) gives effect to: (1) the Acquisition; (2) the refinancing of the Prior
Credit Agreement and redemption of the 1994 Notes; and (3) the offering of the
Outstanding Notes and borrowings under the New Credit Agreement, and the
application of the net proceeds therefrom to the Company as described in "Use of
Proceeds," as if such transactions had occurred on January 1, 1999.
The Unaudited Pro Forma Consolidated Statement of Operations does not
include pro forma adjustments for certain non-recurring costs and charges,
consisting of (1) the prepayment charge of $3.9 million on the redemption of the
1994 Notes and (2) the $1.8 million write-off of deferred financing costs.
The Unaudited Pro Forma Financial Statements do not reflect any of the
anticipated cost savings which the Company expects to achieve through
integration of the operations of Peguform and Venture. See "Business -- The
Acquisition" and "-- Business Strategy."
Solely for the convenience of the readers, the historical financial
information for Peguform has been translated to United States dollars at the
rate of DEM 1.6767 per United States dollar, the Noon Buying Rate as of December
31, 1998. The translation should not be construed as a representation that the
amounts shown could be converted into United States dollars at such rate or any
other rate.
The unaudited pro forma financial data presented herein are based on the
assumptions and adjustments described in the accompanying notes. The Unaudited
Consolidated Pro Forma Statement of Operations does not purport to represent
what the Company's results of operations actually would have been if the events
described above had occurred as of the dates indicated or what such results will
be for any future periods. The Unaudited Pro Forma Financial Statements are
based upon assumptions and adjustments that we believe are reasonable. The
Unaudited Pro Forma Financial Statements and the accompanying notes should be
read in conjunction with the historical financial statements of Venture and of
Peguform, including the notes thereto, included elsewhere in this prospectus.
39
<PAGE> 46
VENTURE HOLDINGS COMPANY LLC
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
AS OF MARCH 31, 1999 (DECEMBER 31, 1998 FOR PEGUFORM)
<TABLE>
<CAPTION>
HISTORICAL
---------------------- PRO FORMA
VENTURE PEGUFORM(A) ADJUSTMENTS PRO FORMA
-------- ----------- ----------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.......... $ 3,153 $ 8,272 $ $ 11,425
Accounts receivable................ 200,067 159,272 359,339
Inventories........................ 53,288 115,285 168,573
Prepaid expenses/Other............. 8,648 6,270 14,918
-------- -------- ---------- ----------
Total current assets............ 265,156 289,099 554,255
Property, Plant & Equipment -- Net... 196,226 312,021 508,247
Intangible Assets.................... 51,552 39,332 (38,640)(B) 176,176
123,932(C)
Other Assets......................... 26,547 8,169 21,900(D) 54,839
(1,777)(E)
Deferred Tax Assets.................. 11,035 3,014 14,049
-------- -------- ---------- ----------
Total assets.................... $550,516 $651,635 $ 105,415 $1,307,566
======== ======== ========== ==========
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable................... $ 62,506 $151,377 $ $ 213,883
Accrued payroll & taxes............ 10,331 32,860 43,191
Accrued interest................... 6,274 -- 6,274
Other accrued expenses............. 5,701 28,191 33,892
Current portion of long-term
debt............................ 1,588 216,077 (209,614)(F) 8,051
-------- -------- ---------- ----------
Total current liabilities....... 86,400 428,505 (209,614) 305,291
Other Liabilities.................... 5,948 30,487 36,435
Deferred Tax Liabilities............. 11,881 8,040 19,921
Long-Term Debt....................... 361,068 56,184 630,300(G) 867,823
(25,789)(F)
(78,940)(E)
(75,000)(H)
-------- -------- ---------- ----------
Total liabilities............... 465,297 523,216 240,957 1,229,470
Trust Principal/Stockholders
Equity............................. 85,219 128,419 (129,917)(I) 78,096
(5,625)(E)
-------- -------- ---------- ----------
Total Liabilities and Trust
Principal/ Stockholders'
Equity........................ $550,516 $651,635 $ 105,415 $1,307,566
======== ======== ========== ==========
</TABLE>
See notes to Unaudited Consolidated Pro Forma Balance Sheet.
40
<PAGE> 47
VENTURE HOLDINGS COMPANY LLC
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
AS OF MARCH 31, 1999 (DECEMBER 31, 1998 FOR PEGUFORM)
(DOLLARS IN THOUSANDS)
(A) For purposes of the Unaudited Consolidated Pro Forma Balance Sheet, certain
items included in Peguform's historical balance sheet have been
reclassified to conform to Venture's historical balance sheet presentation
as follows:
(1) "Prepaid expenses/Other" includes the sum of "Deferred tax assets" and
"Prepaid expenses" as classified in the unaudited Consolidated Balance
Sheet of Peguform as of December 31, 1998;
(2) "Other accrued expenses" includes the sum of "Other accrued expenses,"
"Income taxes payable," "Deferred tax liabilities (short term)" and
"Other current liabilities and deferred income" as classified in the
unaudited Consolidated Balance Sheet of Peguform as of December 31,
1998; and
(3) "Other Liabilities" includes the sum of "Accrued for pension
obligations," "Minority interest" and "Other non-current liabilities
and deferred income" as classified in the unaudited Consolidated
Balance Sheet of Peguform as of December 31, 1998.
(B) The pro forma adjustment represents the elimination of goodwill recorded on
Peguform's balance sheet at December 31, 1998.
(C) The pro forma adjustment represents the estimated goodwill resulting from
the Acquisition. We are in the process of obtaining certain evaluations,
estimations, appraisals and actuarial and other studies for purposes of
computing the final amount of goodwill and allocating the portion of
goodwill applicable to other balance sheet line items. We may revise our
original estimate of goodwill as additional information is available.
(D) The pro forma adjustment represents the financing costs of $21,900 related
to the additional debt to finance the Acquisition, repay certain
indebtedness and pay related fees and expenses.
(E) The pro forma adjustments represent the repayment of the 1994 Notes of
$78,940, the pre-payment premium of $3,848 paid to retire the 1994 Notes
early and the write-off of $1,777 in unamortized financing costs associated
with the 1994 Notes.
<TABLE>
<CAPTION>
EXTRAORDINARY
ITEM
-------------
<S> <C>
Prepayment premium on 1994 Notes............................ $3,848
Unamortized Financing Costs................................. 1,777
------
$5,625
======
</TABLE>
(F) Represents the repayment of Peguform debt as follows:
<TABLE>
<S> <C>
Current portion of long-term debt........................... $209,614
Long-term Debt.............................................. 25,789
</TABLE>
41
<PAGE> 48
(G) The pro forma adjustment represents the additional debt necessary to finance
the Acquisition, repay certain indebtedness and pay related fees and
expenses.
<TABLE>
<S> <C>
Additional Debt (long term):
New Credit Agreement(1)
Revolving Credit Facility.............................. $ 5,300
Term Loans............................................. 375,000
11% Senior Notes due 2007................................. 125,000
12% Senior Subordinated Notes due 2009.................... 125,000
--------
$630,300
========
</TABLE>
(1) As of June 4, 1999 the New Credit Agreement was amended to increase
the Term Loans from $375,000 to $400,000 and reduce the Revolving
Credit Facility from $200,000 to $175,000.
(H) The pro forma adjustment represents the repayment of the Company's senior
credit facility outstanding balance of $75,000.
(I) The pro forma adjustment represents the elimination of Peguform's
stockholders' equity, adjusted by $1,498 for accumulated other
comprehensive income relating to Peguform's minimum pension liability.
42
<PAGE> 49
VENTURE HOLDINGS COMPANY LLC
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
---------------------- PRO FORMA
VENTURE PEGUFORM(A) ADJUSTMENTS PRO FORMA
-------- ----------- ----------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales.......................... $645,196 $1,288,256 $ $1,933,452
Cost of products sold.............. 532,809 1,145,740 1,678,549
-------- ---------- -------- ----------
Gross profit....................... 112,387 142,516 254,903
Selling, general and administrative
expense.......................... 59,689 125,038 4,268(C) 192,290
3,295(D)
Payments to beneficiary in lieu of
trust distributions.............. 535 -- 535
-------- ---------- -------- ----------
Income (loss) from operations...... 52,163 17,478 (7,563) 62,078
Interest expense (net)............. 36,641 14,022(B) 18,699(E) 69,362(B)
-------- ---------- -------- ----------
Net income (loss) before taxes..... 15,522 3,456 (26,262) (7,284)
Tax provision (benefit)............ 1,954 3,556 (14,444)(F) (8,934)
Minority interest.................. -- (574) (574)
-------- ---------- -------- ----------
Net income (loss).................. $ 13,568 $ 474 $(11,818) $ 2,224
======== ========== ======== ==========
</TABLE>
See notes to the Unaudited Consolidated Pro Forma Statement of Operations
43
<PAGE> 50
VENTURE HOLDINGS COMPANY LLC
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
(A) The Peguform statement of operations represents the 12-months ended December
31, 1998. Amounts were derived from Peguform's audited financial statements
for the year ended September 30, 1998, and from unaudited financial
statements for the 3 months ended December 31, 1998, less the amounts from
unaudited financial statements for the 3 months ended December 31, 1997.
For purposes of the Unaudited Consolidated Pro Forma Statement of
Operations, certain items included in Peguform's historical financial data
have been reclassified to conform to Venture's historical statement of
operations presentations as follows:
(1) "Net sales" includes the sum of "net sales" and "other revenues" as
classified in and calculated from Peguform's Consolidated Statements of
Income; and
(2) "Selling, general and administrative expense" includes the sum of
"Selling, general and administrative expenses" and "Other expenses" as
classified in and calculated from Peguform's Consolidated Statements of
Income.
(B) The Peguform historical and pro forma amounts are net of interest income of
$3,364 at Peguform for the 12 months ended December 31, 1998.
(C) The pro forma adjustment represents the amortization of goodwill resulting
from the Acquisition over a 30 year period.
(D) The pro forma adjustment represents the amortization of financing costs
resulting from the financing of the Acquisition, including the New Credit
Agreement and the Outstanding Notes, over the respective maturities of the
additional debt. The maturities of the New Credit Agreement range from 18
months to 6 years, and maturities on the 11% Senior Notes due 2007 and 12%
Senior Subordinated Notes due 2009 are assumed to be 8 and 10 years,
respectively.
(E) The pro forma adjustment represents the incremental interest expense
necessary to reflect the total interest expense on the outstanding debt of
the combined Company for the period.
<TABLE>
<S> <C>
Elimination of historical interest expense.................. $(31,022)
Interest expense with respect to New Credit Agreement(1).... 32,215
Interest expenses with respect to Notes(2).................. 22,500
Reduction in interest expense with respect to 1997
Senior Notes(3)........................................... (4,994)
--------
Total incremental interest................................ $ 18,699
========
</TABLE>
(1) Assumes that loans under the New Credit Agreement (which bear interest
at floating rates) bear interest at a weighted average interest rate of
8.05% per annum, including the impact of existing interest rate swap
agreements, and that the New Credit Agreement maintains an average
outstanding balance of $400,000.
(2) We entered into interest rate swaps with 5 year terms which effectively
convert our United States dollar fixed rate coupon on the Notes to a
euro fixed rate coupon. We entered into this arrangement to take
advantage of lower interest rates in Europe and to hedge our
44
<PAGE> 51
exchange rate risk. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources Following the Acquisition." Interest expense on the Notes
reflects these interest rate swaps, with a weighted average interest
rate of 11.50% on the Senior Notes and Senior Subordinated Notes
converted into a weighted average euro interest rate of 9.00%. These
instruments may not qualify for hedge accounting, which may result in
non-cash charges to earnings related to the mark to market on the
swaps.
(3) We entered into interest rate swaps with 3-year terms which effectively
convert our United States dollar fixed rate coupon on the 1997 Senior
Notes to a euro fixed rate coupon. We entered into this arrangement to
take advantage of lower interest rates in Europe and to hedge our
exchange rate risk. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources Following the Acquisition." Interest expense on the 1997
Senior Notes reflects these interest rate swaps with an interest rate
of 9.50% converted into a euro interest rate of 7.09%. These
instruments may not qualify for hedge accounting, which may result in
non-cash charges to earnings related to the mark to market on the
swaps.
(4) Our actual interest expense could differ from the above amounts based
on increases in interest rates on floating rate debt. An increase of
0.25% in interest rates on anticipated borrowings under the New Credit
Agreement would have the effect of increasing interest expense by $0.9
million.
(F) The pro forma adjustment represents the tax impact at the applicable
statutory rates for Peguform of (55%).
45
<PAGE> 52
VENTURE HOLDINGS COMPANY LLC
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999
(THREE MONTHS ENDED DECEMBER 31, 1998 FOR PEGUFORM)
<TABLE>
<CAPTION>
HISTORICAL
---------------------- PRO FORMA
VENTURE PEGUFORM(A) ADJUSTMENTS PRO FORMA
-------- ----------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales................................ $165,992 $345,738 $ $511,730
Cost of products sold.................... 133,070 309,789 442,859
-------- -------- -------- --------
Gross profit............................. 32,922 35,949 68,871
Selling, general and administrative
expense................................ 14,270 31,611 1,033(C) 47,737
823(D)
Payments to beneficiary in lieu of trust
distributions.......................... -- --
-------- -------- -------- --------
Income (loss) from operations............ 18,652 4,338 (1,856) 21,134
Interest expense (net)................... 9,479 3,777(B) 4,553(E) 17,809
-------- -------- -------- --------
Net income (loss) before taxes........... 9,173 561 (6,409) 3,325
Tax provision (benefit).................. 1,067 476 (3,525)(F) (1,982)
Minority interest........................ -- (275) (275)
-------- -------- -------- --------
Net income (loss)........................ $ 8,106 $ 360 $ (2,884) $ 5,582
======== ======== ======== ========
</TABLE>
See notes to the Unaudited Consolidated Pro Forma Statement of Operations
46
<PAGE> 53
VENTURE HOLDINGS COMPANY LLC
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999
(THREE MONTHS ENDED DECEMBER 31, 1998 FOR PEGUFORM)
(DOLLARS IN THOUSANDS)
(A) The Peguform statement of operations represents the 3-months ended December
31, 1998. Amounts were derived from Peguform's unaudited financial
statements for the 3-months ended December 31, 1998.
For purposes of the Unaudited Consolidated Pro Forma Statement of
Operations, certain items included in Peguform's historical financial data
have been reclassified to conform to Venture's historical statement of
operations presentations as follows:
(1) "Net sales" includes the sum of "net sales" and "other revenues" as
classified in and calculated from Peguform's Consolidated Statements of
Income; and
(2) "Selling, general and administrative expense" includes the sum of
"Selling, general and administrative expenses" and "Other expenses" as
classified in and calculated from Peguform's Consolidated Statements of
Income.
(B) The Peguform historical and pro forma amounts are net of interest income of
$317 at Peguform for the 3-months ended December 31, 1998.
(C) The pro forma adjustment represents the amortization of goodwill resulting
from the Acquisition over a 30 year period.
(D) The pro forma adjustment represents the amortization of financing costs
resulting from the financing of the Acquisition, including the New Credit
Agreement and the Outstanding Notes, over the respective maturities of the
additional debt. The maturities of the New Credit Agreement range from 18
months to 6 years, and maturities on the 11% Senior Notes due 2007 and 12%
Senior Subordinated Notes due 2009 are assumed to be 8 and 10 years,
respectively.
(E) The pro forma adjustment represents the incremental interest expense
necessary to reflect the total interest expense on the outstanding debt of
the combined Company for the period.
<TABLE>
<S> <C>
Elimination of historical interest expense.................. $ (7,777)
Interest expense with respect to New Credit Agreement(1).... 8,102
Interest expenses with respect to Notes(2).................. 5,625
Reduction in interest expense with respect to 1997
Senior Notes(3)........................................... (1,397)
--------
Total incremental interest................................ $ 4,553
========
</TABLE>
(1) Assumes that loans under the New Credit Agreement (which bear interest
at floating rates) bear interest at a weighted average interest rate of
8.10% per annum, including the impact of existing interest rate swap
agreements, and that the New Credit Agreement maintains an average
outstanding balance of $400,000.
(2) We entered into interest rate swaps with 5 year terms which effectively
convert our United States dollar fixed rate coupon on the Notes to a
euro fixed rate coupon. We entered into this arrangement to take
advantage of lower interest rates in Europe and to hedge our exchange
rate risk. See "Management's Discussion and Analysis of Financial
Condition and
47
<PAGE> 54
Results of Operations -- Liquidity and Capital Resources Following the
Acquisition." Interest expense on the Notes reflects these interest
rate swaps, with a weighted average interest rate of 11.50% on the
Senior Notes and Senior Subordinated Notes converted into a weighted
average euro interest rate of 9.00%. These instruments may not qualify
for hedge accounting, which may result in non-cash charges to earnings
related to the mark to market on the swaps.
(3) We entered into interest rate swaps with 3 year terms which effectively
convert our United States dollar fixed rate coupon on the 1997 Senior
Notes to a euro fixed rate coupon. We entered into this arrangement to
take advantage of lower interest rates in Europe and to hedge our
exchange rate risk. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources Following the Acquisition." Interest expense on the 1997
Senior Notes reflects these interest rate swaps with an interest rate
of 9.50% converted into a euro interest rate of 7.09%. These
instruments may not qualify for hedge accounting, which may result in
non-cash charges to earnings related to the mark to market on the
swaps.
(4) Our actual interest expense could differ from the above amounts based
on increases in interest rates on floating rate debt. An increase of
0.25% in interest rates on anticipated borrowings under the New Credit
Agreement would have the effect of increasing interest expense by $0.2
million.
(F) The pro forma adjustment represents the tax impact at the applicable
statutory rates for Peguform of (55%).
48
<PAGE> 55
SELECTED CONSOLIDATED FINANCIAL DATA OF VENTURE
The selected consolidated balance sheet data and income statement data
presented below as of December 31, 1998 and 1997 and for the years ended
December 31, 1998, 1997 and 1996, are derived from Venture's consolidated
financial statements, audited by Deloitte & Touche LLP, independent auditors,
and should be read in conjunction with Venture's audited consolidated financial
statements and notes thereto included elsewhere herein. The selected
consolidated income statement data and balance sheet data presented below as of
December 31, 1996, 1995 and 1994 and for the years ended December 31, 1995 and
1994, are derived from Venture's audited consolidated financial statements not
included herein. The selected consolidated income statement data and balance
sheet data as of March 31, 1998 and 1999 and for the three months then ended,
are derived from unaudited financial statements but, in the opinion of
management, reflect all adjustments, consisting of only normal recurring
adjustments, necessary for a fair statement of the results for such periods and
as of such dates. The results for the three months ended March 31, 1999 are not
necessarily indicative of the results to be expected for the full fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- -----------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- --------- ---------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1)(2):
Net sales.............................. $244,112 $251,142 $351,777 $624,113 $645,196 $166,612 $165,992
Cost of products sold.................. 199,717 211,262 302,940 521,361 532,809 133,616 133,070
-------- -------- -------- -------- -------- -------- --------
Gross profit......................... 44,395 39,880 48,837 102,752 112,387 32,996 32,922
Selling, general and administrative
expense.............................. 19,200 20,129 26,588 57,217 59,689 14,855 14,270
Payments to beneficiary in lieu of
taxes................................ 3,405 577 666 472 535 -- --
-------- -------- -------- -------- -------- -------- --------
Income from operations................. 21,790 19,174 21,583 45,063 52,163 18,141 18,652
Interest expense....................... 14,345 15,032 19,248 30,182 36,641 7,145 9,479
-------- -------- -------- -------- -------- -------- --------
Net income before extraordinary items
and taxes............................ 7,445 4,142 2,335 14,881 15,522 10,996 9,173
Net extraordinary loss on early
retirement of debt................... -- -- 2,738 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income (loss) after extraordinary
items................................ 7,445 4,142 (403) 14,881 15,522 10,996 9,173
Tax provision(3)....................... -- -- 336 3,358 1,954 1,465 1,067
-------- -------- -------- -------- -------- -------- --------
Net income (loss)...................... $ 7,445 $ 4,142 $ (739) $ 11,523 $ 13,568 $ 9,531 $ 8,106
Ratio of earnings to fixed
charges(4)........................... 1.7x 1.3x 1.2x 1.5x 1.4x 1.9x 1.7x
OTHER FINANCIAL DATA:
EBITDA(5).............................. $ 41,021 $ 37,001 $ 46,123 $ 80,391 $ 94,216 $ 28,336 $ 30,205
Depreciation and amortization.......... 14,070 16,068 22,628 32,147 39,320 9,079 10,794
Capital expenditures................... 22,798 20,339 64,593 33,012 24,706 8,371 2,688
Net cash provided by (used in):
Operating activities................. (3,066) 10,950 35,003 (13,058) (5,393) (6,729) 7,995
Investing activities................. (22,798) (20,339) (121,547) (37,093) (24,706) (8,371) (2,688)
Financing activities................. 53,643 (655) 82,976 36,192 28,752 21,608 (2,284)
</TABLE>
49
<PAGE> 56
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- -----------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- --------- ---------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital........................ $ 85,258 $ 74,354 $ 83,404 $125,101 $168,655 $156,076 $178,756
Property, plant and equipment -- net... 111,472 116,299 203,975 205,765 200,544 205,529 196,226
Total assets........................... 234,435 231,602 498,067 524,122 541,315 564,341 550,516
Total debt............................. 153,118 152,463 299,996 336,188 364,939 357,796 362,656
Trust principal........................ 49,356 53,498 52,759 64,282 77,113 73,813 85,219
</TABLE>
- -------------------------
(1) The Issuer operates as a holding company and has no independent operations
of its own. Separate financial statements of the Issuer's subsidiaries have
not been presented because we do not believe that such information would be
material.
(2) The results for 1996 include the operations of Bailey from August 26, 1996,
and of AutoStyle from June 3, 1996.
(3) This provision relates solely to Venture Holdings Corporation (which
operates Bailey) and its subsidiaries (see Note 2 above). Other significant
subsidiaries and the Issuer have elected "S" corporation status under the
Code or are LLCs (taxed as partnerships) and, consequently, do not incur
liability for federal and certain state income taxes.
(4) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of net income before extraordinary items and fixed charges. Fixed
charges consist of (1) interest, whether expensed or capitalized; (2)
amortization of debt discount and debt financing costs; and (3) the portion
of rental expense that management believes is representative of the interest
component of rental expense.
(5) EBITDA represents income from operations before deducting taxes (including
the Michigan single business tax), depreciation, amortization, interest and
payment to beneficiary in lieu of taxes. EBITDA is not presented as an
alternative to net income, as a measure of operating results or as an
indicator of Venture's performance, nor is it presented as an alternative to
cash flow or as a measure of liquidity, but rather to provide additional
information related to debt service capacity. EBITDA should not be
considered in isolation or as a substitute for net income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability. EBITDA, while commonly used, is not
calculated uniformly by all companies and should not be used as a
comparative measure without further analysis, nor does EBITDA necessarily
represent funds available for discretionary use. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for a discussion of liquidity and operating results.
50
<PAGE> 57
SELECTED CONSOLIDATED FINANCIAL DATA OF PEGUFORM
The selected consolidated balance sheet data and income statement data
presented below as of September 30, 1997 and 1998 and for the years ended
September 30, 1997 and 1998, are derived from Peguform's audited financial
statements, audited by BDO International GmbH Wirtschaftsprufungsgesellschaft,
independent auditors, and should be read in conjunction with the audited
consolidated financial statements and notes thereto included elsewhere herein.
The selected condensed consolidated financial data as presented below as of and
for the three month periods ended December 31, 1997 and 1998 are derived from
unaudited financial statements but, in the opinion of management, reflect all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair statement of the results for such periods and as of such dates. The results
for the three months ended December 31, 1998 are not necessarily indicative of
results to be expected for the full fiscal year.
Solely for the convenience of the readers, the following consolidated
financial statements have been translated to United States dollars at the rate
of DEM 1.6767 per United States dollar, the Noon Buying Rate as of December 31,
1998. The translation should not be construed as a representation that the
amounts shown could be converted into United States dollars at such rate or any
other rate.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- ----------------------
1997 1998 1997 1998
----------- ----------- --------- ---------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales..................................... $ 992,953 $1,179,518 $263,518 $344,561
Other revenues................................ 10,567 27,272 754 1,177
---------- ---------- -------- --------
Total revenues................................ 1,003,520 1,206,790 264,272 345,738
Cost of products sold......................... 884,146 1,077,184 241,233 309,789
Gross profit.................................. 119,374 129,606 23,039 35,949
Selling, general and administrative
expenses.................................... 92,102 119,902 22,613 30,660
Other expenses................................ 4,487 1,436 5,298 951
Interest expense (net)........................ 13,877 14,309 4,064 3,777
---------- ---------- -------- --------
Income before income taxes.................. 8,908 (6,041) (8,936) 561
Taxes on income............................... 3,596 3,614 534 476
Minority interest............................. 369 (301) (2) (275)
---------- ---------- -------- --------
Net income (loss)............................. $ 4,943 $ (9,354) $ (9,468) $ 360
OTHER FINANCIAL DATA:
EBITDA(1)..................................... $ 77,278 $ 64,947 $ 9,735 $ 19,575
EBITDA, as adjusted(2)........................ 76,040
Depreciation and amortization................. 52,381 52,922 14,196 14,645
Capital Expenditures.......................... 60,842 85,616 22,101 14,156
</TABLE>
51
<PAGE> 58
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- ----------------------
1997 1998 1997 1998
----------- ----------- --------- ---------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
(AT END OF PERIOD):
Working capital(3)............................ $ 45,668 $ 43,061 $ 78,255 $ 25,443
Property, plant and equipment (net)........... 291,178 319,198 297,206 312,021
Total assets.................................. 625,446 663,224 676,969 651,635
Total debt.................................... 245,464 273,287 323,199 272,261
Total stockholders' equity.................... 130,239 128,011 119,930 128,419
</TABLE>
- -------------------------
(1) EBITDA represents income from operations, net of minority interest, before
deducting taxes, depreciation, amortization, and interest. EBITDA is not
presented as an alternative to net income, as a measure of operating results
or as an indicator of Peguform's performance, nor is it presented as an
alternative to cash flow or as a measure of liquidity, but rather to provide
additional information related to debt service capacity. EBITDA should not
be considered in isolation or as a substitute for net income or cash flow
data prepared in accordance with generally accepted accounting principles or
as a measure of a company's profitability. EBITDA, while commonly used, is
not calculated uniformly by all companies and should not be used as a
comparative measure without further analysis, nor does EBITDA necessarily
represent funds available for discretionary use. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for a discussion of liquidity and operating results.
(2) EBITDA (as adjusted) represents EBITDA plus a non-recurring charge of
$11,093 related to start-up production costs on the Mercedes A-Class
hatchback program.
(3) Working capital does not include loans payable to Peguform's parent of
$158,031 at September 30, 1997, $183,957 at September 30, 1998, $209,922 at
December 31, 1997 and $164,850 at December 31, 1998. All outstanding
intercompany loans were be repaid as part of the purchase price for the
Acquisition.
52
<PAGE> 59
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS -- VENTURE
The following table sets forth, for the periods indicated, Venture's
consolidated statements of income expressed as a percentage of net sales. This
table and the subsequent discussion should be read in conjunction with Venture's
consolidated financial statements and notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
AS A PERCENTAGE OF NET SALES
-------------------------------------
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
--------------------- -------------
1996 1997 1998 1998 1999
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales.......................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of products sold.............................. 86.1 83.5 82.6 80.2 80.2
----- ----- ----- ----- -----
Gross profit....................................... 13.9 16.5 17.4 19.8 19.8
Selling, general and administrative expenses....... 7.6 9.2 9.2 8.9 8.6
Payments to beneficiary in lieu of Trust
distributions.................................... 0.2 0.1 0.1 0.0 0.0
----- ----- ----- ----- -----
Income from operations............................. 6.1 7.2 8.1 10.9 11.2
Interest expense................................... 5.4 4.8 5.7 4.3 5.7
----- ----- ----- ----- -----
Income before extraordinary items and taxes........ 0.7 2.4 2.4 6.6 5.5
Extraordinary loss on retirement of debt........... 0.8 -- -- -- --
----- ----- ----- ----- -----
Income (loss) before taxes......................... (0.1) 2.4 2.4 6.6 5.5
Tax provision...................................... 0.1 0.5 0.3 0.9 0.6
----- ----- ----- ----- -----
Net income (loss).................................. (0.2)% 1.9% 2.1% 5.7% 4.9%
===== ===== ===== ===== =====
</TABLE>
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
Net sales for the first quarter of 1999 decreased $0.6 million, or 0.4%,
from the first quarter of 1998. Net sales were relatively flat due primarily to
lower tooling sales in the first quarter of 1999 compared to the first quarter
of 1998, offset by increased component sales.
Gross profit for the first quarter of 1999 decreased $0.1 million to $32.9
million compared to $33.0 million for the first quarter of 1998. As a percentage
of net sales, gross profit remained constant at 19.8%. During the first quarter
of 1999, a $1.4 million reserve was reversed relating to the renegotiation of a
contract. Excluding the impact of the reserve reversal, the gross profit margin
during the first quarter of 1999 was 19.0%. As compared to the first quarter of
1998 gross profit margin, the first quarter 1999 gross profit margin was lower
as a result of a decrease in tooling sales, which generally account for higher
margins than sales of components.
Selling, general and administrative expense for the first quarter of 1999
decreased $0.6 million, or 4.0%, to $14.3 million compared to $14.9 million for
the first quarter of 1998. As a percentage of net sales, selling, general and
administrative expense decreased from 8.6% for the first quarter of 1999 as
compared to 8.9% for the first quarter of 1998. The decrease is primarily
attributable to cost cutting efforts at the corporate office.
53
<PAGE> 60
As a result of the foregoing, income from operations for the first quarter
of 1999 increased $0.6 million, or 2.8%, to $18.7 million, compared to $18.1
million for the first quarter of 1998. As a percentage of net sales, income from
operations increased to 11.2% for the first quarter of 1999 from 10.9% for the
first quarter of 1998.
Interest expense for the first quarter of 1999 increased $2.4 million, to
$9.5 million, as compared to $7.1 million for the first quarter of 1998. The
increase is the result of additional borrowing under Venture's revolving credit
facility to fund increased working capital needs.
Due to the foregoing, net income for the first quarter of 1999 decreased
$1.4 million, or 15.0%, to $8.1 million compared to $9.5 million for the first
quarter of 1998.
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
Net sales increased $21.1 million for the year ended December 31, 1998, or
3.4%, to $645.2 million, compared to net sales of $624.1 million for the year
ended December 31, 1997. The increase in net sales in 1998 is primarily a result
of increased volumes in the comparable business offset by planned price
reductions mandated by customers under sole-source arrangements for product life
cycles. Venture's productivity improvements for these products partially offset
the planned price reductions. Net sales during the second and third quarters of
1998 were impacted negatively due to strikes at certain General Motors plants.
Venture believes that a portion of these lost sales were recouped in the fourth
quarter of 1998 as GM accelerated production to refill its distribution
channels.
Gross profit for the year ended December 31, 1998 increased $9.7 million,
or 9.4%, to $112.4 million compared to $102.7 million for the year ended
December 31, 1997. As a percentage of net sales, gross profit increased from
16.5% to 17.4% for the year ended December 31, 1998, which was in part due to
the increased volumes associated with product rationalizations among the
facilities and continued cost cutting efforts. During the fourth quarter of
1998, Venture resolved several commercial issues which resulted in the recovery
of gross profit lost during current and prior years. The resolution of these
issues resulted in an additional $7.4 million of gross profit. Gross profits
continue to be under pressure attributable to selling price reductions, as OEMs
continue to expect annual productivity improvements on the part of their
suppliers.
Selling, general and administrative expense for 1998 of $59.7 million, or
9.3% of net sales, is comparable with selling, general and administrative
expense of $57.2 million, or 9.2% of net sales, for 1997.
Payments to the beneficiary of the Trust, in amounts generally equal to
taxes incurred by the beneficiary as a result of the activities of the Trust's
subsidiaries which have elected "S" corporation status under the Code or are
LLCs (taxed as partnerships), totaled $0.5 million in 1998 and 1997. These
amounts were paid as compensation rather than as distributions of Trust
principal.
As a result of the foregoing, income from operations in the year ended
December 31, 1998 increased $7.1 million, or 15.8%, to $52.2 million, compared
to $45.1 million in fiscal 1997. As a percentage of net sales, income from
operations increased to 8.1% in fiscal 1998 from 7.2% in fiscal 1997.
Interest expense increased $6.4 million to $36.6 million in fiscal 1998
compared to $30.2 million in fiscal 1997. The increase is the result of
additional borrowing under the Prior Credit Agreement to fund increased working
capital needs.
Due to the foregoing, net income for the year ended December 31, 1998
increased $2.1 million, to $13.6 million compared to $11.5 million for the year
ended December 31, 1997.
54
<PAGE> 61
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
The period to period comparisons are substantially effected by the 1996
Acquisitions.
Net sales increased $272.3 million for the year ended December 31, 1997, or
77.4%, to $624.1 million, compared to net sales of $351.8 million for the year
ended December 31, 1996. The increase in net sales was primarily the result
having the benefit of a full year of the Bailey and AutoStyle operating sales.
The operating sales for 1996 represented only the activities subsequent to the
1996 Acquisitions (AutoStyle in June 1996, Bailey in August 1996). The following
table explains the changes (in millions).
<TABLE>
<CAPTION>
NET SALES
YEAR ENDED
DECEMBER 31,
----------------
1997 1996 INCREASE
------ ------ --------
<S> <C> <C> <C>
Bailey...................................................... $224.8 $ 72.6 $152.2
AutoStyle................................................... 96.5 38.9 57.6
Comparable.................................................. 302.8 240.3 62.5
------ ------ ------
Total.................................................. $624.1 $351.8 $272.3
====== ====== ======
</TABLE>
Sales were less in the last half of the year than were expected for the
Chrysler LH due to a slow new model changeover.
Gross profit for the year ended December 31, 1997 increased $53.9 million,
or 110.4%, to $102.7 million compared to $48.8 million for the year ended
December 31, 1996. As a percentage of net sales, gross profit increased from
13.9% to 16.5% for the year ended December 31, 1997, which was in part due to
the increased volumes associated with product rationalizations among the
facilities and cost cutting efforts at Bailey. However, gross profit was
unfavorably impacted by new model introductions and launch costs in the third
and fourth quarter. Gross profits continued to be under pressure attributable to
selling price reductions, as OEMs continued to expect annual productivity
improvements on the part of their suppliers. In addition, Venture's sales were
shifting more to products produced using the injection molding process, which
traditionally have had higher margins. During the fourth quarter of 1997 certain
reserves were reevaluated and reduced by $2.8 million reflecting changes in
circumstances and estimates and were recorded as reductions in cost of products
sold.
Selling, general and administrative expenses increased $30.6 million, or
115.2%, for fiscal 1997 to $57.2 million, compared to $26.6 million in fiscal
1996. As a percentage of net sales, selling, general and administrative expenses
increased to 9.2% for the year ended December 31, 1997, compared to 7.6% in
1996. The increase was generally due to the acquisition of Bailey and the
attendant cost of its operations.
Payments to the beneficiary of the Trust, in the amounts generally equal to
taxes incurred by the beneficiary as a result of the activities of the Trust's
subsidiaries which have elected "S" corporation status under the Code or are
LLCs (taxed as partnerships), totaled $0.5 million and $0.7 million in fiscal
1997 and 1996, respectively. These amounts were paid as compensation rather than
as distributions of Trust principal.
As a result of the foregoing, income from operations in the year ended
December 31, 1997 increased $23.5 million, or 108.8%, to $45.1 million, compared
to $21.6 million in fiscal 1996. As a percentage of net sales, income from
operations increased to 7.2% in fiscal 1997 from 6.1% in fiscal 1996.
55
<PAGE> 62
Interest expense increased $10.9 million to $30.2 million in fiscal 1997
compared to $19.2 million in fiscal 1996. The increase was the result of the
senior credit agreement entered into on August 26, 1996 to fund the Bailey
acquisition, subsequent refinancing and issuance of $205.0 million 1997 Senior
Notes in the third quarter of 1997 and increased working capital needs.
Due to the foregoing, net income for the year ended December 31, 1997
increased $12.2 million, to $11.5 million compared to $(0.7) million for the
year ended December 31, 1996.
RESULTS OF OPERATIONS -- PEGUFORM
The following table sets forth, for the periods indicated, Peguform's
consolidated statements of income expressed as a percentage of total revenues.
This table and the subsequent discussion should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
AS A PERCENTAGE OF TOTAL REVENUE
--------------------------------
THREE MONTHS
YEARS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
-------------- --------------
1997 1998 1997 1998
----- ----- ----- -----
(DOLLARS IN (DOLLARS IN
THOUSANDS) THOUSANDS)
<S> <C> <C> <C> <C>
Net sales.............................................. 98.9% 97.7% 99.7% 99.7%
Other revenues......................................... 1.1 2.3 0.3 0.3
----- ----- ----- -----
Total Revenues......................................... 100.0 100.0 100.0 100.0
----- ----- ----- -----
Cost of products sold.................................. 88.1 89.3 91.3 89.6
----- ----- ----- -----
Gross profit........................................... 11.9 10.7 8.7 10.4
Selling, general and administrative expenses........... 9.2 9.9 8.6 8.8
Other expenses......................................... 0.4 0.1 2.0 0.3
Interest expense (net)................................. 1.4 1.2 1.5 1.1
----- ----- ----- -----
Income (loss) before taxes............................. 0.9 (0.5) (3.4) 0.2
Tax provision.......................................... 0.4 0.3 0.2 0.1
Minority interest...................................... (0.0) 0.0 0.0 0.0
----- ----- ----- -----
Net income (loss)...................................... 0.5% (0.8)% (3.6)% 0.1%
</TABLE>
THREE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
1997
Net sales increased $81.1 million for the three months ended December 31,
1998, or 30.8%, to $344.6 million, compared to net sales of $263.5 million for
the three months ended December 31, 1997. The increase in net sales is primarily
a result of increased volume in Germany and the Czech Republic and a shift in
the sales mix. The increased volume is due primarily to the effect of sales
relating to new product launches in prior periods.
Other revenues increased $0.4 million for the three months ended December
31, 1998, or 50.0%, to $1.2 million compared to $0.8 million for the three
months ended December 31, 1997. The increase was primarily a result of reversal
of reserves established in previous periods.
Gross profit for the three months ended December 31, 1998 increased $12.9
million, or 56.1%, to $35.9 million compared to $23.0 million for the three
months ended December 31, 1997. As a
56
<PAGE> 63
percentage of total revenues, gross profit increased from 8.7% to 10.4% for the
three months ended December 31, 1998 which was primarily due to the lack of
start-up costs associated with new product launch activities in the prior year's
quarter and the result of action plans to control operating costs. Gross profits
continue to be under pressure attributable to selling price reductions, as OEMs
continue to expect annual productivity improvements on the part of their
suppliers.
Selling, general and administrative expense for the three months ended
December 31, 1998 were $30.7 million, or 8.8% of total revenues, as compared to
$22.6 million, or 8.6% of total revenues, for the three months ended December
31, 1997 or an increase of $8.1 million. This increase was primarily a result of
support for the increased sales volume, the operations in Mexico and Brazil,
which are not expected to generate meaningful net sales until the fourth quarter
of the calendar year ending December 31, 1999, and increased data processing
costs related to the increased sales volume.
Interest expense (net) decreased $0.3 million to $3.8 million for the three
months ended December 31, 1998 compared to $4.1 million for the three months
ended December 31, 1997. The decrease is the result of a decrease in borrowing
due to lower working capital requirements.
Due to the foregoing, net income for the three months ended December 31,
1998 increased $9.9 million, to $0.4 million compared to a net loss of $9.5
million for the three months ended December 31, 1997.
YEAR ENDED SEPTEMBER 30, 1998 COMPARED TO YEAR ENDED SEPTEMBER 30, 1997
Net sales increased $186.6 million for the year ended September 30, 1998,
or 18.8%, to $1,179.5 million, compared to net sales of $992.9 million for the
year ended September 30, 1997. The increase in net sales in 1998 is primarily a
result of increased volumes in Germany and the Czech Republic and a shift in the
sales mix, offset by planned reductions in the selling prices mandated by
customers. The increased volume is due primarily to increased volumes in the
European automotive market, as well as the effect of sales relating to new
product launches in prior periods.
Other revenues increased $16.7 million for the year ended September 30,
1998, or 157.5% to $27.3 million, compared to $10.6 million for the year ended
September 30, 1997. The increase was primarily due to sales of services to
Klockner-Werke AG performed by Peguform at cost and the sale of certain assets
in France and the Czech Republic.
Gross profit for the year ended September 30, 1998 increased $10.2 million,
or 8.5%, to $129.6 million, compared to $119.4 million for the year ended
September 30, 1997. As a percentage of total revenues, gross profit decreased
from 11.9% to 10.7% for the year ended September 30, 1998, which was in part due
to the start-up of new programs in France and Germany, production difficulties
related to the launch of the Mercedes A Class hatchback door program, and
selling price reductions. These reductions were offset by favorable action plans
to reduce costs and increased sales volumes. Peguform believes that the Mercedes
A-Class hatchback production issues have been resolved. Gross profits continue
to be under pressure attributable to selling price reductions, as OEMs continue
to expect annual productivity improvements on the part of their suppliers.
Selling, general and administrative expenses for September 30, 1998 were
$119.9 million, or 9.9% of total revenues, as compared to $92.1 million, or 9.2%
of total revenues, for September 30, 1997, or an increase of $27.8 million. This
increase was due in part to support the growth in net sales coupled with the
establishment of new operations in Mexico and Brazil that are not expected to
generate meaningful net sales until the fourth quarter of calendar year ending
December 31, 1999.
Interest expense (net) increased $0.4 million to $14.3 million in fiscal
1998 compared to $13.9 million in fiscal 1997. The increase is the result of
additional borrowing to fund increased working capital needs and capital
expenditures.
57
<PAGE> 64
Due to the foregoing, net income for the year ended September 30, 1998
decreased $14.3 million, to a net loss for the year of $9.4 million compared to
net income of $4.9 million for the year ended September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Venture's consolidated working capital was $168.7 million at December 31,
1998, compared to $125.1 million at December 31, 1997, an increase of $43.6
million. Venture's working capital ratio increased to 3.1x at December 31, 1998
from 2.3x at December 31, 1997, as a result of increased receivables, primarily
from related parties, and a reduction in accounts payable. At March 31, 1999,
working capital was $178.8 million and Venture's working capital ratio was 3.1x.
Venture's principal sources of liquidity are internally generated funds,
cash equivalent investments and borrowings under its credit facility. Net cash
used in operating activities was $5.4 million for 1998, and $13.1 million for
1997. Net cash provided by operating activities was $35.0 million for 1996, and
$8.0 million for the 3 months ended March 31, 1999. The decrease in cash used in
operations from 1997 to 1998 is due primarily to higher net income, increases in
non-cash charges, such as depreciation and amortization, and reductions in the
net increase in current assets. Peguform's principal source of liquidity
historically has been cash from operations and funding from its parent.
Peguform's net cash flows provided by operating activities were $44.7 million
and $38.0 million for the years ended September 30, 1997 and 1998, respectively,
and $14.1 million for the three months ended December 31, 1998.
Net cash used in investing activities by Venture was $24.7 million, $37.1
million and $121.6 million in 1998, 1997 and 1996, respectively, and $2.7
million for the 3 months ended March 31, 1999. The 1996 amount is primarily for
the acquisition of Bailey. Venture's capital expenditures for the 3 months ended
March 31, 1999, and for years ended 1998 and 1997 were for the purchase of
machinery and equipment, leasehold improvements and the expansion of facilities
to accommodate increased volumes and for general refurbishment. Peguform's
capital expenditures for the year ending September 30, 1998 were approximately
$85.6 million, including $14.2 million and $9.4 million relating to the start-up
of Peguform's Brazilian facility and Mexican facility, respectively. Peguform's
capital expenditures for the three-month period ended December 31, 1998 were
approximately $14.2 million, including $2.0 million relating to the start-up of
Peguform's Brazilian facility. Venture believes that it has sufficient capacity
to meet current manufacturing production needs through the 2001 model year.
In the ordinary course of business, Venture seeks additional business with
existing and new customers. Venture continues to compete for the right to supply
new components which could be material to it and require substantial capital
investment in machinery, equipment, tooling and facilities. As of the date
hereof, however, Venture has no formal commitments with respect to any such
material business, other than business acquired as a consequence of the
Acquisition, and there is no assurance that Venture will be awarded any such
business.
Net cash from financing activities by Venture was $28.8 million in 1998 and
$36.2 million in 1997. In 1997, Venture issued the 1997 Senior Notes. The net
proceeds of $199.0 million from the sale of the 1997 Senior Notes was used to
repay term loans and amounts outstanding under the revolving credit portion of
the Prior Credit Agreement. As a result, less cash was provided by financing
activities during 1998 as compared with 1997. Net cash used in financing
activities for the 3 months ended March 31, 1999 was $2.3 million, relating to a
repayment on the revolving credit portion of the Prior Credit Agreement.
Venture's debt obligations contain various restrictive covenants that
require it to maintain stipulated financial ratios, including a minimum
consolidated net worth (adjusted yearly), fixed
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charge coverage ratio, interest coverage ratio and total indebtedness ratio. As
of each of December 31, 1998 and March 31, 1999, Venture was in compliance with
all debt covenants.
The Prior Credit Agreement allowed Venture to borrow up to the lesser of a
borrowing base computed as a percentage of accounts receivable and inventory, or
$200.0 million less the amount of any letter of credit issued against the Prior
Credit Agreement. Venture had issued letters of credit of approximately $3.0
million at December 31, 1998 against this agreement, thereby reducing the
maximum availability to $197.0 million, and pursuant to the borrowing base
formula could have borrowed $120.4 million, of which $77.0 million was
outstanding thereunder. As of May 27, 1999, $93.5 million was outstanding under
the Prior Credit Agreement.
LIQUIDITY AND CAPITAL RESOURCES FOLLOWING THE ACQUISITION
The aggregate purchase price of the Acquisition was approximately DEM 850
million (approximately $455.0 million as of May 28, 1999), reduced by the amount
of certain indebtedness for borrowed money, and subject to post-closing
adjustments. In addition, Venture estimates an additional $24.5 million of fees,
expenses and post-closing adjustments associated with the Acquisition. Venture
completed the Acquisition on May 28, 1999. The Acquisition is accounted for as a
purchase.
In connection with the Acquisition, we entered into the New Credit
Agreement. The New Credit Agreement, as amended, provides for borrowings of (1)
up to $175.0 million under the Revolving Credit Facility, which, in addition to
those matters described below, will be used for working capital and general
corporate purposes; (2) $75.0 million under Term Loan A; (3) $200.0 million
under Term Loan B; and (4) $125.0 million under Interim Term Loan. The New
Credit Agreement requires that $125.0 million principal amount outstanding
thereunder be refinanced within 18 months from the closing date utilizing the
proceeds from the sale of securities that rank pari passu in right of payment
with, or are junior to, the 12% Senior Subordinated Notes due 2009. See "Risk
Factors -- Substantial Leverage." The Revolving Credit Facility will permit us
to borrow up to the lesser of a borrowing base computed as a percentage of
accounts receivable and inventory, or $175.0 million less the amount of any
letter of credit issued against the New Credit Agreement. Pursuant to the
borrowing base formula as of December 31, 1998 we could have utilized the full
amount available under the Revolving Credit Facility.
Interest rates under the New Credit Agreement are based on the London
Interbank Offer Rate ("LIBOR"), Alternate Base Rate ("ABR"), which is the larger
of the bank's corporate base rate of interest announced from time-to-time or the
federal funds rate plus 1/2% per annum, and, in the case of non-dollar
denominated loans, a euro currency reference rate. Interest rates will be
determined by reference to the relevant interest rate option, plus an Applicable
Margin (as defined) based on the Company's Consolidated Ratio of Total Debt to
EBITDA. Obligations under the New Credit Agreement will be jointly and severally
guaranteed by the Trust's domestic subsidiaries and will be secured by first
priority security interests in substantially all of the assets of the Trust and
its domestic subsidiaries. The New Credit Agreement will contain certain
restrictive covenants, which we expect will be similar in nature to those in the
Prior Credit Agreement. The New Credit Agreement will become effective
contemporaneously with the completion of the Acquisition. See "Description of
Certain Indebtedness -- New Credit Agreement."
Proceeds from the offering of the Outstanding Notes, together with
borrowings under the New Credit Agreement were used to (1) fund cash
consideration paid in the Acquisition; (2) redeem the 1994 Notes, including
prepayment premium; (3) refinance the Prior Credit Agreement; (4) pay certain
fees and expenses related to the Acquisition and the offering of the Outstanding
Notes; and (5) fund working capital and other general corporate purposes.
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We expect our budget for capital expenditures during the remainder of 1999
to be approximately $70.0 million, which is expected to be financed either with
cash generated from operations or borrowings under the New Credit Agreement.
The Issuer must rely upon distributions from its subsidiaries and repayment
of principal and interest on intercompany loans made by the Issuer to its
subsidiaries to generate funds necessary to meet its obligations, including
payment of principal and interest on the Exchange Notes. The ability of the
Issuer's subsidiaries to pay dividends and make other payments or advances to
the Issuer may be limited. See "Risk Factors -- Company Structure; Not all
Subsidiaries are Guarantors."
In connection with the offering of the Outstanding Notes, we entered into
hedging obligations and interest rate swaps totalling approximately $455.0
million, $250.0 million of which have a maturity of 5 years and $205.0 million
of which have a maturity of 3 years. These hedging obligations and interest rate
swaps effectively convert our United States dollar fixed rate coupon on the
Outstanding Notes and the 1997 Senior Notes to a euro fixed rate coupon. These
instruments may not qualify for hedge accounting, which may result in non-cash
charges to earnings related to the mark to market on the swaps. We entered into
this arrangement to take advantage of lower interest rates in Europe and to
hedge our exchange rate risk. See Note E to "Notes to Unaudited Consolidated Pro
Forma Statement of Operations."
The Issuer's ability to make scheduled payments of principal of, or to pay
the interest or Liquidated Damages, if any, on, or to refinance, its
indebtedness (including the Exchange Notes), finance its working capital
requirements and other operating needs or to fund planned capital expenditures
will depend on its future performance, which, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory and other
factors that are beyond its control. Based upon the current level of operations,
management believes that cash flow from operations and available cash, together
with available borrowings under the New Credit Agreement, will be adequate to
meet the Issuer's future liquidity needs for at least the next several years.
The Issuer may, however, need to refinance all or a portion of the principal of
the Exchange Notes on or prior to maturity. There can be no assurance that the
Issuer's business will generate sufficient cash flow from operations, or that
future borrowings will be available under the New Credit Agreement in an amount
sufficient to enable the Issuer to service its indebtedness, including the
Exchange Notes, or to fund its other liquidity needs. The New Credit Agreement
requires the Issuer to refinance $125.0 million principal amount outstanding
under the New Credit Agreement within 18 months from the closing date, utilizing
the proceeds from the sale of securities that are pari passu in right of payment
with, or junior to, the 12% Senior Subordinated Notes 2009. There can be no
assurance that the Issuer will be able to effect any such refinancing on
commercially reasonable terms or at all.
YEAR 2000 COMPLIANCE
As is the case with most companies using computers in their operations, we
are in the process of addressing the year 2000 problem. The year 2000 issue is
the result of computer programs being written using two digits rather than four
digits to define the applicable year. Any of our systems, equipment, or hardware
that have date sensitive software or embedded chips may recognize a date using
"00" as the year 1900 rather than year 2000. This could result in a system
failure or miscalculations causing disruption of operations, including among
other things, a temporary inability to properly manufacture products, process
transactions, send invoices or engage in similar normal business activities.
Based on our initial assessments, we determined that we needed to modify or
replace certain portions of our equipment, hardware, and software so that
affected systems will properly utilize dates beyond December 31, 1999. We
presently believe that, with modifications and some replacement of existing
equipment, hardware and software, the year 2000 issue will be mitigated.
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Our plan to resolve the year 2000 issue is being implemented by each of our
facilities and involves six phases:
- inventory;
- risk assessment;
- prioritization and ownership assignment;
- compliance research;
- remediation; and
- testing.
The inventory, risk assessment, prioritization, and ownership assignment
phases were performed concurrently and are substantially complete. The
compliance research phase is substantially complete at all of our facilities.
The remediation and testing phases are expected to be substantially completed by
August 31, 1999 in North America and have already been substantially completed
at our foreign operations, other than France. In France the remediation and
testing phases are expected to be substantially completed by September 30, 1999.
In North America, our year 2000 plan is being completed on a facility by
facility basis. For our foreign operations, it is being completed on a country
by country basis. It is estimated that the compliance research phase is
approximately 99% complete in all of our locations, the remediation phase is
approximately 85% complete in North America and 99% complete elsewhere, and the
testing phase is approximately 80% complete in North America and 85% complete in
other countries.
Our year 2000 inventory of potentially affected items is segregated into
four categories:
- business application (developed software, customized extensions to
purchased software and systems interfaces);
- tools and platforms (purchased commercial products, both hardware and
software);
- intelligent devices (manufacturing, laboratory, office and facilities
equipment); and
- external business partners (suppliers, customers and other service
providers).
Business applications and tools and platforms are considered information
technology ("IT") systems, while intelligent devices and external business
partners are considered non-IT systems.
Concerning IT systems, several of our facilities that share existing
applications will upgrade those applications to year 2000 compliant versions.
All other facilities have already made their systems year 2000 compliant. Our
facilities in Germany and Spain have received "Status Green" in TUV year 2000
audits. TUV is the European equivalent of the Automotive Industry Action Group
in the United States.
With respect to non-IT systems, we have dedicated resources to assist in
identifying potentially affected intelligent devices. Determination of
compliance status, remediation, and testing of these devices may be more
difficult than IT systems, as some of the manufacturers of potentially affected
equipment may no longer be in business.
The external business partners category of potentially affected items
primarily includes the process of identifying and prioritizing critical
suppliers and customers, and communicating with them about their plans and
progress in addressing the year 2000 problem. We have developed a questionnaire
that we have used to obtain this information from key existing business
partners. To date we are not aware of any problems that would materially impact
results of operations, liquidity, or capital resources. However, we have no
means of ensuring that these parties will be year 2000 ready and the inability
of these parties to successfully complete their year 2000 compliance program
could impact us. For key business partners, the initial assessments are
evaluated and, as deemed necessary,
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follow-up assessments are made. We expect this process to be ongoing throughout
1999. We are in the process of developing contingency plans to address potential
year 2000 exposure.
We have utilized both internal and external resources to repair or replace,
test, and implement software and operating equipment for year 2000
modifications. We are unable to estimate with any certainty the total cost of
the year 2000 project. We have not, however, seen a significant increase in our
IT cost nor in the normal overhead cost associated with our facilities.
Primarily all of the costs of the year 2000 project have been expensed and have
been funded through normal operating cash flow or bank borrowings.
The failure to remediate a material year 2000 problem could result in an
interruption in, or a failure of, certain of our normal business activities or
operations, including our ability to produce or deliver products to our
customers. Such failures could materially or adversely affect our results of
operations, liquidity, and financial condition. Due to the general uncertainty
inherent in the year 2000 problem, we are unable to determine with certainty at
this time whether the consequences of year 2000 failure will have a material
impact on us. Our year 2000 plan is expected to significantly reduce our level
of uncertainty about the year 2000 problem. We believe that by executing our
year 2000 plan in a timely manner, the possibility of significant interruptions
to normal operations should be reduced. We believe that our most reasonably
likely worst case scenario is that certain suppliers will not be able to supply
the Company with key materials, thus disrupting the manufacture and sale of
products to our customers.
Our plans to complete the year 2000 project are based on our best
estimates, which were derived utilizing numerous assumptions of future events
including, but not limited to, the continued availability of certain resources
and other factors. Estimates of the status of completion and the expected
completion dates are based on tasks completed to date compared to all required
tasks. However, there can be no guarantee that expected completion dates will be
met, and actual results could differ materially for those forecasted. Specific
factors that might cause such material difference include, but are not limited
to, the availability and cost of personnel trained in certain areas, the ability
to locate and correct all relevant equipment, devices and computer codes, and
similar uncertainties.
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board (FASB) approved SFAS
No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 130 establishes
accounting standards for reporting and displaying comprehensive income and its
components (revenues, expenses, gains and losses). Venture has adopted this
standard in the financial statements. SFAS No. 131 establishes accounting
standards for the way public enterprises report information about operating
segments in annual financial statements. This statement also establishes
standards for related disclosures about products and services, geographic areas,
and major customers. Venture has adopted this accounting standard; however,
there was no impact on its financial statement presentation and disclosures
because Venture operates in only one segment, automotive operations.
In February 1998, the FASB approved SFAS No. 132, "Employers' Disclosures
about Pensions and Other Post-retirement Benefits," which standardizes the
disclosure requirements for pension and other Post-retirement benefits. In
particular, the Standard requires additional information on changes in the
benefit obligation and fair values of plan assets. Venture has adopted this
Standard in the presentation of its financial statements (Note 10).
In June 1998, the FASB approved SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It
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requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The Standard is effective for the first quarter of our fiscal
year beginning January 1, 2000. Venture has not yet determined the impact of
adopting this Standard on its financial position or results of operations. In
July 1999 the FASB approved SFAS No. 137, which delayed the implementation date
for SFAS No. 133 for one year.
In March 1998, the Accounting Standards Executive committee published
accounting Statement of Position (SOP) 98-1, which provides guidance on
accounting for the costs of computer software developed or obtained for internal
use. The provisions of this SOP are applicable for our fiscal year beginning
January 1, 1999. Venture does not anticipate that adoption of this Standard will
have a material impact on its financial position or results of operations.
SOP 98-5, Reporting on the Costs of Start-Up Activities, was issued April
1998. SOP 98-5 establishes standards for the financial reporting of start-up
costs and organization costs and requires such costs to be expensed as incurred.
SOP 98-5 is effective for fiscal years beginning after December 15, 1998.
Venture has not yet determined the impact of adopting SOP 98-5 on its financial
condition or results of operations.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Venture is exposed to market risk related to changes in interest rates and
commodity prices and selectively uses financial instruments to manage some of
these risks. Venture does not use financial instruments for speculation or
trading purposes. A discussion of Venture's accounting policy for derivative
financial instruments is included in the Organization and Summary of Accounting
Policies and the Financial Instruments footnotes to Venture's financial
statements. See Note 1 and Note 13 to "Venture Holdings Trust -- Notes to
Consolidated Financial Statements."
Venture has 3 interest rate exchange agreements with a financial
institution to limit exposure to interest rate volatility. Venture has currency
exposure primarily with respect to the Australian dollar and has chosen not to
hedge that risk at the present time. Venture's exposure to commodity price
changes relates to operations that utilize certain commodities as raw materials.
Venture manages its exposure to changes in these prices primarily through its
procurement and sales practices. Venture had no financial instruments
outstanding as hedges of commodity price risk at each of December 31, 1998 and
March 31, 1999.
These financial exposures are monitored and managed as a part of a risk
management program, which recognizes the unpredictability of financial markets
and seeks to reduce the potentially adverse effect. Sensitivity analysis is one
technique used to evaluate the impact of such possible movements on the
valuation of these instruments. A hypothetical 10% change in the value of
foreign currency movements would not have a significant impact on Venture's
financial position, results of operations or future cash flows. In addition,
based upon a 1 percentage point decrease in interest rates at each of December
31, 1998 and March 31, 1999, Venture estimates that the fair market value of the
interest rate exchange agreement would have decreased by $1.1 million and $2.5
million, respectively. A hypothetical 1 percentage point increase in interest
rates related to floating rate debt at each of December 31, 1998 and March 31,
1999 would decrease future pretax earnings and cash flows by $0.2 million
annually.
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BUSINESS
GENERAL
We are a leading worldwide full-service supplier of high quality molded and
painted plastic parts for OEMs, and other Tier I suppliers. We rank among the
largest designers and manufacturers of interior and exterior plastic components
and systems to the North American and European automotive markets. Exterior
products include such items as front and rear bumper fascias and systems, body
side moldings, hatchback doors, fenders, grille opening panels and
reinforcements, farings, wheel lips, spoilers, and large body panels such as
hoods, sunroofs, doors and convertible hardtops. Interior products include
instrument panel systems, door panels, airbag covers, side wall trim,
garnishment molding systems and consoles. Our principal customers include every
major North American OEM, eleven of the twelve major European OEMs, several
major Japanese OEMs, and leading Tier I suppliers. On a pro forma basis for the
twelve months ended December 31, 1998, our net sales totaled $1,933.5 million
and our Adjusted EBITDA totaled $195.1 million, and on a pro forma basis for the
three months ended March 31, 1999, our net sales totaled $511.7 million and our
EBITDA totaled $49.8 million.
We are a full-service supplier and an industry leader in manufacturing
plastic components, modules and systems and in applying new design and
engineering technology to develop innovative products, create new applications
and reduce product development time. We, and our affiliated companies, have the
capability to provide our customers state-of-the-art design and advanced
engineering services 24 hours a day around the world. We operate 57 facilities
in 9 countries, including the United States, Canada, Germany, Spain, France,
Hungary, the Czech Republic, Mexico and the Netherlands and expect to start
operations in Brazil in the third quarter of 1999. Our comprehensive
manufacturing capabilities include custom injection molding, automated painting
and assembly, and material and product testing. We also have extensive tool
making capabilities. Our engineering focuses on anticipating actual production
issues and integrating part design with tool design to create an efficient
manufacturing process. We refer to this emphasis as "design for manufacture."
We primarily emphasize the design and manufacture of components and
integrated systems, and manufacture those components and systems as a
sole-source supplier. We currently supply components or systems on over 150
models, including 4 out of 5 of the top selling models in both the United States
and Europe. We supply components for many popular models, such as the Volvo V40
and S40; Audi A4 and TT; BMW 3 Series and 5 Series; DaimlerChrysler A-Class,
"LH" cars (Chrysler LHS, Concorde, 300M and Dodge Intrepid), Dakota and Durango
trucks and "JA" cars (Cirrus, Stratus and Breeze); Ford F-series truck,
Explorer, Expedition, Mustang, Navigator and Windstar; Chevrolet Corvette,
General Motors "M" vans (Astro and Safari), Yukon, Tahoe, Suburban, Grand Am,
Grand Prix and GMC and Chevrolet full size vans (Express and Savana); Porsche
986 and 996; Peugeot 206; Citroen Xsara; Renault Twingo; Seat Ibiza and Cordoba;
Skoda Felicia and Octavia; and Volkswagen Golf, Passat and Bora. We believe that
the depth of our product mix, the diversity of models for which we are a
supplier and our geographic coverage reduce our risks associated with historical
downturns in the automotive industry.
INDUSTRY TRENDS
The automotive industry has been and continues to be significantly
influenced by several trends which we believe will enhance our strategic
position and growth prospects.
- INCREASED OUTSOURCING BY OEMS. In an effort to reduce costs, speed
product design and simplify manufacturing, OEMs have increasingly
outsourced the manufacture of many components and integrated systems
which were previously manufactured internally. Independent suppliers
generally are able to design, manufacture and deliver components and
systems
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at a lower cost than the OEMs due to: (1) their lower direct labor,
fringe benefit and overhead costs; (2) the ability to spread R&D and
engineering costs over products provided to multiple OEMs; and (3) the
economies of scale inherent in product specialization. OEMs have
benefited because outsourcing has allowed them to reduce capital
expenditures, production costs and inventory levels and to focus on
overall vehicle design, product quality and consumer marketing. Although
outsourcing has not been as long standing a trend in Europe as it has in
North America, it has become increasingly prevalent. In certain of
Peguform's main product lines, for instance, internal production by
European OEMs has declined significantly.
Suppliers such as ourselves have benefited from this outsourcing trend as
the aggregate number and value of components and integrated systems which
we manufacture have increased dramatically. In addition, the outsourcing
trend has been coupled with an increasing complexity of components which
are manufactured by independent suppliers. These factors have favored low
cost, full-service suppliers such as ourselves who can develop integrated
systems that OEMs can easily install.
- CONSOLIDATION OF SUPPLIER BASE BY OEMS. Since the 1980s, OEMs have
substantially reduced the number of suppliers that may bid for awards and
have been outsourcing an increasing percentage of their production
requirements. As a result of these trends, the OEMs have increasingly
focused on the development of long-term, sole-source relationships with
suppliers who can provide complex components and integrated systems on a
just-in-time basis, while at the same time meeting strict quality
requirements. These requirements are accelerating the trend toward
consolidation of the OEMs' supplier base as those suppliers who lack the
capital or production expertise to meet the OEMs' needs either exit the
business or are consolidated with larger suppliers. Both OEMs and
suppliers benefit from the consolidation trend. Suppliers are able to
devote the resources necessary for proprietary product development with
the expectation that they will have the opportunity to profit on such
investment over the multi-year life of a contract. OEMs benefit from
shared manufacturing cost savings that suppliers realize as a result of
long, multi-year production runs at high capacity utilization levels.
- INCREASED EMPHASIS ON PROGRAM MANAGEMENT AND INTEGRATED SYSTEMS. In
conjunction with the aforementioned consolidation trend, OEMs are
transitioning from purchasing components to placing responsibility for
design, engineering and manufacturing of full component systems on Tier I
suppliers. These expanded requirements can best be addressed by
full-service suppliers such as ourselves with sufficient technological
and manufacturing resources to meet such demands. Strategic combinations
have been pursued by many suppliers in order to add capabilities to
manufacture complementary components and systems and achieve more
complete systems capabilities. We believe that this trend toward
multi-component system integrators will compel further consolidation,
leaving the industry with fewer and more broad-based Tier I suppliers.
- INCREASING UTILIZATION OF PLASTIC. Plastic provides OEMs with a number
of advantages over metal, including increased design flexibility and
aesthetic appeal, resistance to corrosion and improved fuel-efficiency
performance due to lighter weight materials. Substituting plastic for
metal can also reduce manufacturing costs by eliminating machining costs,
reducing painting costs, facilitating assembly, minimizing tooling costs
and consolidating the number of parts used in a vehicle. While plastics
historically have been used for many interior trim components, they are
now being used more extensively in exterior and structural/functional
components and integrated systems. According to industry data, the
average plastic content per passenger vehicle has increased from
approximately 222 pounds in 1987 to approximately 242 pounds in 1997, and
is projected to grow to approximately 266 pounds per vehicle by 2007.
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We believe our early involvement as a full-service supplier to OEMs of
plastic components and integrated systems, as well as our extensive
plastics manufacturing technologies, position us to benefit from the
expanded utilization of plastic.
- GLOBALIZATION OF THE OEM SUPPLIER BASE. OEMs are increasingly seeking to
identify preferred suppliers that can meet their needs on a global scale,
and not just regionally. To facilitate global expansion by such preferred
suppliers, in certain instances OEMs are committing to sole-source
relationships to enhance the economic viability of new production
facilities. Such relationships also facilitate the efforts of OEMs to
develop certain models for the world automotive market. Our recent
establishment of facilities in Mexico and Brazil will further augment our
already significant capabilities to design and manufacture plastic
components and systems worldwide.
THE ACQUISITION
Venture has, for many years, been a key supplier to North American OEMs.
Venture's extensive design and manufacturing expertise, coupled with strategic
acquisitions, has enabled it to diversify its customer base and technological
capabilities, such that Venture has become a leading participant in the supply
of molded and painted interior and exterior plastic components and systems to
North American OEMs. For the five year period ended December 31, 1998, Venture's
net sales grew from $205.6 million to $645.2 million, a CAGR of 25.7%, and
EBITDA grew from $40.1 million to $94.2 million, a CAGR of 18.6%. In 1996,
Venture expanded its customer relationships and technological capabilities
through the 1996 Acquisitions.
A key element of Venture's business strategy has been to increase its
global presence to meet its OEM customers' global needs. Venture considers the
Acquisition an attractive opportunity to further this strategy. Peguform has
been a leading international designer and manufacturer of complete interior
modules, door panels and dashboards; and of exterior modules and other
structural plastic body parts, including bumper fascias and hatchback doors.
Peguform operates manufacturing facilities in Germany, Spain, France and the
Czech Republic. In addition, Peguform had recently followed certain of its key
OEM customers into Mexico and Brazil. Our manufacturing network is enhanced by 9
module centers across Europe, serving as final assembly units located directly
at, or very close to, selected customers' car assembly plants. Peguform's proven
ability to gain development orders for new and successor models is enhanced by
its product engineering efforts, including such innovations as thermoplastic
bumpers, a proprietary slush molding process, a thermoplastic hatchback door and
painting technologies such as electro-static painting and the use of water-based
paint. For the twelve-months ended December 31, 1998, Peguform had net sales of
$1,260.6 million.
We now have an established and significant presence in Europe as a result
of the Acquisition, which complements our strengths in North America, giving us
the ability to service existing OEM customers much more broadly than either
Venture or Peguform could individually. Additionally, we believe that the
Acquisition enhances the businesses of both Venture and Peguform in additional
ways, representing mutually beneficial synergies that go beyond the expansion of
geographic reach, including the following:
- EXPANDED ENGINEERING CAPABILITIES. Venture's component research, design
and engineering expertise has focused on a manufacturing approach by
emphasizing prototype production and tooling with a view to shortening
design and production cycles and reducing design and production costs.
Peguform's engineering staff has focused on new product development and
validation to a degree not practiced previously by Venture. An example of
this capability is the development of technology for a thermoplastic
hatchback door that Peguform then validated and had designed into a
customer's vehicle production. Peguform will likewise benefit from
Venture's "design for manufacture" emphasis which is expected to enhance
Peguform's ability to anticipate production issues, thereby reducing
costs associated with new product launches
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and scrap rates. The combination of these disciplines is expected to
enhance our overall capabilities.
- COMPLEMENTARY TECHNOLOGY. Peguform brings design and manufacturing
process technology that enhances Venture's capabilities to provide
innovative solutions to its customers. For example, Peguform's slush
molding technology may provide opportunities for cost savings and quality
improvement over conventional molding technologies in certain specialized
applications. Moreover, Peguform's use of water-based paint technology
and robotized painting of components enhances Venture's already
sophisticated capabilities.
- STRENGTHENED AND EXPANDED CUSTOMER RELATIONSHIPS. The customer base of
each of Venture and Peguform are complementary, with little overlap,
presenting the combined company with significantly greater OEM
penetration. As a result, our opportunities to bid on new business is
enhanced, while dependence on any one customer or geographic segment is
reduced.
- OPERATIONAL EFFICIENCIES. The increased size of the combined operations
of Venture and Peguform is expected to reduce materials costs, as volumes
will be significantly increased. Moreover, the in-house tooling
manufacturing capability of Venture and its affiliates is expected to
reduce tooling expenses, due to their capacity to manufacture in-house a
portion of the tooling requirements which Peguform has traditionally
outsourced. These benefits, together with the advantages of increased
global presence, complementary engineering and technologies, and
expanding customer bases, discussed above, are expected to provide
opportunities to improve profitability of the combined company in a
manner that would not be possible if both companies had remained
independent.
COMPETITIVE STRENGTHS
We believe we have the following key competitive strengths, which enhance
our ability to compete successfully in our industry:
- LEADING MARKET POSITION. We are among the largest suppliers of interior
and exterior plastic components and systems to the North American and
European automotive markets. We currently supply components or systems on
over 150 models, including 4 out of 5 of the top selling models in both
the United States and Europe. We believe that OEMs increasingly favor
large, multi-national, integrated suppliers with whom they can establish
global strategic relationships. These strategic relationships require
suppliers to be able to offer their customers worldwide manufacturing,
and design and engineering resources.
- DIVERSIFIED GLOBAL CUSTOMER BASE. Our principal customers include every
major North American OEM, eleven of the twelve major European OEMs,
several major Japanese OEMs, and leading Tier I suppliers. As a result,
we are less dependent on revenues from any single geographic market than
competitors that are less diversified. We believe the geographic breadth
of our customer base and full-service capabilities position us to further
benefit from the current consolidation and globalization trends in the
automotive industry.
- WORLDWIDE FULL-SERVICE PROGRAM MANAGEMENT CAPABILITIES. As OEMs have
focused increasingly on shortening vehicle design and production cycles
and reducing design and production costs, suppliers who have the ability
to cost effectively take an idea or design from concept to mass
production ("art to part") are being involved at the initial stages of
the process. We are successful in meeting the increased demands by OEMs
for their suppliers to provide full-service program management because of
our expertise in design and engineering, tooling, and multiple
manufacturing processes. As a result, we have increasingly been selected
as a sole-source supplier for vehicle components and integrated systems.
We believe that the evolution of the OEM relationship into strategic
partnerships provides a significant advantage to us because of our
ability to meet a customer's art to part needs on a global basis.
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- MULTIPLE EXTERIOR AND INTERIOR PLASTIC TECHNOLOGIES. We believe that we
are one of only a small number of automotive suppliers that can provide
its customers with both full-service program management capability and a
wide array of alternative plastic molding and painting technologies on a
global basis. We possess the latest technologies associated with
thermoplastic injection molding, compression molding, RIM, slush molding,
sheet molding compounds, composite technologies, and water-based paints.
By possessing a wide range of plastic design and manufacturing
technologies, we are able to distinguish ourselves from our competition
by offering the process that will best meet the customers' needs, while
often lowering design and production costs and shortening the product
development cycle.
- JUST-IN-TIME/SEQUENTIAL SHIPPING CAPABILITIES. As OEMs have moved to
just-in-time inventory management, the timeliness and reliability of
shipments by their suppliers have become increasingly important. To
service our customers more effectively, we utilize just-in-time
manufacturing and sourcing systems, which enable us to meet our
customers' requirements for on-time deliveries while minimizing the
carrying levels of inventory. Our international production facilities and
module centers are strategically located close to our OEM customers'
facilities. We also offer our customers sequential shipping, in which
components are sent to the OEMs in the specific order in which vehicles
are to be assembled, based on as little as two hours lead time. We
believe we have established a reputation as a highly reliable and timely
supplier able to meet our customers' demanding delivery requirements.
- EXPERIENCED MANAGEMENT TEAM. We believe our management's long history of
mutually successful relationships with a wide variety of OEM and Tier I
customers will provide a competitive advantage as the industry trends of
consolidation, outsourcing and globalization continue. Our management
team is highly experienced and has significant expertise in the North
American, European and other automotive markets. We have gained
additional experience in global operations through affiliate companies of
Venture, including operations in Australia, Asia and Africa, all of which
share the Venture name. As evidenced by the 1996 Acquisitions, our
management team has a proven track record of successfully assimilating
and integrating large, strategic acquisitions.
BUSINESS STRATEGY
Our business strategy is to use our competitive strengths to further our
position as a leading automotive supplier. The principal components of this
strategy are as follows:
- INVEST IN LEADING-EDGE DESIGN, ENGINEERING AND MANUFACTURING
TECHNOLOGIES. As OEMs worldwide continue to increasingly outsource
manufacturing of components and integrated systems, they have placed
greater reliance on the design and engineering capabilities of their
supplier base. We have made a substantial commitment to new product
technology and design, including establishing an Advanced Engineering
Center and offering the capability to provide 24-hour-a-day global design
and engineering services to our customers. The Advanced Engineering
Center integrates the use of CAD/CAM and utilizes the latest optical
design technology to rapidly and cost effectively replicate and modify
existing designs, as well as to design new prototypes, using REAP. We
also believe it is highly important to be able to offer a broad range of
manufacturing processes and technologies to our customers for the
production of a wide array of plastic components and systems. Both the
1996 Acquisitions and the Acquisition fit this strategy by enhancing our
ability to provide customers with multiple exterior and interior
technologies, specifically by adding expertise in sheet molding
compounds, slush molding and composite technologies, as well as
sophisticated painting processes. We intend to continue to invest
significantly in our design, engineering and manufacturing capabilities
in order to meet our customers' needs for innovation, quality,
reliability, lower
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costs and reduced lead times. We believe our continued ability to design,
engineer, tool and manufacture highly engineered components, modules and
systems will provide additional opportunities to supply an increasing
number of products to existing customers and expand our customer base.
- CONTINUE TO DEVELOP AND MANUFACTURE HIGH QUALITY PRODUCTS. We believe we
maintain an excellent reputation with the OEMs for providing high quality
products and customer service at competitive prices. Our reputation is
exemplified by our receipt of several major quality awards from our OEM
customers in both North America and Europe. Quality levels are currently
being standardized across OEMs through the QS-9000 program which is
expected to lower the cost of maintaining separate quality programs. All
of our manufacturing, tooling and design facilities historically operated
by Venture, and nine manufacturing facilities previously operated by
Peguform are QS-9000 certified.
- EMPHASIZE CONTINUOUS IMPROVEMENT PROCESSES. Venture follows "lean
manufacturing" and "Kaizen," or continuous improvement, philosophies that
seek to identify and eliminate waste in our own operations and in those
of our customers and suppliers. These philosophies emphasize employee
involvement in all phases of our operations by (1) empowering employees
at all levels with responsibility for their work, which leads to a
quicker identification of production issues; (2) forming cross-functional
teams to investigate opportunities for process improvements; and (3)
rewarding employee participation and involvement through financial
incentives. We have successfully implemented these philosophies in the
1996 Acquisitions, and are implementing these philosophies throughout
Peguform.
- MAXIMIZE OPERATING EFFICIENCIES AND LOWER COST STRUCTURE AT ACQUIRED
COMPANIES. We believe there are a number of areas in which we can
achieve annual cost savings related to the Acquisition. We have
successfully effected significant cost savings in past acquisitions. With
respect to the 1996 Acquisitions, we have been able to employ our lean
manufacturing process, which enables us to grow our business with
existing management assets and less capital expenditure. These
operational efficiencies, combined with our tooling and design
capabilities, have helped us to achieve substantial cost savings. We
expect the principal components of cost savings related to the recent
Acquisition will be in the areas of material and tooling costs, as
further described below:
Materials Cost Savings. We believe there are many opportunities to
reduce materials costs in areas such as raw materials, paint and other
materials, due to the similarities in plastic components manufactured by
Venture and Peguform. In many cases, these materials are currently
purchased from the same suppliers. Additionally, we expect to gain
increased purchasing leverage due to the Acquisition, resulting in more
favorable materials costs throughout our entire operation. As a result of
our analysis of the same or comparable materials, and their respective
costs and volumes at Venture and Peguform, we believe we can achieve
approximately $15.0 million in materials cost savings in our first full
year of operations following the Acquisition.
Tooling Cost Savings. Peguform has historically outsourced all of its
tooling requirements. Venture has consistently invested in maintaining a
sophisticated, in-house tooling capability. We believe Venture's tooling
capabilities not only provide a competitive advantage, but also typically
result in lower tooling costs than would otherwise be the case if tooling
were outsourced to other tooling manufacturers. We and our affiliated
companies currently have capacity to manufacture in-house a significant
portion of the tooling requirements which Peguform has traditionally
outsourced.
Other Operating Efficiencies. In addition to material and tooling cost
savings, we believe there are other opportunities to improve Peguform's
cost structure. Some of these
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opportunities include elimination of redundant administrative expense
items, shared design, engineering and program management resources,
manufacturing efficiencies and production of certain components in-house
that are currently outsourced by Peguform.
- STRATEGIC EXPANSION. We are committed to continue our strategic,
geographic expansion in order to serve our customer base globally. In
addition, we expect to make selective acquisitions and investments, or
enter into strategic alliances, to broaden our service offerings and
further enhance our systems integration capability. We believe that the
consolidation of the automotive supplier base and geographic expansion of
our customers will present additional opportunities for growth.
PRINCIPAL PRODUCTS
We produce thermoplastic injection molded, compression molded, injection
compression molded, RIM and slush molded plastic parts primarily for OEMs and
other Tier I suppliers. We also emphasize complex products, such as instrument
and door panel assemblies, which require the integration of multiple components
into complete sub-assemblies.
Our primary exterior and interior products are detailed and illustrated
below:
The following sets forth information about our automotive products and
vehicle models on which they are used or for which we have been awarded
business.
<TABLE>
<CAPTION>
AWARDED
BUSINESS ON
FUTURE
COMPONENT OEM/CUSTOMER CURRENT PRODUCTION(A) PRODUCTION(B)
- --------- ------------ --------------------- -------------
<S> <C> <C> <C>
Interior Trim Audi A3, TT, A8 A3, A4
DaimlerChrysler A Class, Vito, B Van, Breeze, Cirrus, B Van, Breeze,
Concorde, Eagle, Grand Cherokee, LHS, 300M, Cherokee,
Intrepid, Neon, Stratus, Wrangler, Viper Cirrus, Neon,
Stratus, PT
DEPCO Bonneville
Finley Industries Beauville
Ford Continental, Escort, Mountaineer, Taurus
General Motors Achieva, Blazer, Cadillac S5S, Camaro, Bravada,
Cavalier, Century, Express/Savana Van, Blazer,
Lumina, Park Avenue, Regal, STS Skylark, Century, Jimmy,
Sunfire, Suburban, TransAm, Tahoe Regal, Envoy,
GMT 370, GMT
560
Lear Chrysler Ram 150/350 Pickup, Windstar
Nissan HM
Opel Corsa
Porsche Boxster, 911
Renault Espace
Seat Ibiza, Inca, Cordoba, Toledo
Skoda Felicia, Octavia
Volkswagen Polo, Passat, T4 Van Polo, VW 611
</TABLE>
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<PAGE> 77
<TABLE>
<CAPTION>
AWARDED
BUSINESS ON
FUTURE
COMPONENT OEM/CUSTOMER CURRENT PRODUCTION(A) PRODUCTION(B)
- --------- ------------ --------------------- -------------
<S> <C> <C> <C>
Instrument and
Door Panels/
Assemblies Audi A3, A4, A8, TT A2, A4, A8
DaimlerChrysler A Class, B Van, Vito, V Class
General Motors Corvette
Nissan Terrano, Serena
Opel Corsa, Tigra
Porsche Boxster, 911 911
Renault Twingo, Express
Seat Ibiza, Inca, Cordoba
Skoda Felicia
Volkswagen Passat, T4 Van VW 611, Passat
Airbag Covers Autoliv Accord, Alero Cobra, Caravan, Grand Am,
Grand Cherokee, Mazda 626, Mustang,
Mercedes, Navigator, S5S, Sable, Subaru,
Taurus, Town & Country, Volkswagen Voyager
Breed Suzuki Tracker, Wrangler Chrysler RS
DaimlerChrysler A Class
TRW Breeze, Cirrus, Mustang, Neon, Stratus,
PN96, Town Car, Ranger
Cladding/
Exterior Audi A6
BMW 3 Series, 5 Series, 7 Series 7 Series
DaimlerChrysler B Van, Dakota, Durango, Eclipse, Minivan, Dakota, M Class
Viper, Vito, V Class
Ford Econoline Van, Escort, Explorer, Navigator
Expedition, Explorer, F-Series Pickups,
Mustang, Navigator, Nissan, Quest, Ranger,
Villager, Windstar
Freightliner Truck
General Motors Achieva, Achieva GT, Astro Van, Blazer, Malibu
Bonneville, Cavalier, Century, Corvette,
Denali, DeVille, Eldorado, Escalade,
Express/Savana Van, Grand Am, Grand Am GT,
Grand Prix, Intrigue, Lumina, Monte Carlo,
Opel, Regal, Safari, Saturn, Silhouette,
Skylark, Sunfire, Transport, Yukon, Venture
Nissan Terrano, Serena HS
Opel Corsa
PSA Peugeot Xantia, Xsara, Saxo 806(V)
Renault Megane, Clio Megane
Seat Ibiza
Skoda Felicia
Volkswagen Polo, Beetle, Jetta Polo
</TABLE>
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<TABLE>
<CAPTION>
AWARDED
BUSINESS ON
FUTURE
COMPONENT OEM/CUSTOMER CURRENT PRODUCTION(A) PRODUCTION(B)
- --------- ------------ --------------------- -------------
<S> <C> <C> <C>
Volvo V/S40
Fascias Audi A4, TT A3, A4
BMW 3 Series, 5 Series 3 Series, 5
Series
DaimlerChrysler Vito V Class Vito
Ford Expedition, F-Series Pick-up, Explorer,
Ranger
General Motors Astro, DeVille, Denali, Escalade, Eldorado,
LeSabre, Seville, Safari, Transport, Tahoe,
Opel, STS, Venture, Yukon
Isuzu Honda, Rodeo Rodeo
Karmann Golf Cabrio
Mitsubishi Carisma, Spacestar
Opel Omega, Catera
PSA Peugeot 106, 206, 306, Xsara, Berlingo, Saxo, 806,
Jumpy
Porsche Boxster, 911 Boxster, 911
Renault Twingo, Clio, Megane, Master, Express,
Kangoo, Laguna
Skoda Felicia, Octavia Felicia,
Octavia
Seat Ibiza, Inca, Cordoba, Toledo
Volvo V/S 40 V/S 40
Volkswagen Passat, Golf, Polo, Jetta, Vento, Caddy, Lupo GTI,
Bora, Lupo, LT2 Utility Passat, Polo,
Golf
Functional
Components DaimlerChrysler A Class, Vito
Ford Contour, Escort, F-Series Pickup, Jaguar, Econoline Van,
Lincoln LS, Mustang, Mystique, Navigator, Thunderbird
Ka
General Motors Blazer, Delphi-AC Spark Plug, G Van,
Express/ Savana Van, Seville, Skylark
Nissan Terrano, Serena
Opel Astra, Corsa
PSA Peugeot Belingo 306, Xantia,
806(V)
Renault Megane 4x4
Volvo V/S 40
Miscellaneous
Non-
Automotive Club Car Golf Cart bodies
Whirlpool Consumer white goods
</TABLE>
- -------------------------
(a) Represents models for which we will produce and supply products in 1999 and,
in most cases, future years beyond 1999.
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(b) The amount of products produced under these awards is dependent on the
number of vehicles manufactured by the OEMs. Many of the models are versions
of vehicles not yet in production. See "Risk Factors -- Reliance on Major
Customers; the OEM Supplier Industry." There can be no assurance that any of
these vehicles will be produced or that we will generate certain revenues
under these awards even if the models are produced.
CUSTOMERS AND MARKETING
We rank among the largest suppliers of interior and exterior plastic
components and systems to the North American and European automotive markets.
Our principal customers include every major North American OEM, eleven of the
twelve major European OEMs, several major Japanese OEMs, and leading Tier I
suppliers, as detailed below:
<TABLE>
<CAPTION>
OEMS TIER I SUPPLIERS
---- ----------------
<S> <C> <C> <C>
AB Volvo Ford Motor Company PSA Peugeot Citroen Autoliv, S.A.
Adam Opel AG General Motors Renault SA TRW Inc.
Corporation
Audi AG Isuzu Motors Limited Seat, S.A.
Bayerische Motoren Mitsubishi Motors Skoda Automobilova
Werke AG (BMW) Corporation
DaimlerChrysler AG Nissan Motor Co., Ltd Volkswagen AG
PORSCHE AG
</TABLE>
We primarily emphasize the design and manufacture of components and
integrated systems, and manufacture those components and systems as a
sole-source supplier. We currently supply components or systems on over 150
models, including 4 out of 5 of the top selling models in both the United States
and Europe. We supply components for many popular models, such as the Volvo V40
and S40; Audi A4 and TT; BMW 3 Series and 5 Series; DaimlerChrysler A-Class,
"LH" cars (Chrysler LHS, Concorde, 300M and Dodge Intrepid), Dakota and Durango
trucks and "JA" cars (Cirrus, Stratus and Breeze); Ford F-series truck,
Explorer, Expedition, Mustang, Navigator and Windstar; Chevrolet Corvette,
General Motors "M" vans (Astro and Safari), Yukon, Tahoe, Suburban, Grand Am,
Grand Prix and redesigned GMC and Chevrolet full size vans (Express and Savana);
Porsche 986 and 996; Peugeot 206; Citroen Xsara; Renault Twingo; Seat Ibiza and
Cordoba; Skoda Felicia and Octavia; and Volkswagen Golf, Passat and Bora. We
believe that the depth of our product mix, the diversity of models for which we
are a supplier and our geographic coverage reduces our risks associated with
historical downturns in the automotive industry.
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The approximate percentage of net sales to our principal customers and
customer categories, on a pro forma basis for the year ended December 31, 1998,
broken down geographically, is shown below. Also shown below is the approximate
percentage of net sales to principal customers (1) by Venture for the year ended
December 31, 1998, and (2) by Peguform for the 12-month period ended December
31, 1998.
<TABLE>
<CAPTION>
COMPANY
PRO FORMA VENTURE PEGUFORM
CUSTOMER 1998(1) 1998 1998(1)
- -------- --------- ------- --------
<S> <C> <C> <C>
NORTH AMERICA:
General Motors Corporation............................... 12.6% 38.1% --%
Ford Motor Company....................................... 8.2 24.8 --
Tier I Suppliers to OEMs................................. 5.0 15.1 --
DaimlerChrysler AG....................................... 4.5 13.6 --
Other Automotive......................................... 1.0 2.9 --
Non-Automotive........................................... 1.2 3.5 --
EUROPE:
Volkswagen AG............................................ 12.2% --% 18.2%
Audi AG.................................................. 9.7 -- 14.6
DaimlerChrysler AG....................................... 6.0 -- 8.9
PSA Peugeot Citroen...................................... 5.8 -- 8.7
Skoda Automobilova....................................... 5.0 -- 7.5
Renault SA............................................... 3.7 -- 5.6
Bayerische Motoren Werke AG (BMW)........................ 3.3 -- 5.0
Seat, S.A................................................ 3.2 -- 4.8
Porsche AG............................................... 2.6 -- 3.9
Adam Opel AG............................................. 1.6 -- 2.3
Other Automotive......................................... 12.5 -- 18.8
Non-Automotive........................................... 1.2 -- 1.7
OTHER:
Isuzu Motors Limited..................................... 0.7% 2.0% --%
----- ----- -----
TOTAL.................................................... 100.0% 100.0% 100.0%
</TABLE>
- -------------------------
(1) Includes net sales to customers, including sales by Celulosa Fabril S.A., a
50% owned joint venture, the sales of which are not included as net sales in
Peguform's financial statements.
Venture's sales are made directly to the OEMs with marketing and customer
support assistance provided by an affiliated company, wholly owned by Mr.
Winget, and by other unaffiliated entities. See "Certain Transactions."
DESIGN AND ENGINEERING
Our engineering focuses on anticipating actual production issues and
integrating part design with tool design to create an efficient manufacturing
process. We refer to this emphasis as "design for manufacture." We strive to
maintain a technological advantage through investment in product development and
advanced engineering capabilities. As OEMs have increasingly focused on
shortening their design cycles and reducing their design and production costs,
we have been
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increasingly required to utilize advanced engineering resources early in the
planning process. As a result of the Acquisition and through our affiliated
companies, we now have the capability to be a full-service supplier to our
global OEM customers 24 hours a day.
Our engineering and technical staff works closely with our OEM customers to
help design and develop new products and line extensions, ensure high quality,
and coordinate development with the manufacture of new vehicles. In addition, we
maintain laboratories dedicated to product development, tryout, certification
and research which are certified for use by several or our OEM customers.
Given the increased demand for early involvement in the design and
engineering aspects of product development, we have made a substantial
commitment in technical centers. Through our Advanced Engineering Center and
pre-product engineering site in Botzingen, Germany, with additional regional
engineering centers in Pouance, France and Polinya, Spain, we continue to
enhance our comprehensive and customer-focused design and engineering
capabilities. Our design and engineering technologies include integrated
CAD/CAM; computer-aided optical scanning; REAP; and gas-aided injection molding
technology ("GAIN"). With the aid of our integrated computer design systems and
the introduction of optical scanning prototyping equipment, we have
significantly reduced the amount of time required to create a prototype part and
ultimately a production component. This process not only reduces development
time but also improves the accuracy of product and mold tolerances. Further, our
advanced systems allow hundreds of design solutions to be visualized and
ergonomically tested quickly and easily, facilitating product design and
manufacturing.
Our advanced development capabilities have resulted in several innovations
that we believe have provided significant benefits to our customers. Peguform,
for instance, has a long history of developing innovative new designs both to
improve the quality and to lower the cost of its designs. Major innovations
include the first thermoplastic bumper developed in the late 1970s; a
proprietary slush molding process; the first thermoplastic hatchback door; and
the development of painting technologies. We believe that our design and
advanced engineering expertise is an important differentiating factor in
maintaining our relationships with and obtaining new business from our OEM
customers.
PRODUCTION CONTROL, MANUFACTURING AND QUALITY
Due to the evolving purchasing and manufacturing policies of the OEMs,
production control has emerged as the critical factor for coordinating and
integrating the customers' requirements with our scheduling and manufacturing
processes.
Responding to these changes, we have developed and incorporated the
principles of "lean manufacturing" and "Kaizen" into our manufacturing
operations. These programs establish a work environment which encourages
employee involvement in identifying and eliminating waste. Our operations are
structured flexibly to respond to the demands of different product runs and
changing product delivery requirements while increasing production efficiency.
Additionally, we rely on the quality and training of our work force and, when
appropriate, automation, to reduce costs.
We attempt to minimize our investment in inventory by coordinating our
purchasing and production activities with anticipated customer demands. Based
upon their production forecasts, the OEMs generally provide us with weekly
releases, four to thirteen weeks prior to actual delivery. To service our
customers more effectively, we have implemented "pull systems" at each of our
North American manufacturing locations, to help meet our customers' requirements
for on-time deliveries while reducing the carrying levels of inventory. Pursuant
to the "pull system," production is based primarily upon demand rather than on
forecasted need. Our European production facilities and module centers are all
located close to major OEM plants to accommodate just-in-time supply. With a
highly developed software and logistics capability, we process orders at these
facilities with finished products and deliver to customers' premises within a
matter of hours.
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We believe we maintain an excellent reputation with the OEMs for providing
world class quality and customer service at competitive prices. Our reputation
as a high-quality, full-service supplier is exemplified by our receipt of
several major quality awards from our OEM customers in both North America and
Europe. Quality levels are currently being standardized across OEMs through the
QS-9000 program which is expected to lower the cost of maintaining separate
quality programs. All of our manufacturing, tooling and design facilities
historically operated by Venture, and nine manufacturing facilities previously
operated by Peguform are QS-9000 certified.
The production of many of our components requires sophisticated technology
and considerable manufacturing expertise. We utilize two-component paint
technology, including soft-touch paints for interior applications (principally
air bag covers and interior consoles), as well as base coat and clear coat
paints applied to exterior components including fascias, fenders, lift gates,
wheel lips, spoilers and side moldings. Our side wall hard trim components,
scuff plates and seat back trims are molded in color. We also utilize
water-based paint and composite technologies, and produce slush molded
instrument panels and thermoplastic hatchback doors. Vinyl and cloth wrapping
techniques are used to manufacture our instrument panels, side wall hard trim
components and door panels.
Our plastic components have sophisticated tooling requirements, the costs
of which are generally billed to the customer at pre-authorized levels, although
there is a trend in the United States toward customers requiring such tooling to
be purchased by us and amortized over the life of the program. Development of
the tooling typically begins approximately two to three years before production,
after being selected by the customer to develop a particular component or
assembly. At that time, we commence our tooling design and development work.
Venture accumulates in inventory the costs incurred for this work. The
production tooling is ordered generally one year prior to production.
Venture supplies substantially all of its tooling requirements from its own
tooling operations. Peguform currently purchases substantially all of its
tooling requirements from outside suppliers. We believe that we will be able to
utilize our own in-house tooling capabilities to supply a portion of the tooling
requirements traditionally outsourced by Peguform, resulting in reduced costs to
the Company.
RAW MATERIALS
Our manufacturing processes use a variety of raw materials, principally
engineered plastic resins such as nylon, polypropylene (including
thermoplastics), polycarbonate, acrylonitrile-butadiene-styrene, fiberglass
reinforced polyester, PET and thermoplastic polyurethane; a variety of
ingredients used in compounding materials used in the compression molding
process; paint related products; and steel for production molds. Our customers
usually specify materials and suppliers to be used for a specific program, but
we cannot assure you that the specified suppliers will always be able to supply
the specified materials or that alternative sources will be available. We obtain
most of our raw materials from one-year supply agreements in which we estimate
our annual needs. We generally issue releases against these agreements only when
we receive corresponding orders from our customers. Although we have not
historically experienced raw material shortages, we could face shortages in the
future.
COMPETITION
Our business is highly competitive, and competition generally occurs on the
basis of product groups. A large number of actual or potential competitors
exist, including the internal component operations of the OEMs as well as
independent suppliers, many of which are larger than us. The competitive
environment has been affected in recent years by supplier consolidations
resulting from OEM supplier optimization policies and the spin-off by OEMs of
formerly in-house plastics manufacturing facilities. We believe these
consolidations and divestitures could benefit our future product pricing, as
formerly marginal competitors are removed and spun-off in-house manufacturing
facilities are forced to compete independently.
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We compete primarily on the basis of quality, cost, timely delivery and
customer service and, increasingly, on the basis of design and engineering
capability, painting capability, new product innovation, product testing
capability and our ability to reduce the time from concept to mass production
("art to part"). Some of the OEMs have adopted supplier management policies,
which designate preferred future suppliers and, in some cases, encourage new
suppliers to supply selected product groups. We believe that as OEMs continue to
strive to reduce new model development cost and timing, innovation, and design
and engineering capabilities will become more important as a basis for
distinguishing competitors. We believe that we have an outstanding reputation
among OEMs in these two areas which is enhanced as a result of the Acquisition.
We believe that in both North America and Europe, our two largest markets,
we maintain a competitive advantage due to our position as a full-service OEM
supplier. Our major North American competitors include Magna International,
Cambridge Industries, Inc., Buckeye Plastics, a division of Worthington
Industries, Textron Automotive division of Textron Corporation, Lear
Corporation, The Budd Company plastic division, and the Prince division of
Johnson Controls, Inc., plus a large number of smaller competitors.
The European market is best described in terms of interior and exterior
products. Our market position is enhanced as a result of the considerable
synergies between interior and exterior modules and by our technological
leadership in injection molding. In interior products, we focus on dashboard and
door panel modules. In both of these fragmented product markets we rank behind
market leader Sommer-Allibert, in a group which includes Plastic Omnium,
Faurecia, JCI/Becker, Magna, Lear, Commer, Irausa, Simoldes, Petri, Maione and
Textron. In exterior products, we focus on bumper systems, and have a favorable
market position relative to Plastic Omnium, Dynamit Nobel, Magna,
Sommer-Allibert and Rehau. In addition, we have extensive experience in
hatchback door design and production, specifically among new niche car models.
EMPLOYEES
We believe that our future success will continue to be enhanced by
rewarding and empowering employees. At May 31, 1999, we employed approximately
11,614 persons. We have 624 hourly persons at the Seabrook, New Hampshire and
Lancaster, Ohio facilities who are covered by collective bargaining agreements
with the United Auto Workers. Employees at our Conneaut, Ohio facility have
recently voted to be represented by the Teamsters union. The contract with our
Seabrook employees was recently renegotiated and expires in June 2002, and the
Lancaster contract expires in June 2001. Negotiations regarding a new collective
bargaining agreement at the Conneaut facility has not yet begun. We have not
experienced any work stoppages in North America and consider our relations with
our North American employees to be good.
For reasons of flexibility, part of our European workforce is employed on
short-term contracts. In addition, leased personnel are utilized in Europe on a
short-term basis to cover peak requirements. The European workforce is covered
by collective bargaining agreements with the following workers unions:
<TABLE>
<S> <C>
Germany: IG Bergbau, Chemie und Erden and IG Holz und Kunststoff
France: CFTC, CGC, CGT, CGT-FO and Syndicat National Autonome des
Plastiques
Spain: Comisiones Obreras, Union General Trabajadores and Central
Intersindical Galega
Czech Republic: KOVO
</TABLE>
Although Peguform has experienced several minor work stoppages in France in
the past, we believe that our relationships with the European workers councils
and unions is good.
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<PAGE> 84
PATENTS
We have the right to use various patents which aid in maintaining our
competitive position. Patents licensed to Venture begin to expire in the next 15
years. The expiration of such patents is not expected to have a material adverse
effect on our operations. See "Certain Transactions."
PROPERTIES
Our executive offices are located in Fraser, Michigan. Our North American
molding operations are conducted at fourteen facilities in Michigan, Ohio,
Kentucky, Indiana and New Hampshire. As a result of the Acquisition, we operate
nineteen plants in Europe, Mexico and Brazil. In addition, we have nine module
centers located in five European countries in order to meet our OEM's
requirements for just-in-time deliveries. The utilization and capacity of our
facilities may fluctuate based upon the mix of components we produce and the
vehicle models for which we are producing the components. We believe that
substantially all of our property and equipment is in good condition and that we
have sufficient capacity to meet our current and projected manufacturing and
distribution needs through the 2001 model year.
The following table sets forth certain information concerning our principal
facilities:
<TABLE>
<CAPTION>
SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
- -------- ------- -------- ------------------
<S> <C> <C> <C>
MICHIGAN
Masonic Facility 178,000 Leased(1) Molding, Mold Fabrication and
Repair
Malyn Complex 23,000 Leased(1) Molding
22,000 Leased(1) Molding
18,000 Owned Warehouse
Technical Center 56,000 Owned Headquarters, Laboratory,
Tryout, Mold Fabrication
Commerce Facility 24,000 Leased(1) Mold Fabrication and Repair
Doreka Center 6,000 Leased Design and Engineering
Service Center 6,000 Leased Administration
Grand Blanc Facility 365,000 Owned Molding, Painting, Assembly
Grand Rapids Complex 440,000 Leased Molding, Painting, Assembly
125,000 Leased Assembly Warehouse
85,000 Leased Warehouse, Shipping
Harper Facility 180,000 Leased(1) Molding, Painting, Assembly
Groesbeck Facility 128,000 Owned Molding
Design Center 20,000 Leased Design and Engineering
Almont Facility 10,000 Leased(1) Mold Fabrication and Repair
Almont Facility II 10,000 Leased(1) Mold Fabrication and Repair
Troy Center 10,000 Leased Mold Fabrication
Hillsdale Facility 119,000 Owned Molding, Painting, Assembly
25,000 Leased Warehouse
Redford Facility 22,000 Leased(1) Mold Fabrication
Allen Park Center 26,000 Leased Sales, Design, Engineering
</TABLE>
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<PAGE> 85
<TABLE>
<CAPTION>
SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
- -------- ------- -------- ------------------
<S> <C> <C> <C>
KENTUCKY
Hopkinsville Complex 104,000 Owned Molding, Painting, Assembly
80,000 Leased Warehouse
NEW HAMPSHIRE
Seabrook Facility 390,000 Owned Molding, Painting, Assembly
WALLACEBURG, ONTARIO, CANADA
Venture Canada Facility 35,000 Owned Painting and Assembly
OHIO
Conneaut Facility 183,000 Leased Molding, Painting, Assembly
Lancaster Facility 156,000 Owned Molding, Painting, Assembly
INDIANA
Madison Facility 71,000 Owned Painting and Assembly (inactive)
Hartford City Facility 116,000 Owned Molding and Assembly
Portland Facility 120,000 Owned Molding and Painting (inactive)
GERMANY
Botzingen 167,000 Owned Molding, Painting and R&D Center
415,000 Leased Molding, Painting and R&D Center
Gottingen 274,000 Owned(2) Molding and Painting
Mosel 67,000 Leased Module Center
Munchen 52,000 Leased Module Center
Neckarsulm 25,000 Leased Module Center
Neustadt 506,000 Owned Molding and Painting
Oldenburg 312,000 Owned Molding and Painting
Rastatt 65,000 Leased Module Center
Regensburg 75,000 Leased Module Center
FRANCE
Burnhaupt 127,000 Leased Molding and Painting
Noeux-les Mines 312,000 Leased Molding and Painting
Pouance 248,000 Leased Molding and Painting
54,000 Owned Molding and Painting
Rueil 2,300 Leased Module Center
Vernon 194,000 Leased Molding and Painting
HUNGARY
Gyor 26,000 Leased Module Center
SPAIN
Palencia 244,000 Owned Molding and Painting
Polinya 269,000 Owned Molding and Painting
Sant Esteve Sesrovires 107,000 Leased Molding
Vigo 133,000 Owned Molding and Painting
Zaragoza 267,000 Owned(3) Molding
</TABLE>
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<PAGE> 86
<TABLE>
<CAPTION>
SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
- -------- ------- -------- ------------------
<S> <C> <C> <C>
THE CZECH REPUBLIC
Liban 118,000 Owned Molding
Liberec 543,000 Owned Molding and Painting
Mlada Boleslav 16,000 Leased Module Center
BRAZIL
Curtiba 215,000 Leased(4) Molding and Painting
MEXICO
Puebla 66,000 Leased(5) Molding
NETHERLANDS
Sittard 95,000 Leased Module Center
</TABLE>
- -------------------------
(1) Leased from an affiliate of the Company. See "Certain Transactions."
(2) A portion of this facility is used on the basis of hereditary building
rights which expire in 2012.
(3) Operated by a joint venture in which we hold a 50% interest.
(4) Production expected to begin in the third quarter of 1999.
(5) Operated by a joint venture in which we hold a 70% interest.
In addition to the above facilities, we rely upon certain affiliated
companies, which are owned or controlled by Mr. Winget, to provide facilities,
machinery and equipment, technology and services that are necessary for us to be
a full-service supplier. Deluxe Pattern Company ("Deluxe"), a company wholly
owned by Mr. Winget's living trust, makes available to us a 30,000 square foot
advanced design and model building facility under a usage agreement. In
addition, Venture Automotive Corp. ("VAC"), a company wholly owned by Mr.
Winget's living trust, operates a 208,000 square foot facility in Flint,
Michigan at which it performed services for Venture which included sequencing
and value-added assembly of parts. Some of the services previously performed by
VAC have now been contracted to MAST Services, LLC, in which N. Matthew Winget,
Mr. Winget's son, formerly owned a minority interest. In addition, we have
subcontracted certain work to Nova Corporation ("Nova"), a business in which Mr.
Winget has a significant equity interest. See "Certain Transactions."
ENVIRONMENTAL MATTERS
Our operations are subject to numerous federal, state and local laws and
regulations in the United States and other countries pertaining to the
generation, storage, treatment and discharge of materials into the environment.
We have taken steps related to such matters in order to reduce the risks of
potentially harmful aspects of our operations on the environment. However, from
time to time we have been subject to claims asserted against us by regulatory
agencies for environmental matters relating to the generation, treatment,
storage and disposal of hazardous substances and wastes, as well as compliance
with environmental laws. Some of these claims relate to properties or business
lines we acquired after a release had occurred. In each known instance, however,
we believe that the claims asserted against us, or obligations incurred by us,
will not result in a material adverse effect upon our financial position or
results of operations. Nonetheless, there can be no assurance that activities at
these facilities or facilities acquired in the future, or changes in
environmental laws and regulations, will not result in additional environmental
claims being asserted against us or additional investigations, remedial actions,
compliance expenditures, fines or penalties being required.
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<PAGE> 87
We are currently involved in legal proceedings with the Michigan Department
of Environmental Quality ("MDEQ") concerning the emissions from our Grand Blanc
paint facility. See "Business -- Legal Proceedings."
In 1998 and 1999, the MDEQ issued 3 letters of violation to our Grand
Rapids, Michigan facility, alleging violations of certain emission limitations
and coating solvent content requirements of the facility's state air use permit.
We are presently reviewing and discussing the alleged violations with the MDEQ,
and it is possible that some may be the result of computation and reporting
discrepancies. We are evaluating alternative coatings that may address any
unresolved violations. It is possible that the MDEQ may seek administrative
penalties in connection with the resolution of these matters. We do not believe
that the amount of those penalties, if any, will have a material adverse effect
on our operations, or that the resolution of these matters will require material
capital expenditures, although there can be no assurance that such will not be
the case.
The New Hampshire Department of Environmental Services ("NHDES") is
currently undertaking an evaluation of certain modifications made in the early
1990's to the paint lines at our Seabrook, New Hampshire facility to determine
whether those changes made that facility subject to new source review. The
outcome of that evaluation cannot reasonably be predicted or estimated at this
time. If the NHDES concludes that the facility is subject to new source review,
it would likely require the installation of emission control equipment and
potentially other capital and operational expenditures, and could possibly give
rise to enforcement proceedings against the facility. While we do not believe
that any of the foregoing would have a material adverse effect on our
operations, there can be no assurance that such will not be the case.
In connection with the Acquisition, Venture conducted an environmental due
diligence assessment of the 16 primary Peguform manufacturing facilities in
Europe, Mexico and South America. That assessment identified various potential
environmental compliance and contamination issues that may require expenditures
to satisfy and ensure compliance with applicable regulatory standards and
requirements (defined as "Known Conditions" under the definitive agreement with
Klockner Mercator Maschinenbau GmbH). Under the terms of the definitive
agreement with Klockner Mercator Maschinenbau GmbH, they are obligated to
indemnify us, on a sliding, diminishing scale over a 7 year period, for certain
costs we incur in connection with the Known Conditions in excess of DEM 7.5
million, and in excess of DEM 6.0 million with respect to environmental
conditions other than the Known Conditions. We do not believe that any
expenditures we may be required to make in connection with the Known Conditions
or other environmental issues arising out of the Acquisition will have a
material adverse effect on our operations, although there can be no assurance
that such will not be the case.
We have been notified of our status as a potentially responsible party
("PRP") at the ReSolve Superfund site in North Dartmouth, Massachusetts, the
Solvents Recovery Services site in Southington, Connecticut, the Old Southington
Landfill Superfund site in Southington, Connecticut, the Spectron, Inc. site in
Elkton, Maryland, and the Hazardous Waste Disposal Inc. site in Farmingdale, New
York. At all 5 sites, the Company and all other PRPs are jointly and severally
liable for all remediation costs under applicable hazardous waste laws.
Therefore, our proportionate share is subject to increase upon the insolvency of
other PRPs.
With respect to the ReSolve site, we have been named, along with Bailey's
immediate predecessor, USM Corporation's Bailey division (in the name of Emhart
Corporation), as a PRP for wastes sent to the site during the 1970s. Recent
estimates provided by the PRP group responsible for the site's remediation
indicate that our potential liability for clean-up efforts at the site is
approximately $0.4 million for which we are fully reserved and have posted a
letter of credit in favor of the PRP group. The discovery of the presence of
contaminants in a form not currently susceptible of short-term remediation,
however, has created uncertainty about the future scope and cost of clean-up
efforts at this site, and a possibility that the ultimate cost of remediation
may be higher than
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previously estimated. We are unable to predict what, if any, effect this recent
discovery may have on us.
On June 18, 1992, we received notice from the EPA that we were a PRP under
the federal Superfund law with respect to the Solvents Recovery Services of New
England Site in Southington, Connecticut (the "SRSNE Site"). Based upon a
volumetric ranking dated July 7, 1993, the waste allocated to us represented
0.11593% of the total identified waste at the SRSNE Site. Under the terms of a
settlement with Emhart, we agreed to assume liability for wastes sent to the
SRSNE Site by the Seabrook, New Hampshire facility and Emhart agreed to assume
liability for wastes sent by USM's Amesbury, Massachusetts facility. The
identified PRPs have organized a group to negotiate with the EPA, and we have
joined that group. The group has successfully negotiated with the EPA to reduce
the total estimated cost of the initial removal action at the SRSNE Site from an
original estimate of $14 million down to a current estimate of approximately
$4.0 million. The total estimated cost of long-term remediation at the SRSNE
Site is not yet known.
In January 1994, we received a Notice of Potential Liability for the Old
Southington Landfill Superfund Site (the "OSL Site") located in Southington,
Connecticut. We received notice, along with USM/Emhart, of liability for the
share of OSL Site costs allocated to USM Corporation (Amesbury, Massachusetts).
We entered into a settlement agreement with Emhart under which Emhart will
assume sole responsibility for all cleanup costs, imposed by the EPA, arising
out of the alleged liabilities of USM Corporation's Bailey division (Amesbury,
Massachusetts) for the OSL Site.
In June 1989, the EPA notified us that we were a PRP under the federal
Superfund law for the Spectron, Inc. site located in Elkton, Maryland. A group
of PRPs entered into agreements with the EPA to fund and conduct a $2.8 million
emergency response action to remove stored wastes at the site and pay the
government's past costs associated with the site, approximately $635,000. There
are several thousand PRPs at this site, with most being small generators with
low dollar exposure. In December 1989, nearly 800 entities, including the
Company, that sent small quantities of waste to the site participated on a
cash-out basis in the settlement for past costs and the removal action, and our
allocated share was approximately $8,100. Participation in the cash-out
settlement gives us protection against contribution claims from third parties
for the first phase of the site cleanup ("Phase 1").
In August 1990, a separate PRP group ("Phase II PRP Group") was formed and
negotiated an agreement with the EPA to remediate contaminated seeps on the site
and perform a limited privately-funded remedial investigation/feasibility study
for the site (the so-called Phase II activities). We were not asked to join the
Phase II PRP Group because that group determined that the companies that paid
for Phase I of the cleanup would not be asked to make any financial
contributions toward Phase II until the other customers have paid out an amount
per gallon equal to that paid by the Phase I parties. An additional
investigation was conducted as part of the Phase II activities to determine the
nature and extent of a new form of contamination discovered on the site;
additional design work will be commenced soon.
In October 1995, we received a notice from the EPA that we were PRP that
has liability for conducting a Remedial Investigation/Feasibility Study
("RI/FS") at the Spectron site. In connection with this, we may have an
opportunity to enter into a de minimis party cash out settlement with the EPA
and the other PRPs, the terms of which currently are being negotiated. No
estimate can be made at this time as to the amount of the Company's liability at
the Spectron site.
In 1995, the New York Department of Environmental Conservation notified us,
as well as a number of other parties, that we were named a responsible party
under the Environmental Conservation Law of the State of New York with respect
to the Hazardous Waste Disposal, Inc. site located in Farmingdale, New York.
Based on available information, our involvement at the site appears to be
related to the shipment of 2 drums of waste materials to the site, and
consequently
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minimal. Additional investigations have been undertaken to determine: (1)
whether there are any other entities that shipped wastes to the site; and (2)
whether any of the named parties actually shipped more than was originally
attributed to them. The results to date do not suggest that our ranking at the
site will change significantly. We have demanded that Emhart Corporation assume
the defense of this claim. Emhart Corporation has taken our demand for a defense
and indemnification under advisement. In doing so, Emhart Corporation has taken
the position that it did not receive "prompt written notice" of the claim.
We also face the possibility of liability if we are deemed a successor to
TransPlastics with respect to wastes generated and disposed of by TransPlastics
when it owned the Conneaut property. TransPlastics has been identified as a PRP
at the Millcreek site in Millcreek Township, Pennsylvania, and at the New Lyme
Site located in Dodgeville, Ashtabula County, Ohio, and at the Huth Oil Site in
Cleveland, Ohio, 3 sites currently undergoing remediation. We also received
notices from third parties regarding potential claims in connection with the
Huth Oil Site and the Millcreek site. We did not agree to assume any
environmental liabilities of TransPlastics and, as a result, submitted claims
for indemnification for these matters to TransPlastics, which liabilities
TransPlastics has accepted. Under the terms of the Conneaut Acquisition
agreement, TransPlastics and its parent companies must indemnify us for any
liability arising out of any such claim. Nevertheless, there can be no assurance
that TransPlastics and its parent companies will have sufficient assets to
satisfy our potential liability for the remediation and any associated damage or
cost caused by the contamination.
We also face potential liability at our Hillsdale, Michigan facility in
connection with an acquisition made by Bailey prior to our acquisition of Bailey
(the "Boler Acquisition"). An environmental site assessment completed by The
Boler Company ("Boler") determined that the ground water at the Hillsdale
facility was contaminated with chlorinated solvents as a result of Boler's past
site activities. The ground water contamination plume has migrated onto adjacent
properties. In addition, the company from which Boler acquired the Hillsdale
site is listed as a PRP for a number of off-site disposal locations. The Boler
Acquisition Purchase and Sale Agreement requires Boler to indemnify us for any
environmental liabilities which arise in connection with use of the property
prior to closing. In addition, Boler has executed a remediation agreement in
which it agreed to remediate, at its own expense, the identified ground water
contamination at the Hillsdale facility. Boler is currently conducting the
remediation at that facility. If Boler has insufficient resources to complete
remediation of any contamination for which it has indemnified us or otherwise
becomes insolvent, we could incur successor liability for the costs of
remediation and any damages to third parties.
We also have potential liability in connection with contamination at
certain property in Cuba, Missouri, which had been leased by Bailey prior to our
acquisition of Bailey. The landlord has undertaken to remediate this property at
its own expense. We have negotiated the termination of all of our obligations
with respect to the lease.
As a result of the environmental investigation conducted as part of its due
diligence during the acquisition of the three Premix/E.M.S. Inc. facilities
prior to our acquisition of Bailey, Bailey identified a number of environmental
concerns. Premix/E.M.S. Inc., as part of the acquisition agreement, agreed to
pursue and address these concerns, most of which it has completed. Pursuant to
the acquisition agreement, we performed certain post-acquisition investigations
which appeared to confirm the presence of subsurface contamination, of which we
have informed Premix/E.M.S. Inc. Under the acquisition agreement, Premix/E.M.S.
Inc. is obligated to undertake necessary remediation of this problem, if in fact
any is required. Premix/E.M.S. Inc. is currently conducting the remediation at
the Portland, Indiana facility. Premix/E.M.S. Inc. has entered into an
Environmental Indemnification Agreement for our benefit. There is a pending
dispute with Premix/E.M.S., Inc. as to whether there is a $3.0 million or $6.0
million limit on indemnification under this agreement. The shareholders of
Premix/E.M.S. Inc. have also severally undertaken to reimburse us in certain
limited
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circumstances, to the extent of distributions received by them from
Premix/E.M.S. Inc., and to the extent that Premix/E.M.S. Inc. does not directly
satisfy its indemnification obligations.
Estimates of the future cost of such environmental matters are necessarily
imprecise due to numerous uncertainties, including the enactment of new laws and
regulations, the development and application of new technologies, the
identification of new sites for which we may have remediation responsibility and
the apportionment and collectibility of remediation costs among responsible
parties. We establish reserves for these environmental matters when the loss is
probable and reasonably estimable. At December 31, 1998 and 1997, Venture had a
reserve of approximately $1.3 million and $1.3 million, respectively, to address
the issues discussed above and for compliance monitoring activities that may be
incurred. We periodically evaluate and revise estimates for environmental
reserves based upon expenditures against established reserves and the
availability of additional information. It is possible that final resolution of
some of these matters may require us to make expenditures in excess of
established reserves, over an extended period of time and in a range of amounts
that cannot be reasonably estimated. Although the ultimate cost of resolving
these matters could not be precisely determined at December 31, 1998, we
believe, based on currently known facts and circumstances, that the disposition
of these matters will not have a material adverse effect on our consolidated
financial position and results of operations.
LEGAL PROCEEDINGS
On February 23, 1998, the Attorney General of the State of Michigan and the
MDEQ instituted legal proceedings in state court alleging that we had violated
current permits regarding the level of emissions and odors discharged from our
Grand Blanc paint facility. These proceedings seek and may result in the
imposition of civil penalties of up to $10,000 per day; the total amount is not
reasonably estimable given the current status of the proceedings. Emission
levels are being evaluated as part of the proceedings, and it is possible that
we may be required to make capital expenditures of $2.0 million to $5.0 million
to the current systems to come into compliance. During the first quarter of
1999, the U.S. Environmental Protection Agency issued a notice of violation and
has taken an active role in monitoring these legal proceedings and may take
action separate and distinct from the legal proceedings begun by the State of
Michigan and the MDEQ.
In addition to the environmental matters described above and under
"Business -- Environmental Matters," we are a party to several legal proceedings
incidental to the conduct of our business. We do not believe that any of these
actions, individually or in the aggregate, will have a material adverse effect
on our financial condition or results of operations.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act, and
in accordance therewith file periodic reports and other information with the
SEC. Reports and other information filed by us with the SEC can be inspected and
copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Information on the operation of the Public Reference Room is
available from the SEC at 1-800-SEC-0330. In addition, the SEC maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of such Web site is: http://www.sec.gov.
In the event we cease to be subject to the informational requirements of
the Exchange Act, we will be required under the indentures governing the Notes
to continue to file with the SEC the annual and quarterly reports, information,
documents or other reports, including, without limitation, reports on Forms
10-K, 10-Q and 8-K, which would be required pursuant to the informational
requirements of the Exchange Act. We will also furnish such other reports as may
be required by law. In addition, for so long as any of the Outstanding Notes are
restricted securities within the meaning of Rule 144(a)(3) under the Securities
Act, we have agreed to make available to any
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prospective purchaser of the Outstanding Notes or beneficial owner of the
Outstanding Notes, in connection with any sale thereof, the information required
by Rule 144A(d)(4) under the Securities Act.
We are not required to send annual reports to security holders under the
SEC's proxy rules or regulations. We will provide the Trustee with reports,
including reports on Forms 10-K (including audited financial statements), 10-Q
and 8-K, pursuant to the terms of the indentures governing the Notes.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following individuals are our Directors and Executive Officers, having
the operational titles set forth opposite their names. The Issuer does not have
directors. Mr. Winget, as Special Advisor to the Issuer, generally acts in that
capacity. Messrs. Winget, Schutz and Torakis serve as the directors of each
guarantor of the Notes. Mr. Winget and Stephen M. Cheifetz serve as the
directors of Venture Canada. Mr. Butler is a director of Venture Holdings
Corporation only.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Larry J. Winget...................... 56 Chairman of the Board and Chief Executive Officer
Larry J. Winget, Jr.................. 38 Chairman of Peguform GmbH and Executive Vice
President -- Manufacturing of Venture Holdings
Company LLC
A. James Schutz...................... 53 Vice Chairman
Michael G. Torakis................... 42 President of Venture Holdings Company LLC and
Peguform GmbH
Robert Wedge......................... 61 President of Mold & Engineering Operations
James E. Butler, Jr.................. 46 Chief Financial Officer, Executive Vice President
and Secretary
Charles Hunter....................... 46 Executive Vice President -- Engineering
Michael Juras........................ 57 Executive Vice President -- Advanced Engineering
and Marketing
Patricia A. Stephens................. 52 Executive Vice President -- Purchasing
Joseph R. Tignanelli................. 37 Executive Vice President -- Interior Operations
David Voita.......................... 58 Executive Vice President -- Manufacturing
Warren Brown......................... 55 Vice President -- Exterior Operations
Gary Woodall......................... 56 Vice President -- Interior Operations and General
Motors Customer Executive
Werner Deggim........................ 48 Senior Vice President -- Peguform GmbH
Gerhard Ruf.......................... 44 Vice President -- Operations, Logistics and Process
Engineering -- Peguform GmbH
Dieter Belle......................... 43 Vice President -- Finance, Controlling, Purchasing
and Human Resources -- Peguform GmbH
</TABLE>
Larry J. Winget was one of the five original founders and shareholders of
Venture Industries Corporation and is the only one still involved with us. Since
1987 he has owned 100% of the Company and is currently the sole beneficiary of
the Trust, which is the sole member of the Issuer.
Larry J. Winget, Jr., Larry J. Winget's son, has been employed by us in
various positions since 1976, including Molding Plant Manager of Vemco, Inc.
from 1988 until 1990, Assistant Manager of Vemco, Inc. from 1990 until 1993, and
Vice President and General Manager of Vemco, Inc. until being named to the
position of Vice President -- Manufacturing in April of 1995. In December of
1997 he assumed the additional role of leading all manufacturing operations and
on May 28, 1999 became Chairman of Peguform.
A. James Schutz assumed the position of Vice Chairman in October 1997 and
had been Executive Vice President since 1987. He has been in the injection
molding business for 25 years.
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Michael G. Torakis joined us in 1985 and has been President since 1995. He
previously served as Treasurer and Chief Financial Officer and in various other
capacities with the Company, including Executive Vice President. On May 28,
1999, Mr. Torakis became President of Peguform.
Robert Wedge joined us in November 1984 as Plant Manager, became Vice
President and General Manager of Venture Mold & Engineering in December 1993 and
assumed his present position in April of 1995. Mr. Wedge has 35 years of mold
building experience.
James E. Butler became Chief Financial Officer of the Company in 1999. He
joined us in 1994 and assumed the position of Executive Vice
President -- Finance and Secretary in April of 1995. From 1981 until joining the
Company, Mr. Butler was employed by Coopers & Lybrand L.L.P., a certified public
accounting firm.
Charles Hunter has been with us since 1989 and has held a number of
different positions with us involving mold building, design engineering and
prototype operations. He currently oversees worldwide design and advanced
engineering operations.
Michael Juras joined us in his current position in January 1997. Prior to
joining us, Mr. Juras had spent 30 years in various product and manufacturing
positions with General Motors, with his last position as Director of Engineering
Mid-Size Cars.
Patricia A. Stephens joined us in 1993 and has held positions involving
program management, contract administration and purchasing. She previously had
been employed for 23 years by General Motors, her last position being purchasing
agent.
Joseph R. Tignanelli, Larry J. Winget's son-in-law, has been employed by us
in several positions since 1980, including Molding Manager for Venture
Industries Corporation -- Groesbeck plant from 1985 until 1990, Assistant
Manager of Venture Industries Corporation from 1990 until 1993, Vice President
of Venture Industries until October of 1995, and Executive Vice
President -- Customer Services until December 1997, when he assumed his current
position.
David Voita has been employed by us in various manufacturing positions
since 1995, after a 33-year career with Ford Motor Company. Mr. Voita's last
position at Ford was that of Plant Manager for the Plastic and Trim Division,
where he managed a 1.2 million square foot, 1,300 employee facility.
Warren Brown joined us in 1993 as Vice President -- Mergers and
Acquisitions and assumed his current position in 1999. Prior to joining us, Mr.
Brown was employed for eight years as Chief Operating Officer of Autodie
Corporation. He has over 30 years experience in the automotive supplier
industry.
Gary Woodall joined us on April 1, 1999 as Vice President of Interior
Operations and General Motors Customer Executive. Mr. Woodall had previously
been employed by General Motors Corporation for over 35 years. Mr. Woodall's
last position with General Motors was as General Director of Products,
Manufacturing and Process Engineering. Prior to holding that position, Mr.
Woodall served as General Director of Operations, and was responsible for
General Motors' North American interior automotive component manufacturing.
Werner Deggim became a member of the Management Board of Peguform GmbH in
1994, in charge of Sales, Development and Research, until being named to his
present position in 1998. For 5 years prior to joining Peguform Mr. Deggim was
President of Kautex North America, located in Windsor, Ontario Canada.
Gerhard Ruf served as plant manager of Peguform GmbH's plant in Neustadt,
Germany from 1994 to 1997. In 1997, Mr. Ruf assumed the position of Vice
President for Operations of Peguform GmbH. Mr. Ruf has been in his present
position since January 1998. Prior to joining Peguform,
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Mr. Ruf was employed for 8 years by Sommer Allibert as production and plant
manager at their Sontra, Germany facility.
Dieter Belle joined Peguform GmbH as Vice President-Finance, Controlling
and Purchasing in 1995. In April 1998 he assumed responsibility for human
resources. Prior to joining Peguform, Mr. Belle served as Director of
Controlling for Felten & Guilleaume from 1990 to 1995.
Stephen M. Cheifetz, 43, is a partner of Corrent and Macri and has served
as partner of this firm for less than 1 year. Prior to joining his current firm,
he was a partner with Wilson, Walker, Hochberg, Slopen, a Windsor, Ontario law
firm, and served as a partner of that firm for over five years.
EXECUTIVE COMPENSATION
The following Summary Compensation Tables sets forth compensation paid for
the years ended December 31, 1998, 1997 and 1996, respectively, to those persons
who were, at such date, the chief executive officer of the Company and four
other executive officers who received more than $100,000 in compensation during
such year (collectively, the "Named Officers") for services in all capacities to
us.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY($)(2) BONUS($) COMPENSATION(3) COMPENSATION(4)
- ------------------ ---- ------------ -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Larry J. Winget........................ 1998 $526,503 -- $542,872 $366,063
Chairman of the Board and 1997 527,657 -- 478,945 277,347
Chief Executive Officer 1996 513,820 -- 675,799 250,807
A. James Schutz........................ 1998 $238,856 $41,760 -- $ 5,100
Vice Chairman 1997 237,150 41,760 -- 4,800
1996 231,491 41,760 -- 4,800
Michael G. Torakis..................... 1998 $268,834 -- -- $ 5,100
President 1997 263,819 -- -- 4,800
1996 257,615 250,000 -- 4,800
Larry J. Winget, Jr.................... 1998 $219,224 -- -- $ 5,100
Executive Vice President 1997 220,938 -- -- 4,275
1996 216,034 -- -- 3,950
Joseph R. Tignanelli................... 1998 $198,039 -- -- $ 4,850
Executive Vice President 1997 192,428 -- -- 4,800
1996 189,084 -- -- 4,800
</TABLE>
- -------------------------
(1) The compensation described in this table does not include benefits under
group plans which do not discriminate in scope, terms or operation in favor
of the Named Officers and that are generally available to all salaried
employees, and certain perquisites and personal benefits received by the
Named Officers, where such perquisites do not exceed the lesser of $50,000
or 10% of such officer's salary and bonus.
(2) Includes salary reductions made under Venture's 401(k) Plan and Venture's
Cafeteria Benefit Plan.
(3) The amount indicated for Mr. Winget represents compensation in lieu of a
distribution of Trust principal equal to taxes incurred by the beneficiary
as a result of activities of the Trust's subsidiaries which have elected "S"
corporation status under the Code or are LLCs (taxed as partnerships). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
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(4) "All Other Compensation" is comprised of: (1) a contribution made by Venture
to the accounts of each of the Named Officers under Venture's 401(k) Plan;
(2) the incremental cost to Venture of additional premiums for term life
insurance benefits for the Named Officers which are not generally available
to the other salaried employees of Venture, and (3) with respect to Mr.
Winget, the portion of the premium paid by Venture under a life insurance
policy (the "Reverse Split Dollar Policy") attributable to the build-up of
the cash surrender value of the policy, which aggregated $1,672,705,
$1,311,742 and $1,039,195 at December 31, 1998, 1997 and 1996, respectively,
and is owned by Mr. Winget. The beneficiary of the term insurance portion of
the Reverse Split Dollar Policy is Venture, which pays all premiums due
under the policy and is entitled to receive a $20.0 million benefit in the
event of Mr. Winget's death. Mr. Winget has the right to designate the
distribution of the cash surrender value and may, prior to his death,
surrender the policy in cancellation thereof and receive the benefit of the
cash surrender value.
See the table below for complete details concerning all other compensation.
<TABLE>
<CAPTION>
REVERSE
TERM LIFE SPLIT DOLLAR
NAME AND YEAR 401(K) INSURANCE POLICY TOTAL
- ------------- ------ --------- ------------ --------
<S> <C> <C> <C> <C>
Winget
1998 $4,800 $300 $360,963 $366,063
1997 4,500 300 272,547 277,347
1996 4,500 300 246,007 250,807
Schutz
1998 $4,800 $300 -- $ 5,100
1997 4,500 300 -- 4,800
1996 4,500 300 -- 4,800
Torakis
1998 $4,800 $300 -- $ 5,100
1997 4,500 300 -- 4,800
1996 4,500 300 -- 4,800
Winget, Jr.
1998 $4,800 $300 -- $ 5,100
1997 3,975 300 -- 4,275
1996 3,650 300 -- 3,950
Tignanelli
1998 $4,550 $300 -- $ 4,850
1997 4,500 300 -- 4,800
1996 4,500 300 -- 4,800
</TABLE>
COMPENSATION OF DIRECTORS
Mr. Winget serves as the Special Advisor to the Issuer, Messrs. Winget,
Schutz and Torakis serve as the directors of each guarantor of the Notes, and
Mr. Butler serves as director of Venture Holdings Corporation. None receive any
additional compensation or fees for their service to us in such capacities. Mr.
Cheifetz does not receive compensation for acting as a director of Venture
Canada; however, the law firm of which he is a partner acts as counsel to
Venture Canada.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All of the Named Officers' compensation for the year ended December 31,
1998 was paid by Experience Management LLC. Messrs. Winget and Torakis, in their
capacities as directors,
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participated in the deliberations concerning executive compensation. In
addition, some of the Named Officers have engaged in certain transactions with
Venture. See "Certain Transactions."
OPTIONS
None of the Named Officers hold any options to acquire any interest in the
Issuer or to acquire stock of the subsidiaries of the Issuer or were granted any
such options in the 1998 fiscal year.
STOCK OWNERSHIP
The Issuer owns, directly or indirectly, all of the outstanding capital
stock of, or equity interests in, its subsidiaries, except for its Mexican (70%
owned) and Spanish (50% owned) joint ventures. The Trust is the sole member of
the Issuer, and Mr. Winget is the sole beneficiary of the Trust. Mr. Winget's
address is c/o Venture Holdings Company LLC, 33662 James J. Pompo Drive, Fraser,
Michigan 48026.
CERTAIN TRANSACTIONS
In addition to making distributions to Mr. Winget, either directly as sole
beneficiary of the Trust before the Trust Contribution, or indirectly through
distributions to the Trust as the sole member of the Issuer after the Trust
Contribution, and also compensating him in his capacity as an Executive Manager
of the Company, Venture has maintained business relationships and engaged in
certain transactions with Mr. Winget and certain companies owned or controlled
by him (each an "affiliate" and collectively, the "affiliates") as described
below. Since we operate for the benefit of Mr. Winget, the terms of these
transactions are not the result of arms'-length bargaining; however, we believe
that such transactions are on terms no less favorable to us than would be
obtained if such transactions or arrangements were arms'-length transactions
with non-affiliated persons.
Pursuant to the indentures governing the Notes and the indenture governing
the 1997 Senior Notes, the Issuer, each issuer of the 1997 Senior Notes and each
guarantor of each of the 1997 Senior Notes and the Exchange Notes is required to
maintain a Fairness Committee, at least one of whose members is independent,
which approves the terms and conditions of certain transactions between the
Company and our affiliates and participates in decisions concerning whether
certain corporate opportunities will be pursued by us. Venture has complied with
such requirement since the date of the issuance of the 1994 Notes for
transactions initiated after such date. The indentures also contain restrictions
on distributions to Mr. Winget and other restrictions on transactions with
affiliates, including the Corporate Opportunity Agreement. The Corporate
Opportunity Agreements, entered into in connection with the issuance of the 1994
Notes and the Outstanding Notes, require Mr. Winget to offer to us certain
corporate opportunities which relate to our business before he may pursue such
opportunities outside the Company. See "Description of Exchange Notes."
FACILITIES AND EQUIPMENT
We lease, or have arranged for the usage of, certain facilities, machinery
and equipment that are owned by affiliates, as set forth below. We believe that
the lease and usage agreements are based on the fair market value of the
facilities, machinery and equipment at the inception of the agreements. Venture
has made significant capital improvements to these properties. Venture has
accounted for such improvements as leasehold improvements. At the conclusion of
the applicable lease or usage agreement, the benefits of such improvements inure
to the benefit of the lessor.
Venture Real Estate, Inc., a corporation wholly owned by Mr. Winget's
living trust since 1988, leases two separate injection molding buildings to us
in our Malyn Complex, and our Commerce Mold Shop. Starting in 1996, the Redford
facility, and in 1998 the Almont II facility, were also
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leased to us by Venture Real Estate, Inc. Amounts paid to Venture Real Estate,
Inc. and a predecessor affiliate were approximately $0.8 million, $1.0 million
and $0.8 million for the years ended December 31, 1996, 1997 and 1998,
respectively.
Deluxe Pattern Corporation ("Deluxe"), a corporation wholly owned by Mr.
Winget's living trust since 1989, provides an advanced design, model and
tool-building facility, and is engaged in the business of providing design and
model and tool-building services to us and to customers unaffiliated with us.
Since July, 1992, Venture has occupied and staffed the Deluxe facility pursuant
to a usage agreement. Venture paid Deluxe usage fees of $0.4 million for each of
the years ended December 31, 1996, 1997 and 1998. Such fees are based upon the
amount of time the facility and advanced equipment housed there are made
available to us. In addition to the usage fees, Venture paid Deluxe $4.3
million, $9.2 million and $6.6 million for the years ended December 31, 1996,
1997 and 1998, respectively, for the purchase of goods and services and
equipment at net book value. Deluxe does not directly employ its own workforce,
but rather, our employees are made available to Deluxe on an as needed basis,
for which Deluxe pays us a fee. During the years ended December 31, 1996, 1997
and 1998, Venture made sales to Deluxe of $1.1 million each year, and Deluxe
paid Venture $9.6 million, $4.6 million and $17.3 million, respectively, for
time spent by Venture's employees on Deluxe business.
Harper Properties of Clinton Township Limited Partnership ("Harper
Properties") leases its Harper facility to us pursuant to an operating lease
which terminates on June 7, 1999 (the "Harper Lease"). Realven Corporation
("Realven") leases the machinery and equipment located at the Harper facility to
us pursuant to an operating lease which also terminates on June 7, 1999 (the
"Realven Lease"). Both leases are expected to be renewed prior to the
termination date. Harper Properties is a limited partnership in which the living
trusts of Mr. Winget and his wife, Alicia, and an affiliated company are the
general partners and Mr. Winget, members of his family, A. James Schutz, an
Executive Manager of the Company, and Michael G. Torakis, an Executive Manager
of the Company, are the limited partners. Realven is a corporation wholly owned
by Mr. Winget and his wife, Alicia. The Harper Lease provides for semi-annual
lease payments. Harper Properties and Realven have the right to require us to
enter into negotiations regarding an increase in the lease payments under the
Harper Lease and the Realven Lease, so that lease payments under these leases
will reflect all expenses to Harper Properties, Realven and their owners.
Venture has made several improvements to the Harper facility and the machinery
and equipment leased from Realven, and has accounted for them as leasehold
improvements. At the termination of the Harper and Realven Leases, Harper
Properties and Realven, respectively, will retain the value, if any, of the
leasehold improvements. Venture paid Harper Properties $1.7 million in each of
the years ended December 31, 1996, 1997 and 1998, respectively, under the Harper
Lease. Venture paid Realven $0.4 million in each of the years ended December 31,
1996, 1997 and 1998, respectively, under the Realven Lease.
Mr. Winget has since 1991 allowed Venture to use approximately 12 molding
machines pursuant to the terms of usage agreements. In January of 1994, Mr.
Winget leased 28 additional injection molding machines to Venture as part of the
expansions of the Harper and Groesbeck facilities. Mr. Winget also leases
certain injection molding equipment to us. In February of 1995, Mr. Winget
contributed and assigned his interests in the leases to the various injection
molding machines and equipment to a new entity, Venture Heavy Machinery Limited
Liability Company. Venture paid Venture Heavy Machinery Limited Liability
Company $1.8 million in each of the years ended December 31, 1996, 1997 and
1998, respectively, under the usage agreements.
Venture Real Estate Acquisition Company and Venture Equipment Acquisition
Company, each wholly owned by Mr. Winget's living trust, acquired a 176,000
square foot injection molding facility and the machinery and equipment located
therein (including 35 molding machines), on February 4, 1994. Venture entered
into usage agreements for such facility (the Masonic facility), machinery and
equipment, the terms of which were reviewed and approved by the Fairness
Committee. During 1996,
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1997 and 1998 Venture paid $1.3 million, $1.3 million and $1.3 million,
respectively, to Venture Real Estate Acquisition Company and Venture Equipment
Acquisition Company pursuant to these agreements.
BUSINESS RELATIONSHIPS
We maintain ongoing business relationships with affiliates, as set forth
below:
Nova Corporation ("Nova") is a corporation in which Windall Industries, a
corporation in which Mr. Winget owns a 49% equity interest and a former
Executive Manager of Venture owns the controlling 51% interest. Nova is a
successor to Windall Industries' business. Nova supplies us with certain small
parts or components of large assemblies that are sold to our customers. Venture
paid Nova $2.3 million, $1.0 million and $1.5 million for the years ended
December 31, 1996, 1997 and 1998, respectively. In connection with this
relationship, Venture has provided Nova with various raw materials at cost and
received commission income, for which Nova paid Venture $0.8 million, $0.3
million and $0.4 million in the years ended December 31, 1996, 1997 and 1998,
respectively. Nova sells products to other customers besides us, and has and
will compete with us for certain contracts. Nova paid Venture $0.2 million each
year pursuant to machinery and equipment operating leases for each of the years
ended December 31, 1996, 1997 and 1998. Venture paid Windall Industries usage
fees of $80,000 in each of the years ended December 31, 1996, 1997 and 1998.
Venture Sales and Engineering ("VS&E") and Venture Foreign Sales
Corporation ("VFS"), corporations wholly owned by Mr. Winget, serve as our
outside sales agencies for sales of products manufactured at our Vemco, Inc.,
Venture Industries and Venture Grand Rapids facilities. Currently, we pay VS&E
and VFS, in the aggregate, a sales commission of 3% on all production sales.
Venture paid VS&E, $6.4 million, $7.3 million and $10.4 million in the years
ended December 31, 1996, 1997 and 1998, respectively. Venture made no payments
to VFS in the years ended December 31, 1996, 1997 and 1998. VS&E has conducted
sales and marketing activities around the world for us and has been advanced
certain funds in order to carry on that work on our behalf.
VAC has, since 1991, performed sequencing and value-added assembly of parts
manufactured at our Grand Blanc facility. Venture paid VAC $3.3 million in the
year ended December 31, 1996 under this arrangement. During the years ended
December 31, 1996 Venture made sales to VAC of $69,000. Beginning October 1,
1996 the manufacturing services previously provided by VAC have been contracted
to MAST Services LLC, a company in which N. Matthew Winget, Mr. Winget's son,
owned a minority interest until the fourth quarter of 1998. Services for the
period ending December 31, 1996 were $0.3 million, and for the years ended
December 31, 1997 and 1998 were $2.7 million and $2.3 million, respectively.
MANAGEMENT SERVICES
Venture Service Company ("Venture Service") provides administrative
services and insurance to Deluxe, Windall Industries, VS&E and VAC. Deluxe,
Windall Industries, VS&E and VAC paid us $1.8 million and $0.2 million in the
years ended December 31, 1996 and 1997, respectively. No amounts were paid in
1998.
Venture provided Venture Asia Pacific Pty. Ltd. and its subsidiaries
("VAP") with management and sales services, for which they paid Venture $5.1
million, $4.0 million and $4.5 million for 1996, 1997 and 1998, respectively. In
addition, VAP also reimbursed Venture for certain other expenditures made on its
behalf and assigned certain tooling contracts to Venture.
Pompo Insurance & Indemnity Company Ltd. ("Pompo"), a Barbados corporation
indirectly wholly owned by Mr. Winget, was incorporated in 1992 under the
Barbados Exempt Insurance Act. We purchase insurance from Pompo to cover certain
medical claims by our employees and certain workers compensation claims. Venture
has accounted for this arrangement using the deposit method
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wherein the full amount of the estimated liability for such claims is recorded
in other liabilities and the premiums paid to Pompo are recorded in other assets
until such time that the claims are settled. We remain primarily liable for any
amounts in excess of insurance coverage or any amounts not paid by Pompo under
these coverages. If a liability is settled for less than the amount of the
premium paid to Pompo, a portion of the excess is available as a premium credit
on future insurance. No amounts were paid in 1996 or 1997. In 1998 Venture paid
Pompo $0.6 million in premiums. Venture received and utilized premium credits of
$0.2 million and $0.7 million, respectively for 1996 and 1998. No premium
credits were utilized in 1997.
OTHER
From time to time, we pay certain expenses on behalf of Mr. Winget which he
is obligated to repay to us. Such amounts payable by Mr. Winget do not bear
interest and are payable on demand. Mr. Winget was not indebted to Venture for
such expenses at December 31, 1996 or 1997. At December 31, 1998, Mr. Winget's
indebtedness to Venture for such expenses was $867,000. The highest amount of
such indebtedness outstanding at any one time during such periods was $867,000.
Such indebtedness was repaid in its entirety in the first quarter of 1999.
Mr. Winget and his wife, Alicia, own the Acropolis Resort, which consists
of several separate units and a lodge near Gaylord, Michigan, a resort community
north of Detroit. We lease this facility from Mr. Winget primarily for use by
our employees, who are permitted to use the facility on an availability basis.
Cumulative leasehold improvements to this facility through December 31, 1998
aggregate $0.3 million. Our lease obligation to Mr. Winget is based upon the
actual use of the facility by our employees, provided that we are required to
pay for the use of 500 room nights per calendar year (approximately $25,000)
whether or not such rooms are rented. Venture paid Mr. Winget $80,000, $50,000
and $90,000 in the years ended December 31, 1996, 1997 and 1998, respectively,
under this arrangement.
Farm and Country Real Estate Company ("Farm and Country"), a corporation
wholly owned by Mr. Winget, leases to us approximately 84 acres of undeveloped
land adjacent to our Grand Blanc facility on a month-to-month basis. This lease
provides for monthly rental payments of $16,100. Rent paid in 1996, 1997 and
1998 was $0.2 million in each year.
Mr. Winget and Patent Holdings, Inc., a corporation wholly owned by Mr.
Winget, have granted to us non-exclusive, royalty free licenses to certain
patents which have been issued under applications filed by Mr. Winget, as
assignee. Mr. Winget and the affiliated companies also generally permit us to
utilize proprietary technologies or processes, such as REAP, which are developed
by Deluxe and the affiliated companies. The licenses are perpetual, but provide
that the licensor may negotiate a reasonable royalty in the event that Mr.
Winget or an Excluded Person (as defined in the indenture relating to the 1997
Senior Notes) no longer owns at least 80% of the beneficial interest of the
Trust.
On July 1, 1996, Venture Industries Corporation and its affiliated
companies (not including the Trust or Venture Canada) (the "Venture
Guarantors"), along with VIC Management, L.L.C. ("VIC"), a limited liability
company wholly owned, directly or indirectly, by Mr. Winget, entered into an
agreement guaranteeing up to $3.5 million of the obligations of Atlantic
Automotive Components, L.L.C. ("Atlantic") to RIC Management Corp. ("RIC"). This
guarantee is one of a series of transactions whereby VIC acquired RIC's minority
interest in Atlantic. Deluxe agreed to fully indemnify the Venture Guarantors
for all amounts paid under the guarantee.
We recently agreed to a number of corporate and non-resident golf
memberships for certain of our employees in a golf club owned by companies Mr.
Winget controls. The aggregate initial fee for such memberships is approximately
$1.5 million, and the annual dues will be approximately $0.3 million. The
initial fees are refundable upon termination, over various periods. We will no
longer pay dues for such employees in other clubs to which they may belong.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
The following summary of certain of our debt agreements does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
such agreements, including the definitions therein of terms not defined herein.
NEW CREDIT AGREEMENT
On May 27, 1999, we entered into the New Credit Agreement and, as of June
4, 1999, we entered into the First Amendment to the New Credit Agreement. The
Issuer, as successor to Venture Holdings Trust, assumed the obligations of
Venture Holdings Trust under the New Credit Agreement and Venture Holdings Trust
was released from such obligations. Set forth below is a summary of the
principal terms of the New Credit Agreement. The following summary is not
complete and is qualified by reference to all of the documents governing the New
Credit Agreement.
Pursuant to the New Credit Agreement, as amended, The First National Bank
of Chicago and certain other lenders provided, subject to certain terms and
conditions, credit facilities aggregating $575.0 million, including (1) a 5 year
$175.0 million Revolving Credit Facility; (2) a 5 year $75.0 million Term Loan
A; (3) a 6 year $200.0 million Term Loan B; and (4) an 18 month $125.0 million
Interim Term Loan. The New Credit Agreement requires that $125.0 million
principal amount outstanding thereunder be refinanced within 18 months from the
closing date, utilizing the proceeds from the sale of securities that rank pari
passu in right of payment with, or are junior to, the 12% Senior Subordinated
Notes due 2009. See "Risk Factors -- Substantial Leverage."
The Revolving Credit Facility permits us to borrow up to the lesser of a
borrowing base computed as a percentage of accounts receivable and inventory, or
$175.0 million less the amount of any letter of credit issued against the New
Credit Agreement. Pursuant to the borrowing base formula, as of December 31,
1998 we could have utilized the full amount available under the Revolving Credit
Facility.
The New Credit Agreement provides for a multicurrency funding capability to
be made available to the Issuer. At present, loans may be made in U.S. dollars,
euros or, under certain circumstances, other available and freely tradeable
foreign currencies.
Neither the Revolving Credit Facility nor the Interim Term Loan requires
scheduled amortization payments or scheduled commitment reductions prior to
maturity. Each of Term Loan A and Term Loan B requires quarterly amortization
payments through maturity. The documents governing the New Credit Agreement,
under certain circumstances, require mandatory prepayments and commitment
reductions. Such circumstances include asset sales, issuances of equity and the
generation of cash flow in excess of certain amounts, and a change of control.
In addition, the borrowers have the right to make optional prepayments and
commitment reductions.
All indebtedness under the New Credit Agreement is senior secured
indebtedness. Obligations under the New Credit Agreement are jointly and
severally guaranteed by the Issuer's domestic subsidiaries and, under certain
circumstances, the agent bank may request guarantees of foreign subsidiaries,
however, no such guarantees are contemplated at this time. Obligations under the
New Credit Agreement are secured by first priority security interests in
substantially all of the assets of the Issuer and its domestic subsidiaries. As
a result, payments may need to be made under the New Credit Agreement even
though payments are then due with respect to the Exchange Notes. See
"Description of Exchange Notes."
Interest on the Revolving Credit Facility, Term Loan A and the Interim Term
Loan accrues at an annual rate of interest equal to, at our option, either (a)
the Alternate Base Rate, as announced by The First National Bank of Chicago
("ABR"), plus an applicable margin (which applicable margin will initially be
1.25% and thereafter may range from 0% to 1.25%) (the "ABR rate") or
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(b) at the London Interbank Offered Rate (adjusted) for a specified interest
period ("LIBOR"), for the applicable currency, plus an applicable margin (which
applicable margin will initially be 2.75% and thereafter may range from 1.50% to
2.75%).
Interest on Term Loan B accrues at an annual rate of interest equal to
either (a) the ABR, plus an applicable margin (which applicable margin will
initially be 1.75% and thereafter may range from 1.25% to 1.75%) (together with
the ABR rate the "floating rate") or (b) at LIBOR plus an applicable margin
(which applicable margin will initially be 3.25% and thereafter may range from
2.75% to 3.50%).
Interest on all borrowings under the New Credit Agreement bearing interest
at a floating rate is payable quarterly and interest on all borrowings under the
New Credit Agreement bearing interest based on LIBOR is payable at the end of
the interest period pertaining thereto unless the interest period is 6 months,
in which case it will also be payable 3 months after the interest period
commences.
We also pay an unused commitment fee on the Revolving Credit Facility which
commitment fee was initially 0.50% of the unused amount of the Revolving Credit
Facility and thereafter may range from 0.375% to 0.50%.
The documents governing the New Credit Agreement contain a number of
covenants that, among other things, restrict our ability to dispose of assets,
incur additional indebtedness, incur guarantee obligations, pay dividends,
create liens, make investments, make acquisitions, engage in mergers or
consolidations, engage in certain transactions with affiliates and otherwise
restrict corporate activities. Such covenants are more restrictive than those
related to the Exchange Notes. In addition, the documents governing the New
Credit Agreement require compliance with financial tests and ratios.
THE 1997 SENIOR NOTES
The Issuer, as successor to Venture Holdings Trust, and certain of the
guarantors of the Outstanding Notes are jointly and severally liable as issuers
under an indenture relating to the 1997 Senior Notes. The 1997 Senior Notes bear
interest at a rate per annum of 9 1/2% and mature on July 1, 2005. As of
December 31, 1998, $205.0 million was outstanding under the 1997 Senior Notes.
Interest on the 1997 Senior Notes is payable semi-annually on January 1 and July
1 of each year. The 1997 Senior Notes are redeemable, in whole or in part, at
the option of the issuers of such notes at any time on or after July 1, 2001 at
104.750%, after July 1, 2002 at 102.375%, and after July 1, 2003 at 100%.
The indenture for the 1997 Senior Notes contains covenants that are
generally more restrictive than those related to the Exchange Notes. The
covenants contained in the indenture for the 1997 Senior Notes relate to the
following matters: (1) limitations on additional indebtedness; (2) limitations
on restricted payments; (3) limitations on transactions with affiliates; (4)
corporate opportunities; (5) the application of proceeds of certain assets
sales; (6) limitations on liens; (7) limitations on issuance of guarantees and
pledges for indebtedness; (8) limitation on equity interests of subsidiaries;
(9) limitations on dividends and other payment restrictions; (10) limitations on
other senior indebtedness; (11) limitations on new lines of business; and (12)
restrictions on mergers, consolidations and transfers of all or substantially
all of the assets of the Issuer.
Each of the Issuer's domestic subsidiaries that are not issuers of the 1997
Senior Notes are guarantors of the 1997 Senior Notes.
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DESCRIPTION OF EXCHANGE NOTES
You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the word
"Trust" refers only to Venture Holdings Company LLC, as successor to Venture
Holdings Trust following the Trust Contribution on May 27, 1999, and not to any
of its subsidiaries. Certain defined terms used in this description but not
defined below under "-- Certain Definitions" have the meanings assigned to them
in the Indentures.
The Outstanding Senior Notes were, and the Senior Exchange Notes will be,
issued under a an Indenture (the "New Senior Indenture"), dated May 27, 1999,
among the Trust, the Guarantors and The Huntington National Bank, as trustee
(the "Trustee"). The Outstanding Senior Subordinated Notes were, and the Senior
Subordinated Exchange Notes will be, issued under an Indenture (the "New Senior
Subordinated Indenture" and, together with the New Senior Indenture, the
"Indentures"), dated May 27, 1999 among the Trust, the Guarantors and the
Trustee. The terms of the Exchange Notes are the same as the terms of the
Outstanding Notes, except that (1) the Trust registered the Exchange Notes under
the Securities Act of 1933, as amended, and their transfer is not restricted
like the Outstanding Notes and (2) holders of the Exchange Notes are not
entitled to certain rights under the Registration Rights Agreement.
Because this section of the Prospectus merely summarizes the terms of the
Exchange Notes, the Indentures and the Registration Rights Agreement, you should
read the Indentures, the Registration Rights Agreement and the relevant portions
of the Trust Indenture Act of 1939 for more complete information regarding the
terms of the Outstanding Notes and the Exchange Notes. Copies of the Indentures
and Registration Rights Agreement can be obtained by following the instructions
contained in this Prospectus under the headings "Where You Can Find More
Information." For the purposes of the remainder of this section entitled
"Description of Exchange Notes," the term the "Notes," refers to the Exchange
Notes, the term the "New Senior Notes" refers to the Senior Exchange Notes, and
the term the "New Senior Subordinated Notes" refers to the Senior Subordinated
Exchange Notes.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
THE NEW SENIOR SUBORDINATED NOTES
The New Senior Subordinated Notes:
- are general unsecured obligations of the Trust;
- are subordinated in right of payment to all existing and future Senior
Debt of the Trust, including the 1997 Senior Notes and the New Senior
Notes;
- are pari passu in right of payment with any future senior subordinated
Indebtedness of the Trust; and
- are unconditionally guaranteed by the Guarantors.
THE NEW SENIOR NOTES
The New Senior Notes:
- are general unsecured obligations of the Trust;
- are pari passu in right of payment with all existing and future unsecured
unsubordinated Indebtedness of the Trust, including the 1997 Senior
Notes;
- are effectively subordinated to all secured debt of the Trust, including
that incurred under the Credit Agreement;
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- are senior in right of payment to any current and future subordinated
Indebtedness of the Trust, including the New Senior Subordinated Notes;
and
- are unconditionally guaranteed by the Guarantors.
RESTRICTED SUBSIDIARIES
As of the Issue Date, all of our Subsidiaries were "Restricted
Subsidiaries." However, under the circumstances described below under the
subheading "-- Certain Covenants -- Designation of Restricted and Unrestricted
Subsidiaries," we will be permitted to designate certain of our subsidiaries as
"Unrestricted Subsidiaries." Our Subsidiaries which are designated as
Unrestricted Subsidiaries will not be subject to many of the restrictive
covenants in the Indentures and will not guarantee the Notes.
THE SUBSIDIARY GUARANTEES
The Notes are guaranteed by the Guarantors.
Each Subsidiary Guarantee of the New Senior Subordinated Notes:
- is a general unsecured obligation of the Guarantor;
- is subordinated in right of payment to all existing and future Senior
Debt of the Guarantors, including the Guarantors' Guarantee of the 1997
Senior Notes and the New Senior Notes; and
- is pari passu in right of payment with any future senior subordinated
Indebtedness of the Guarantor.
Each Subsidiary Guarantee of the New Senior Notes:
- is a general unsecured obligation of the Guarantor;
- is senior in right of payment to all existing and future subordinated
Indebtedness of the Guarantors, including the Guarantors' Guarantees of
the New Senior Subordinated Notes;
- is pari passu in right of payment with any current and future unsecured
unsubordinated Indebtedness of the Guarantors, including the 1997 Senior
Notes; and
- is effectively subordinated to all secured debt of the Guarantors,
including that incurred under the Credit Agreement.
Our foreign subsidiaries did not guarantee the Notes on the Issue Date. In
the event of a bankruptcy, liquidation or reorganization of any of these
non-guarantor subsidiaries, these non-guarantor subsidiaries will pay the
holders of their debts and their trade creditors before they will be able to
distribute any of their assets to us. The guarantor subsidiaries generated 33.1%
of our consolidated revenues in the twelve-month period ended December 31, 1998
and 32.1% of our consolidated revenues in the three-month period ended March 31,
1999, each on a pro forma basis. The guarantor subsidiaries held 43.0% of our
consolidated assets as of December 31, 1998 and 43.5% of our consolidated assets
as of March 3, 1999, each on a pro forma basis after giving effect to the
Acquisition. See "Risk Factors -- Company Structure; Not all Subsidiaries are
Guarantors."
PRINCIPAL, MATURITY AND INTEREST
NEW SENIOR SUBORDINATED NOTES
The New Senior Subordinated Indenture provides for the issuance by the
Trust of New Senior Subordinated Notes with a maximum aggregate principal amount
of $250 million, of which $125 million of the Outstanding Senior Subordinated
Notes were issued on May 27, 1999. The Trust may issue additional senior
subordinated notes (the "Additional New Senior Subordinated Notes") from
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time to time. Any offering of Additional New Senior Subordinated Notes is
subject to the covenant described below under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock." The
New Senior Subordinated Notes and any Additional New Senior Subordinated Notes
subsequently issued under the New Senior Subordinated Indenture would be treated
as a single class for all purposes under the New Senior Subordinated Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase. The Trust will issue New Senior Subordinated Notes in denominations of
$1,000 and integral multiples of $1,000. The New Senior Subordinated Notes will
mature on June 1, 2009.
Interest on the New Senior Subordinated Notes will accrue at the rate of
12% per annum and will be payable semi-annually in arrears on June 1 and
December 1, commencing on December 1, 1999. The Company will make each interest
payment to the Holders of record of New Senior Subordinated Notes on the
immediately preceding May 15 and November 15.
Interest on the New Senior Subordinated Notes will accrue from the date of
original issuance or, if interest has already been paid, from the date it was
most recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
NEW SENIOR NOTES
The New Senior Indenture provides for the issuance by the Trust of Notes
with a maximum aggregate principal amount of $175 million, of which $125 million
of the Outstanding Senior Notes were issued on May 27, 1999. The Trust may issue
additional senior notes (the "Additional New Senior Notes") from time to time.
Any offering of Additional New Senior Notes is subject to the covenant described
below under the caption "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock." The New Senior Notes and any Additional New Senior
Notes subsequently issued under the New Senior Indenture would be treated as a
single class for all purposes under the New Senior Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase. The Trust
will issue New Senior Notes in denominations of $1,000 and integral multiples of
$1,000. The New Senior Notes will mature on June 1, 2007.
Interest on the New Senior Notes will accrue at the rate of 11% per annum
and will be payable semi-annually in arrears on June 1 and December 1,
commencing on December 1, 1999. The Trust will make each interest payment to the
Holders of record of New Senior Notes on the immediately preceding May 15 and
November 15.
Interest on the New Senior Notes will accrue from the date of original
issuance or, if interest has already been paid, from the date it was most
recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holder of $1,000,000 in aggregate principal amount of Notes or more
has given wire transfer instructions to the Company, the Company will pay all
principal, interest and premium and Liquidated Damages, if any, on that Holder's
Notes in accordance with those instructions. All other payments on Notes will be
made at the office or agency of the Paying Agent and Registrar within the City
and State of New York unless the Trust elects to make interest payments by check
mailed to the Holders at their addresses set forth in the register of Holders.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as Paying Agent and Registrar. The Trust may
change the Paying Agent or Registrar without prior notice to the Holders, and
the Trust or any of its Subsidiaries may act as Paying Agent or Registrar.
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TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the applicable
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the Trust
may require a Holder to pay any taxes and fees required by law or permitted by
the applicable Indenture. The Trust is not required to transfer or exchange any
Note selected for redemption. Also, the Trust is not required to transfer or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes (including the determination of who is entitled to payments).
SUBSIDIARY GUARANTEES
The Guarantors will jointly and severally guarantee the Trust's obligations
under the Notes. Each Subsidiary Guarantee of the New Senior Subordinated Notes
will be subordinated to the payment in full of all unsubordinated Indebtedness
of that Guarantor. Each Subsidiary Guarantee of the New Senior Notes will be
pari passu to all unsecured unsubordinated Indebtedness of that Guarantor and
senior to all subordinated Indebtedness of that Guarantor. The obligations of
each Guarantor under its Subsidiary Guarantee will be limited as necessary to
prevent that Subsidiary Guarantee from constituting a fraudulent conveyance
under applicable law. See "Risk Factors -- Fraudulent Conveyance Matters."
SUBORDINATION OF THE NEW SENIOR SUBORDINATED NOTES
The payment of principal, interest, premium and Liquidated Damages, if any,
on the New Senior Subordinated Notes will be subordinated to the prior payment
in full of all Senior Debt of the Trust and Guarantors, including Senior Debt
incurred after the Issue Date.
The holders of Senior Debt will be entitled to receive payment in full in
cash or Cash Equivalents of all Obligations due in respect of Senior Debt
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt) before the Holders of New Senior
Subordinated Notes will be entitled to receive any payment with respect to the
New Senior Subordinated Notes, including, without limitation, any redemption,
defeasance or other acquisition of the New Senior Subordinated Notes. Until all
Obligations with respect to Senior Debt are paid in full in cash or Cash
Equivalents, any payment or distribution to which the Holders of New Senior
Subordinated Notes would be entitled shall be made to the holders of Senior Debt
(except that Holders of New Senior Subordinated Notes may receive and retain
Permitted Junior Securities and payments made from the trust described under
"-- Legal Defeasance and Covenant Defeasance") in the event of any distribution
to creditors of the Trust or the Guarantors:
(1) in a liquidation or dissolution;
(2) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Trust or Guarantors or their property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of the Trust's or the Guarantors' assets and
liabilities.
The Trust and Guarantors of the New Senior Subordinated Notes also may not
make any payment in respect of the New Senior Subordinated Notes (except in
Permitted Junior Securities or from the trust described under "-- Legal
Defeasance and Covenant Defeasance") if:
(1) a default in the payment of the principal of, premium, if any, or
interest on Designated Senior Debt occurs and is continuing beyond any
applicable grace period (a "Payment Default"); or
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(2) any other default occurs and is continuing on any series of
Designated Senior Debt that permits holders of that series of Designated
Senior Debt to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the Trust or the holders of
any Designated Senior Debt.
Payments on the New Senior Subordinated Notes may and shall be resumed:
(1) in the case of a Payment Default, upon the date on which such
default is cured or waived; and
(2) in case of a nonpayment default, the earlier of the date on which
such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the
maturity of any Designated Senior Debt has been accelerated or a Payment
Default has occurred.
No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice; and
(2) all scheduled payments of principal, interest, premium and
Liquidated Damages, if any, on the New Senior Subordinated Notes that have
come due have been paid in full in cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 days.
If the Trustee or any Holder of the New Senior Subordinated Notes receives
a payment in respect of the Notes (except in Permitted Junior Securities or from
the trust described under "-- Legal Defeasance and Covenant Defeasance") when:
(1) the payment is prohibited by the subordination provisions of the
New Senior Subordinated Indenture; and
(2) the Trustee or the Holder has actual knowledge that the payment is
prohibited;
the Trustee or the Holder, as the case may be, shall hold the payment in trust
for the benefit of the holders of Senior Debt. Upon the proper written request
of the holders of Senior Debt, the Trustee or the Holder of New Senior
Subordinated Notes, as the case may be, shall deliver the amounts held in trust
to the holders of Senior Debt or their proper representative.
The Trust must promptly notify holders of Senior Debt if payment of the New
Senior Subordinated Notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event
of a bankruptcy, liquidation or reorganization of the Trust, Holders of New
Senior Subordinated Notes may recover less ratably than creditors of the Trust
or Guarantors who are holders of Senior Debt. After giving pro forma effect to
the Acquisition and the financing thereof, the New Senior Subordinated Notes
would have been junior to $725.5 million of Senior Debt, including the New
Senior Notes and 1997 Senior Notes. See "Risk Factors -- Subordination of Senior
Subordinated Exchange Notes."
OPTIONAL REDEMPTION
At any time prior to June 1, 2002, the Trust may redeem up to 35% of the
aggregate principal amount of each of the New Senior Notes and the New Senior
Subordinated Notes issued under the Indentures at a redemption price of 111% of
the principal amount of New Senior Notes redeemed and 112% of the New Senior
Subordinated Notes redeemed, in each case plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date, with the net cash proceeds
of a Public Equity Offering; provided that:
(1) at least 65% of the aggregate principal amount of each of the New
Senior Notes and the New Senior Subordinated Notes issued under each
Indenture remains outstanding
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immediately after the occurrence of such redemption (excluding Notes held
by the Trust and its Subsidiaries); and
(2) any such redemption must occur within 120 days of the date of the
closing of such Equity Offering.
Except pursuant to the preceding paragraph, the New Senior Notes will not
be redeemable at the Trust's option prior to June 1, 2003 and the New Senior
Subordinated Notes will not be redeemable at the Trust's option prior to June 1,
2004.
After June 1, 2004, the Trust may redeem all or a part of the New Senior
Subordinated Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on June 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004................................................. 106.00%
2005................................................. 104.00%
2006................................................. 102.00%
2007 and thereafter.................................. 100.00%
</TABLE>
After June 1, 2003, the Trust may redeem all or a part of the New Senior
Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on June 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003................................................. 105.50%
2004................................................. 103.67%
2005................................................. 101.83%
2006 and thereafter.................................. 100.00%
</TABLE>
MANDATORY REDEMPTION
The Trust is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each Holder of Notes will have the right to
require the Trust to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of that Holder's Notes pursuant to a Change of Control Offer
on the terms set forth in the Indentures. In the Change of Control Offer, the
Trust will offer a Change of Control Payment in cash equal to 101% of the
aggregate principal amount of Notes repurchased plus accrued and unpaid interest
and Liquidated Damages, if any, thereon, to the date of purchase. Within 20 days
following any Change of Control, the Trust will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes on the Change of Control Payment Date specified
in such notice, which date shall be no earlier than 20 Business Days and no
later than 55 Business Days from the date such notice is mailed, pursuant to the
procedures required by the Indentures and described in such notice. The Trust
will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a
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Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of the Indentures,
the Trust will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under the Change of Control
provisions of the Indentures by virtue of such conflict.
On the Change of Control Payment Date, the Trust will, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered;
and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Trust.
The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof.
With respect to the New Senior Subordinated Notes, prior to complying with
any of the provisions of this "Change of Control" covenant, but in any event
within 90 days following a Change of Control, the Trust will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of the New
Senior Subordinated Notes required by this covenant. The failure to repay such
Senior Debt or obtain such consents within such time period shall constitute an
Event of Default under the New Senior Subordinated Indenture. The Trust will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The provisions described above that require the Trust to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indentures are applicable. Except as
described above with respect to a Change of Control, the Indentures do not
contain provisions that permit the Holders of the Notes to require that the
Trust repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Trust will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes a Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indentures applicable to a Change of Control Offer made by the Trust, and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of the Trust and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of Notes to require the Trust to repurchase such Notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of the Trust and its Subsidiaries taken as a whole to another Person or
group may be uncertain.
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ASSET SALES
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
(1) the Trust (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) with respect to any single transaction or series of related
transactions that involves assets having a fair market value of more than
$10.0 million, such fair market value is determined by the Trust's Board of
Directors and evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee; and
(3) at least 85% of the consideration therefor received by the Trust
or such Restricted Subsidiary is in the form of cash or Cash Equivalents,
provided, however, that more than 15% of the total consideration may
consist of consideration other than cash or Cash Equivalents if (A) the
portion of such consideration that does not consist of cash or Cash
Equivalents consists of assets of a type ordinarily used in the operation
of a Permitted Business to be used by the Trust or a Restricted Subsidiary
in the conduct of a Permitted Business or Capital Stock of a Restricted
Subsidiary engaged in a Permitted Business (or a Person which becomes such
a Restricted Subsidiary as a result of the receipt of such consideration),
(B) the terms of such Asset Sale have been approved by a majority of the
members of the Board of Directors of the Trust and (C) if the value of the
assets being disposed of by the Trust or such Restricted Subsidiary in such
transaction (as determined in good faith by such members of the Board of
Directors) is at least $10.0 million, the Board of Directors of the Trust
has received a written opinion of a nationally recognized investment
banking firm (or other nationally recognized valuation expert) to the
effect that such Asset Sale is fair, from a financial point of view, to the
Trust and the Trust has delivered a copy of such opinion to the Trustee.
For purposes of this provision (3), each of the following shall be deemed
to be cash:
(a) any liabilities (as shown on the Trust's or such Restricted
Subsidiary's most recent balance sheet), of the Trust or any Restricted
Subsidiary (other than contingent liabilities (except to the extent that
a reserve or other liability in respect thereof is reflected in
accordance with GAAP on the most recent balance sheet of the Trust or
such Restricted Subsidiary) and liabilities that are by their terms
subordinated to the Notes or any Subsidiary Guarantee) that are assumed
by the transferee of any such assets pursuant to a customary novation
agreement that releases the Trust or such Restricted Subsidiary from
further liability; and
(b) any securities, notes or other obligations received by the
Trust or any such Restricted Subsidiary from such transferee that within
60 days of such Asset Sale are converted by the Trust or such Restricted
Subsidiary into cash or Cash Equivalents (to the extent of the cash or
Cash Equivalents received in that conversion).
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Trust or Restricted Subsidiary may apply such Net Proceeds at its option:
(1) (a) with respect to the New Senior Subordinated Indenture, to
repay Senior Debt and, if the Senior Debt repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto or
(b) with respect to the New Senior Indenture, to repay Indebtedness under
Credit Facilities that are not expressly subordinated by their terms to any
other Indebtedness of the Trust or such Guarantors and, if the Indebtedness
repaid is revolving credit Indebtedness, to correspondingly reduce
commitments with respect thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure;
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(4) to acquire other long-term assets that are used or useful in a
Permitted Business; or
(5) to make and consummate an Asset Sale Offer (as described below).
Pending the final application of any such Net Proceeds, the Trust or such
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by the
Indentures.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will constitute "Excess Proceeds." Each
Indenture will provide that when (i) the aggregate amount of Excess Proceeds
exceeds $10.0 million or (ii) the Trust or any Restricted Subsidiary is required
to make an offer to purchase or redeem any Indebtedness which is pari passu with
the applicable Notes and which contains provisions similar to those set forth in
such Indenture with respect to offers to purchase or redeem with asset sale
proceeds, then in each such case, the Trust will make an Asset Sale Offer to all
Holders of Notes issued thereunder and all holders of other Indebtedness that is
pari passu with such Notes containing provisions similar to those set forth in
the applicable Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase the maximum principal amount of such
Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Trust or any
Restricted Subsidiary may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indentures. If the aggregate principal amount of applicable
Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other pari passu Indebtedness to be purchased on a pro rata basis based on
the principal amount of Notes and such other pari passu Indebtedness tendered.
Upon completion of each Asset Sale Offer pursuant to an Indenture, the amount of
Excess Proceeds shall be reset at zero for purposes of such Indenture. The Trust
shall commence an Asset Sale Offer within ten (10) Business Days after the
amount of Excess Proceeds exceeds $10 million, such Asset Sale Offer shall
remain open for at least twenty (20) Business Days and the Trust shall complete
such Asset Sale Offer within thirty (30) Business Days after it is commenced.
All cash or Cash Equivalents received by the Trust or a Restricted
Subsidiary from an Event of Loss shall be used, invested, used for prepayment of
Indebtedness, or used to repurchase Notes, all of the foregoing within the
periods and as otherwise provided in the prior three paragraphs.
The Trust will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indentures, the Trust will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indentures by virtue of such
compliance.
OTHER AGREEMENTS
With respect to the New Senior Notes, the agreements governing the Trust's
other Indebtedness contain requirements regarding repurchases of Notes or the
repayment of Indebtedness upon the occurrence of certain events, including
events that would constitute a Change of Control or an Asset Sale. In addition,
the exercise by the Holders of New Senior Notes of their right to require the
Trust to repurchase the New Senior Notes upon a Change of Control or an Asset
Sale could cause a default under these other agreements, even if the Change of
Control or Asset Sale itself does not, due to the financial effect of such
repurchases on the Trust. The Trust's ability to pay cash to the Holders of New
Senior Notes upon such a repurchase may be limited by the Trust's then existing
financial resources.
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With respect to the New Senior Subordinated Notes, the agreements governing
the Trust's outstanding Senior Debt, including the New Senior Notes, the 1997
Senior Notes and the Credit Agreement, currently prohibit the Trust from
purchasing any New Senior Subordinated Notes, and also provide that certain
change of control or asset sale events with respect to the Trust would
constitute a default under these agreements. Any future credit agreements or
other agreements relating to Senior Debt to which the Trust becomes a party may
contain similar restrictions and provisions. In the event a Change of Control or
Asset Sale occurs at a time when the Trust is prohibited from purchasing New
Senior Subordinated Notes, the Trust could seek the consent of its senior
lenders to the purchase of New Senior Subordinated Notes or could attempt to
refinance the borrowings that contain such prohibition. If the Trust does not
obtain such a consent or repay such borrowings, the Trust will remain prohibited
from purchasing New Senior Subordinated Notes. In such case, the Trust's failure
to purchase tendered New Senior Subordinated Notes would constitute an Event of
Default under the New Senior Subordinated Indenture which would, in turn,
constitute a default under such Senior Debt. In such circumstances, the
subordination provisions in the New Senior Subordinated Indenture would likely
restrict payments to the Holders of New Senior Subordinated Notes. The Trust's
ability to pay cash to the Holders of New Senior Subordinated Notes upon a
repurchase may be limited by the Trust's then existing financial resources.
See "Risk Factors -- Financing Change of Control Offer."
SELECTION AND NOTICE
If less than all of the Notes issued under an Indenture are to be redeemed
at any time, the Trustee will select Notes for redemption as follows:
(1) if the Notes are listed, in compliance with the requirements of
the principal national securities exchange on which the Notes are listed;
or
(2) if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate.
No Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of redemption that
relates to that Note shall state the portion of the principal amount thereof to
be redeemed. A new Note in principal amount equal to the unredeemed portion of
the original Note will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Trust's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Trust or any
of its Restricted Subsidiaries), or to the direct or indirect holders of
the Trust's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Trust or to the
Trust or a Restricted Subsidiary of the Trust);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Trust) any Equity Interests of the Trust or any
direct or indirect parent of the Trust;
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(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Subsidiary Guarantees, except a payment of
interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments");
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(2) the Trust would, at the time of such Restricted Payment and after
giving Pro Forma Effect thereto as if such Restricted Payment had been made
at the beginning of the applicable Reference Period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of the covenant
described below under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock;" and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Trust and its Restricted Subsidiaries
after the Issue Date, excluding Restricted Payments permitted by clauses
(2), (3), (4), (5) and (6) of the next succeeding paragraph, is less than
the sum, without duplication, of:
(a) $20 million; plus
(b) 50% of the Consolidated Net Income of the Trust for the period
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the Issue Date to the end of the Trust's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit); plus
(c) 100% of the aggregate net cash proceeds received by the Trust
since the Issue Date as a contribution to its common equity capital or
from the issue or sale of Equity Interests of the Trust (other than
Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Trust that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Trust); plus
(d) to the extent that any Restricted Investment that was made
after the Issue Date is sold for cash or otherwise liquidated or repaid
for cash, the lesser of (i) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(ii) the initial amount of such Restricted Investment; plus
(e) in the event that any Unrestricted Subsidiary is designated as
a Restricted Subsidiary in accordance with the provisions of the
applicable Indenture, the lesser of (i) the aggregate fair market value
of all outstanding Investments owned by the Trust and its Restricted
Subsidiaries in such Subsidiary at the time of such designation or (ii)
the aggregate amount of Restricted Investments made in such Unrestricted
Subsidiary since the Issue Date.
So long as no Default has occurred and is continuing or would be caused thereby,
the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indentures;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Trust or any Guarantor
or of any Equity Interests of the Trust
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in exchange for, or out of the net cash proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Trust) of, Equity
Interests of the Trust (other than Disqualified Stock); provided that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (3) (c) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
Indebtedness of the Trust or any Guarantor with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend or other distribution by a Subsidiary
of the Trust to the holders of its Equity Interests on a pro rata basis;
(5) (a) so long as the Trust is treated for federal, state or local
tax purposes as an entity described in Section 1361(c)(2), 1361(d) or
1361(e) of the Code, an S Corporation, a partnership or an entity that is
disregarded as an entity separate from its owner(s) (each a "Pass-Through
Entity"), the Trust shall be permitted to distribute to the
Beneficiary(ies) of the Trust (or pay compensation to the Beneficiary(ies)
of the Trust in lieu of such distributions) all amounts distributed to the
Trust by Subsidiaries or other Persons in which the Trust has a direct
investment (collectively, "Investee Companies") in cash as described below,
calculated before giving effect to such payments (such payments to be
referred to hereinafter as "Trust Tax Distributions"):
(1) on (or within 15 days prior to) each April 15, June 15,
September 15 and January 15 an amount not to exceed the minimum federal
and state estimated quarterly income and intangible tax payments
required to be made on such date by each Beneficiary of the Trust in
order to prevent underpayment of each such Beneficiary's estimated
income tax pursuant to the rules set forth in Section 6654(b) and
6654(d)(1) of the Code, or their successors or supplements, and any
similar provision of applicable state income and intangible tax law for
any state with respect to which the Investee Companies qualify as
Pass-Through Entities for state law purposes, such amount to be
calculated as though each such Beneficiary's only income and loss in
each such quarter relating to a required estimated payment was an amount
equal to the sum of the taxable income and loss of the Investee
Companies which are Pass-Through Entities. The foregoing amounts may be
paid so long as (I) each such Investee Company is and was a Pass-Through
Entity for such quarter, as provided in the Code or the Treasury
Regulations promulgated thereunder, (II) no Default or Event of Default
exists and is continuing or would thereby occur, (III) special tax
counsel to the Trust delivers to the Trustee, prior to the payment in
respect of such quarter, an opinion substantially in the form attached
to the Indentures regarding the classification of the Trust and each
such Investee Company as a Pass-Through Entity for federal income tax
purposes (or, if Larry J. Winget is disabled or unavailable as described
in the Venture Trust Instrument, such special tax counsel delivers to
the Trustee, prior to the payment in respect of such quarter, an opinion
substantially in the form attached to the Indentures), (IV) the Trust
has not received a private ruling or a National Office Technical Advice
Memorandum from the Internal Revenue Service or, in respect of
distributions made for state income tax purposes, a similar ruling from
any applicable state or local taxing authority, that the Trust is not a
Pass-Through Entity, or there has been a final "determination" (as used
in Section 1313 of the Code) or similar state determination to the same
effect, and (V) the Trust and its Investee Companies have complied with
the terms of clauses (b), (c) and (d) below. The amount that is
distributable pursuant to this clause (5)(a) by each Investee Company
which is a Pass-Through Entity in respect of each of the quarters
described above shall be that proportion of the amount of the Trust Tax
Distribution for each such quarter which such Investee Company's Tax
Income for such quarter bears to the aggregate Tax Income of all the
Investee Companies which are Pass-Through Entities in such quarter. For
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purposes of the foregoing, "Tax Income" shall mean one-quarter of an
Investee Company's actual taxable income for the year prior to that with
respect to which the calculations described above are being made. For
purposes hereof, any references herein to the taxable income or loss of
a Pass-Through Entity that is disregarded as an entity separate from its
owner for tax purposes shall mean the taxable income or loss of such
Pass-Through Entity as if it was a pass-through corporation which was
not disregarded as a separate entity for tax purposes; and
(2) no later than September 15 of each year, the Trust shall cause
its tax advisors, which shall be a nationally recognized accounting
firm, to determine the actual amount of federal and state income tax
liability of each Beneficiary of the Trust for the previous calendar
year computed as if the only income and loss of each such Beneficiary in
such year was an amount equal to the sum of the taxable income and loss
of the Investee Companies which are Pass-Through Entities (the "Actual
Tax Amount"). If (A) the Actual Tax Amount, as determined by such tax
advisor, is less than the aggregate estimated amounts paid pursuant to
clause (1) above in respect of such year (the "Distributed Amounts")
and/or (B) if the Actual Tax Amount is at any time finally determined by
the Internal Revenue Service or a court of competent jurisdiction to be
less than that determined by such tax advisors, the Trust shall cause
the Beneficiary(ies) of the Trust, within 75 days after such difference
is determined, to reimburse to the Trust, with no obligation on the part
of the Trust to each such Beneficiary with respect to such
reimbursement, the excess of the Distributed Amounts over the Actual Tax
Amount, as finally determined by the tax advisors, the Internal Revenue
Service or court of competent jurisdiction, as the case may be, or the
excess of the Actual Tax Amount, as determined by the tax advisors, over
the Actual Tax Amount as determined by the Internal Revenue Service or
court, as the case may be (in either case, which excess amount may be
offset by any amounts then or subsequently owed to each such Beneficiary
by reason of clause (1) above). If the excess of the Distributed Amounts
over the Actual Tax Amount, as finally determined by the tax advisors,
is reimbursed to the Trust after June 14 of such year, such excess shall
bear interest from June 15 to the date preceding the date it is paid to
the Trust at an interest rate equal to the overpayment rate established
under Section 6621(a)(1) of the Code or its successor and supplements.
If the Actual Tax Amount, as determined by the tax advisors, the
Internal Revenue Service or court, as the case may be, is greater than
the Distributed Amounts, each of the Investee Companies which are
Pass-Through Entities shall distribute to the Trust (and the Trust shall
then distribute to its Beneficiary(ies)) its share of the excess of the
Actual Amount over the Distributed Amounts, within 75 days after such
difference is determined. If any payment is made (i) in contravention of
clause (1) above and paid to the Beneficiary(ies) of the Trust pursuant
to this clause(5)(a) or (ii) in contravention of the limitations
contained in the immediately preceding sentence and paid to the
Beneficiary(ies) of the Trust pursuant to the immediately preceding
sentence, the Trust shall cause the Beneficiary(ies) of the Trust to
reimburse to each of the Investee Companies making such prohibited
payment the amount of such prohibited payment;
(b) in the event of the death, disability or unavailability of Larry
J. Winget as provided in the Venture Trust Instrument (such date, a
"Commencement Date"), the Trust shall notify the Trustee of the occurrence
of such Commencement Date no later than 10 days following such date and
shall apply for a private ruling from the Internal Revenue Service to the
effect that (1) each of the Investee Companies which was a Pass-Through
Entity immediately prior to such death, disability or unavailability, as
the case may be, qualifies, despite such death, disability or
unavailability, as a Pass-Through Entity and (2) the Trust qualifies as a
Pass-Through Entity;
(c) if at any time the Trust or an Investee Company receives
notification from the Internal Revenue Service that any Investee Company
does not qualify as a Pass-Through Entity (x) no further distributions
shall be made pursuant to clause (a)(1) above by such Investee Company,
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and (y) the Trust shall cause the Beneficiary(ies) of the Trust either (A)
to reimburse the Trust all amounts paid by that Investee Company pursuant
to clause (a)(1) and clause (a)(2) above with respect to all periods as to
which that Investee Company did not qualify as a Pass-Through Entity, with
no obligation on the part of the Trust to any such Beneficiary with respect
to such reimbursement, and the Trust shall then pay such reimbursement to
that Investee Company, or (B) to reimburse such Investee Company such
payments directly, within 75 days after such requirement for reimbursement
is determined; provided that no such reimbursement shall be required to the
extent to which such distribution would otherwise have been permitted,
after taking into account interest, penalties and additions to tax imposed
on such Investee Company as a result of its failure to qualify as a
Pass-Through Entity. If the Trust or any Investee Company at any time
receives notification from the Internal Revenue Service that the Trust is
not a Pass-Through Entity or if the Trust or the Investee Companies fail to
receive a favorable response to a ruling request described in clause (b)
within 360 days after the Commencement Date with respect to the status of
the Trust or any Investee Company as a Pass-Through Entity (in either the
case of a notification or a response to a ruling request, the
"Entity-in-Issue") the Trust shall, and shall cause its Beneficiaries to,
take the actions described in clauses (x) and (y) of the preceding sentence
with respect to the Entity-in-Issue (unless such Internal Revenue Service
response indicates that the Internal Revenue Service is not ruling as to
those issues and the Trust has obtained a favorable opinion of independent
tax counsel that the Entity-in-Issue is a Pass-Through Entity); and
(d) no Trust Tax Distribution may be made to the extent such
distribution would cause the aggregate cumulative amount of Trust Tax
Distributions to exceed the aggregate cumulative Tax Distribution Amounts
for periods completed after the Issue Date; and
(6) In the case of the New Senior Note Indenture, repurchases of
subordinated Indebtedness with the proceeds of Asset Sales to the extent
that (a) such proceeds have been offered to Holders of the New Senior Notes
pursuant to an Asset Sale Offer, (b) such Holders declined to participate
in such Asset Sale Offer and (c) the Trust is required to offer to
repurchase or redeem such subordinated Indebtedness with such Asset Sale
proceeds.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued to or by the Trust or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant shall be determined by the relevant Fairness Committee whose resolution
with respect thereto shall be delivered to the Trustee. The Fairness Committee's
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Trust shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this "Restricted Payments"
covenant were computed, together with a copy of any fairness opinion or
appraisal required by the Indentures.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Trust will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of Preferred Stock; provided,
however, that the Trust may incur Indebtedness (including Acquired Debt) and
issue Disqualified Stock, and the Trust and the Guarantors may incur
Indebtedness and issue Preferred Stock and any other Restricted Subsidiary may
incur Acquired Debt, if the Fixed Charge Coverage Ratio for the Trust's most
recently ended four full fiscal quarters
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for which financial statements are publicly available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or Preferred Stock is issued would have been at least 2.0 to 1, determined
on a Pro Forma Basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred or the Preferred
Stock or Disqualified Stock had been issued, as the case may be, at the
beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Trust and/or one or more Restricted
Subsidiaries of additional Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time outstanding
under this clause (1) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Trust and
the Restricted Subsidiaries, without duplication, thereunder) not to exceed
$625.0 million less (x) the aggregate principal amount of Receivables Debt
outstanding under clause (2) below and (y) the aggregate amount of all Net
Proceeds of Asset Sales applied by the Trust or any of its Restricted
Subsidiaries to repay any Indebtedness under a Credit Facility or
Receivables Debt under Receivables Facilities and effect a corresponding
commitment reduction thereunder pursuant to the covenant described under
the caption "-- Repurchase at the Option of Holders -- Asset Sales;"
provided, that Restricted Subsidiaries that are not Guarantors shall not
directly or indirectly incur Indebtedness and letters of credit in an
aggregate principal amount outstanding under this clause (1) in excess of
$50.0 million; provided, further, that the aggregate principal amount of
Indebtedness, letters of credit and Receivables Debt under Receivables
Facilities which may be incurred under this clause (1) and clause (2) below
shall not be reduced below $100.0 million in the aggregate at any one time
outstanding by reason of subclause (y) above and subclause (y) of clause
(2) below;
(2) the incurrence by Receivables Subsidiaries of Receivables Debt
under Receivables Facilities in an aggregate principal amount at any time
outstanding pursuant to this clause (2) not to exceed $625 million less (x)
the aggregate principal amount of Indebtedness and letters of credit
(determined as described in clause (1) above) outstanding under clause (1)
above and (y) the aggregate amount of all Net Proceeds of Asset Sales
applied to reduce commitments with respect to Receivables Debt or
Indebtedness under a Credit Facility pursuant to the covenant described
above under the caption "-- Repurchase at the Option of Holders -- Asset
Sales;" provided, that the aggregate principal amount of Indebtedness,
letters of credit and Receivable Debt under Receivables Facilities which
may be incurred pursuant to this clause (2) and clause (1) above shall not
be reduced below $100.0 million in the aggregate at any one time
outstanding by reason of subclause (y) above and subclause (y) of clause
(1) above;
(3) the incurrence by the Trust and its Restricted Subsidiaries of the
Existing Indebtedness;
(4) the incurrence by the Trust and the Guarantors of Indebtedness
represented by the Notes to be issued on the Issue Date and the related
Subsidiary Guarantees and the New Notes (as defined in the Registration
Rights Agreement) to be issued pursuant to the Registration Rights
Agreement and the related Subsidiary Guarantees;
(5) the incurrence by the Trust or any of its Restricted Subsidiaries
of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of the Trust or such Subsidiary, in an aggregate principal amount,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause (5),
not to exceed $50.0 million at any time outstanding;
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(6) (a) the incurrence by the Trust or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by the applicable
Indenture to be incurred under the first paragraph of this covenant or
clauses (3), (4), (5), (6), or (14) of this paragraph and (b) the
incurrence by the Trust or any of its Restricted Subsidiaries of Permitted
Preferred Stock in exchange for, or the net proceeds of which are used to
refund, refinance or replace Preferred Stock (other than intercompany
Preferred Stock) that was permitted by the applicable Indenture to be
incurred under the first paragraph of this covenant;
(7) the incurrence by the Trust or any of its Restricted Subsidiaries
of intercompany Indebtedness or Preferred Stock between or among the Trust
and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Trust or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Trust, or the Subsidiary Guarantee, in the
case of a Guarantor; and
(b)(i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness or Preferred Stock being held by a
Person other than the Trust or a Restricted Subsidiary thereof and (ii)
any sale or other transfer of any such Indebtedness or Preferred Stock
to a Person that is not either the Trust or a Restricted Subsidiary
thereof; shall be deemed, in each case, to constitute an incurrence of
such Indebtedness or Preferred Stock by the Trust or such Restricted
Subsidiary, as the case may be, that was not permitted by this clause
(7);
(8) the incurrence by the Trust or any of its Restricted Subsidiaries
of Hedging Obligations that are incurred solely for the purpose of (a)
fixing or hedging interest rate risk with respect to any Indebtedness that
is permitted by the terms of this Indenture to be outstanding or (b)
hedging currency or commodity risks of the Trust and its Restricted
Subsidiaries incurred by the Trust or such Restricted Subsidiaries in the
ordinary course of their business;
(9) the guarantee by the Trust or any of the Guarantors of
Indebtedness of the Trust or a Guarantor that was permitted to be incurred
by another provision of this covenant;
(10) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount thereof is included
in Fixed Charges of the Trust as accrued;
(11) Indebtedness of the Trust or any Restricted Subsidiary
represented by performance bonds and letters of credit for the account of
the Trust or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims and payment obligations
in connection with self-insurance, in each case, that are incurred in the
ordinary course of business in accordance with customary industry practice
in amounts, and for the purposes, customary in the Trust's industry;
(12) Indebtedness of the Trust or any Restricted Subsidiary arising
from agreements providing for indemnification, adjustment of purchase price
or similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing such
acquisition; provided that the maximum aggregate liability in respect of
all such Indebtedness shall at no time exceed the gross
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proceeds actually received or to be received by the Trust and the
Restricted Subsidiary in connection with such dispositions;
(13) Indebtedness of the Trust or any Restricted Subsidiary solely in
respect of bankers acceptances, and appeal bonds (to the extent that any
such incurrence does not result in the incurrence of any obligation to
repay any obligation relating to borrowed money of others), all in the
ordinary course of business in accordance with customary industry
practices, in amounts and for the purposes customary in the Trust's
industry; provided that the aggregate principal amount outstanding of such
Indebtedness (including any Indebtedness issued to refinance, refund or
replace such Indebtedness) shall at no time exceed $5.0 million;
(14) the incurrence by any Restricted Subsidiary that is not a
Guarantor of Indebtedness in accordance with the provisions described below
under the caption "-- Limitation on Foreign Indebtedness;"
(15) the guarantee by any Restricted Subsidiary that is not a
Guarantor of Indebtedness of a Restricted Subsidiary that is not a
Guarantor that was permitted to be incurred under the Indenture; and
(16) the incurrence by the Trust or any of the Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (16), not to exceed $35.0
million.
With respect to the New Senior Notes, the Trust will not, and will not
permit any of its Restricted Subsidiaries to, incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to any
other Indebtedness of the Trust or such Restricted Subsidiaries unless such
Indebtedness is also contractually subordinated in right of payment to the New
Senior Notes on substantially identical terms; provided, however, that no
Indebtedness of the Trust or its Restricted Subsidiaries shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Trust or its Restricted Subsidiaries solely by virtue of being unsecured.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Trust will be permitted to classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this covenant. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under the Indentures shall be deemed to have been incurred on such
date in reliance on the exception provided by clause (1) of the definition of
Permitted Debt.
LIMITATION ON FOREIGN INDEBTEDNESS
The Trust will not permit any Restricted Subsidiary of the Trust that is
not a Guarantor to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) other than Permitted Debt unless:
(1) after giving effect to the incurrence of such Indebtedness and the
receipt of the application of the proceeds thereof:
(a) if, as a result of the incurrence of such Indebtedness such
Restricted Subsidiary will become subject to any restriction or
limitation on the payment of dividends or the making of other
distributions,
(i) the Fixed Charge Coverage Ratio of Restricted Subsidiaries
that are not Guarantors (determined on a Pro Forma Basis for the last
four fiscal quarters for which financial statements are available at
the date of determination) is greater than 2.75 to 1; and
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(ii) the Trust's Fixed Charge Coverage Ratio (determined on a
pro forma basis for the last four fiscal quarters of the Trust for
which financial statements are available at the date of
determination) is greater than 2.0 to 1; or
(b) in any other case, the Trust's Fixed Charge Coverage Ratio
(determined on a Pro Forma Basis for the last four fiscal quarters of
the Trust for which financial statements are available at the date of
determination) is greater than 2.0 to 1; and
(2) no Default or Event of Default shall have occurred and be
continuing a the time or as a consequence of the incurrence of such
Indebtedness.
In the event that any Indebtedness incurred pursuant to clause (1)(b) of
the foregoing paragraph is proposed to be amended, modified or otherwise
supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Trust will not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred pursuant
to the terms of clause (1)(a) of the foregoing paragraph.
In calculating the Fixed Charge Coverage Ratio of the Restricted
Subsidiaries that are not Guarantors, Fixed Charges with respect to Indebtedness
that is solely owed to and held by the Trust or a Restricted Subsidiary shall be
excluded.
All calculations required under the prior two paragraphs hereof shall be
made in a manner consistent with the calculations required under the covenant
described under "-- Incurrence of Indebtedness and Issuance of Preferred Stock."
LIENS
New Senior Subordinated Notes
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind securing Indebtedness or trade payables on any asset now owned or
hereafter acquired, except Permitted Liens, unless the Trust or the Guarantors
provide, and cause their Restricted Subsidiaries to provide, concurrently
therewith, that the New Senior Subordinated Notes are equally and ratably
secured.
New Senior Notes
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind securing Indebtedness or trade payables on any asset now owned or
hereafter acquired, except Permitted Liens, unless the Trust or the Guarantors
provide, and cause their Restricted Subsidiaries to provide, concurrently
therewith, that the New Senior Notes are equally and ratably secured.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to the Trust or any of its Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Trust or any of its Restricted Subsidiaries;
(2) make loans or advances to the Trust or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Trust or any of
its Restricted Subsidiaries.
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However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the Issue Date and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive, taken as
a whole, with respect to such dividend and other payment restrictions than
those contained in such Existing Indebtedness, as in effect on the Issue
Date;
(2) Credit Facilities, provided that such Credit Facilities are no
more restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in the Credit Agreement as in
effect on the Issue Date;
(3) the Indentures, the Notes and the Subsidiary Guarantees;
(4) applicable law;
(5) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Trust or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the
Indentures to be incurred;
(6) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of
the nature described in clause (3) of the preceding paragraph;
(8) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(9) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(10) Liens securing Indebtedness that limit the right of the debtor to
dispose of the assets subject to such Lien;
(11) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
and
(13) Indebtedness or other contractual requirements of a Receivables
Subsidiary in connection with a Qualified Receivables Transaction, provided
that such restrictions apply only to such Receivables Subsidiary; and
(14) Indebtedness incurred by a Restricted Subsidiary that is not a
Guarantor in compliance with the provisions set forth under the caption
"-- Limitation on Foreign Indebtedness."
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MERGER, CONSOLIDATION OR SALE OF ASSETS
The Trust
The Trust may not, directly or indirectly: (1) consolidate or merge with or
into another Person (whether or not the Trust is the surviving entity); or (2)
sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Trust (computed on a consolidated basis), in
one or more related transactions, to another Person; unless:
(1) either: (a) the Trust is the continuing entity; or (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Trust) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is organized or existing under the laws of
the United States, any state thereof or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Trust) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of the Trust under the Notes, the Indentures and the
Registration Rights Agreements pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) the Trust or the Person formed by or surviving any such
consolidation or merger (if other than the Trust), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made:
(a) will have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the
Trust immediately preceding the transaction; and
(b) will, on the date of such transaction after giving Pro Forma
Effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable Reference Period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
the covenant described above under the caption "-- Incurrence of
Indebtedness and Issuance of Preferred Stock."
The foregoing clause (4) will not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Trust and any of
the Guarantors.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Trust's interest in which constitutes all or
substantially all of the properties and assets of the Trust shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Trust.
Notwithstanding anything contained in the Indentures to the contrary, the
Trust is permitted to contribute or otherwise transfer all of the Equity
Interests of the Subsidiaries then held by the Trust (other than the Equity
Interests of the Subsidiary which is to receive such contribution from the
Trust) to Venture Holdings Corporation or other successor to the Trust (a "Trust
Contribution"), provided that (A) any successor or surviving entity is organized
and existing under the laws of the United States, any state thereof or the
District of Columbia, (B) such contribution or reorganization is not materially
adverse to Holders of the Notes; it being understood, however, that such
contribution or reorganization shall not be considered materially adverse to
Holders of the Notes solely because the successor or surviving entity is subject
to income taxation as a corporate entity, (C) immediately after giving effect to
such transaction, no Default or Event of Default exists, (D) the actions
comprising such contribution or reorganization (e.g., the contribution of
Capital Stock of the Subsidiaries, or the issuance of Capital Stock of the
entity in exchange for assets of or Equity Interests in the Trust or in exchange
for stock of an entity holding such Equity Interests, or the merger or
consolidation of such entities) will not themselves directly result in material
income tax liability to the successor or surviving entity, (E) the successor or
surviving entity has assumed all
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obligations of the Trust, pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, under the Notes and the Indentures and
(F) Holders of the Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such contribution or reorganization and will
be subject to federal income tax with respect to the Notes on the same amounts,
in the same manner, and at the same time as would have been the case if such
contribution or reorganization had not occurred. If the successor or surviving
entity after a Trust Contribution is not a Pass-Through Entity, the Trust's
ability to make Trust Tax Distributions must terminate prior to such
contribution or reorganization (except with respect to Trust Tax Distributions
in respect of taxable periods ending on or prior to the date such contribution
or reorganization is effective for relevant tax purposes), other than Trust Tax
Distributions in respect of Beneficiaries' income tax liability that results
from the actions comprising such contribution or reorganization. The Trust shall
deliver to the Trustee prior to such contribution or reorganization an Officers'
Certificate covering clauses (A) through (F) and the preceding sentence of this
paragraph, stating that such contribution or reorganization and such
supplemental indenture comply with the Indentures, and an opinion of counsel
covering clauses (A), (D), (E) and (F) above and the preceding sentence of this
paragraph.
Guarantors
A Guarantor may not consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another Person, other than the Trust or
another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) either: (a) the Person formed by or surviving any such
consolidation or merger assumes all the obligations of that Guarantor under
the Indentures, its Subsidiary Guarantee and the Registration Rights
Agreement, pursuant to a supplemental indenture satisfactory to the Trustee
or (b) the Net Proceeds of such sale or other disposition are applied in
accordance with the "Asset Sale" provisions of the applicable Indenture.
The Subsidiary Guarantee of a Guarantor will be released from its
obligations under the Subsidiary Guarantee:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the Trust, if the
Guarantor applies the Net Proceeds of that sale or other disposition are
applied in accordance with the "Asset Sale" provisions of the Indentures;
or
(2) in connection with any sale of all of the Capital Stock of that
Guarantor to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of the Trust, if the Guarantor applies the
Net Proceeds of that sale in accordance with the "Asset Sale" provisions of
the Indentures; or
(3) if the Trust properly designates that Guarantor as an Unrestricted
Subsidiary;
provided, however, that any such termination shall occur only to the extent that
all obligations of such Guarantor under all of its guarantees of, and under all
of its pledges of assets or other security interests which secure, any
Indebtedness of the Trust, the Guarantors or any other Restricted Subsidiary
shall also terminate upon such sale, disposition or designation.
See "-- Repurchase at the Option of Holders -- Asset Sales."
TRANSACTIONS WITH AFFILIATES
The Trust will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement,
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understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable
to the Trust or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Trust or such
Restricted Subsidiary with an unrelated Person; and
(2) the Trust delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, a resolution of the Board of Directors of the Trust or
such Restricted Subsidiary, as the case may be (or a resolution of the
Board of Directors of the Trust in the case of Venture Canada) and a
resolution of the Independent members of the Fairness Committee of the
Trust or Restricted Subsidiary (or a resolution of the Independent
members of the Fairness Committee of the Trust in the case of Venture
Canada), set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this covenant; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal, investment banking firm or other qualified
independent financial advisor of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) any transaction with officers or directors of the Trust or any
Restricted Subsidiary in the ordinary course of business and consistent
with the past practice of the Trust or such Restricted Subsidiary;
(2) transactions between or among the Trust and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Trust;
(4) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Trust;
(5) Restricted Payments that are permitted by the provisions of the
Indentures described above under the caption "-- Restricted Payments";
(6) performance of all agreements in existence on the Issue Date and
any modification thereto or any transaction contemplated thereby (including
pursuant to any modification thereto) in any replacement agreement therefor
so long as such modification or replacement is not more disadvantageous to
the Holders in any material respect than the original agreement as in
effect on the Issue Date; and
(7) transactions between a Receivables Subsidiary and any Person in
which the Receivables Subsidiary has an Investment.
The Trust and each of its Restricted Subsidiaries (other than Venture
Canada) shall have or will establish and maintain a Fairness Committee, at least
one of whose members shall be Independent.
ADDITIONAL GUARANTORS
All future domestic Restricted Subsidiaries (other than Receivables
Subsidiaries) shall become Guarantors of the Notes. In addition, the Trust will
not permit any of its Restricted Subsidiaries, directly or indirectly, to
Guarantee or pledge any assets to secure the payment of any other Indebtedness
of the Trust or any Guarantor unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture providing for the Guarantee of
the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be
senior to or pari passu with such Restricted Subsidiary's Guarantee of or pledge
to secure such other Indebtedness unless, with respect
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only to the New Senior Subordinated Notes, such other Indebtedness is Senior
Debt, in which case the Guarantee of the New Senior Subordinated Notes may be
subordinated to the Guarantee of such Senior Debt to the same extent as the New
Senior Subordinated Notes are subordinated to such Senior Debt.
Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the
Notes will provide by its terms that it will be automatically and
unconditionally released and discharged under the circumstances described above
under the caption "-- Merger, Consolidation or Sale of Assets -- Guarantors."
Forms of the Subsidiary Guarantees will be attached as exhibits to the
Indentures.
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors of the Trust may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments (without duplication)
owned by the Trust and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be an Investment made as of the time of such
designation and will either reduce the amount available for Restricted Payments
under the first paragraph of the covenant described above under the caption
"-- Restricted Payments" or reduce the amount available for future Investments
under one or more clauses of the definition of Permitted Investments, as the
Trust shall determine. That designation will only be permitted if such
Investment would be permitted at that time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary if the redesignation would not cause a Default.
BUSINESS ACTIVITIES
The Trust will not, and will not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Trust and its Restricted Subsidiaries taken as a
whole.
PAYMENTS FOR CONSENT
The Trust will not, and will not permit any of their Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of the Indentures or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
LIMITATION ON AMENDMENTS TO AGREEMENTS
So long as the Trust is Venture Holdings Trust and is an obligor under the
Indentures, (i) the Trust shall not engage in any business activity except for
agreements related to its outstanding indebtedness; (ii) the Trust shall not own
any property other than (A) the stock or membership interest of its
subsidiaries, (B) insurance on the life of the Beneficiary, or (C) amounts
allowed to be distributed by it under the terms of its outstanding indebtedness
or required to be used by the Trust to service such outstanding indebtedness and
its other obligations incurred in the ordinary course in accordance with past
practice; and (iii) the Venture Trust Instrument shall not be amended, modified
or changed in any manner except that the Trust may make amendments,
modifications or changes which individually or in the aggregate are not adverse
to the interests of the Holders of the Notes. Without limiting the foregoing,
amendments to the Venture Trust Instrument reasonably necessary to conform to
the requirements of Section 1361(c)(2), 1361(d) or 1361(e) of the Code, or their
successors or supplements, shall not be deemed adverse to the interests of the
Holders of the Notes.
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The Trust will not amend, modify or in any way alter the Corporate Opportunity
Agreement in any manner adverse to the Trust or any of its Restricted
Subsidiaries.
ANTI-LAYERING
With respect only to the New Senior Subordinated Notes, the Trust and the
Guarantors will not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
any Senior Debt and senior in any respect in right of payment to the New Senior
Subordinated Notes, and no Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Senior Debt and senior in any respect in right
of payment to its Subsidiary Guarantee of the New Senior Subordinated Notes;
provided, however, that no Indebtedness of the Trust or its Restricted
Subsidiaries shall be deemed to be subordinated or junior in right of payment to
any other Indebtedness of the Trust or its Restricted Subsidiaries solely by
virtue of being unsecured.
CORPORATE OPPORTUNITIES
Larry J. Winget will agree pursuant to the Corporate Opportunity Agreement
for the benefit of the Holders of the Notes that if any corporate opportunity,
business opportunity, proposed transaction, acquisition, disposition,
participation, interest, or other opportunity to acquire an interest in any
business or prospect in the same business or in any business reasonably related
to the business of the Trust or any of its Subsidiaries or in any machinery or
equipment useful in the business of the Trust or any of its Subsidiaries (a
"Business Opportunity") comes to his attention or shall be made available to him
or any of his Affiliates, a complete and accurate description of such Business
Opportunity, including all of the terms and conditions thereof and the identity
of all other Persons involved in the Business Opportunity, shall be promptly
presented in writing to the Board of Directors of each of the Trust and each
Guarantor and the Fairness Committee of the Trust and each Guarantor and the
Trust and each Guarantor shall be entitled to pursue and take advantage of such
Business Opportunity, either directly or through a wholly owned Restricted
Subsidiary, and Larry J. Winget shall not, nor shall any of his Affiliates
(other than the Trust or any wholly owned Restricted Subsidiary of the Trust),
pursue or take advantage of a Business Opportunity unless majorities of the
Board of Directors of the Trust and each Guarantor and the Fairness Committee of
the Trust and each Guarantor (including majorities of the Trust's and each
Guarantor's disinterested directors, if any, and Independent members of the
Fairness Committee) have determined that it is not in the interests of the Trust
or such Guarantor to pursue or take advantage of such Business Opportunity.
Notwithstanding the foregoing, Business Opportunities (1) relating to the
purchase of machinery and equipment or real estate and not constituting a
business within the meaning of Section 11.01 (d) of Regulation S-X of the
Commission or (2) relating to the sale of goods and services by an Affiliate in
the ordinary course of business as conducted as of the Issue Date shall not be
subject to the Corporate Opportunity Agreement.
REPORTS
Whether or not required by the Commission, so long as any Notes are
outstanding, the Trust will furnish to the Holders of Notes, within 15 days
after the time periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Trust were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on
the annual financial statements by the Trust's certified independent
accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Trust were required to file such reports.
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In addition, whether or not required by the Commission, the Trust will file
a copy of all of the information and reports referred to in clauses (1) and (2)
above with the Commission for public availability within the time periods
specified in the Commission's rules and regulations (unless the Commission will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, the Trust and the
Subsidiary Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
If the Trust has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Trust
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Trust.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default under an Indenture:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes issued under such Indenture,
and with respect to the New Senior Subordinated Notes, whether or not such
payment was prohibited by the subordination provisions of the Indenture
governing the New Senior Subordinated Notes;
(2) default in payment when due of the principal of, or premium, if
any, on the Notes issued under such Indenture, when the same becomes due
and payable at maturity, redemption, by acceleration or otherwise, and with
respect to the New Senior Subordinated Notes, whether or not such payment
was prohibited by the subordination provisions of the Indenture governing
the New Senior Subordinated Notes;
(3) failure by the Trust or any of its Restricted Subsidiaries to
comply with the provisions described under the captions "-- Repurchase at
the Option of Holders -- Change of Control" or "-- Repurchase at the Option
of Holders -- Asset Sales;"
(4) failure by the Trust or any of its Restricted Subsidiaries for 60
days after notice from the Trustee or Holders of 25% in aggregate principal
amount of the Notes issued under the applicable Indenture to comply with
any of the other agreements in the Indenture or by Larry J. Winget to
observe and perform any covenant or agreement contained in the Corporate
Opportunity Agreement;
(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness in an aggregate principal amount in excess of $15.0 million
for money borrowed by the Trust or any of its Restricted Subsidiaries (or
the payment of which is guaranteed by the Trust or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the Issue Date, if that default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $15.0 million or
more;
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(6) failure by the Trust or any of its Restricted Subsidiaries to pay
final judgments not covered by insurance aggregating in excess of $10.0
million, which judgments are not paid, bonded, discharged or stayed for a
period of 60 days; and
(7) except as permitted by the applicable Indenture, any Subsidiary
Guarantee issued thereunder shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and
(8) certain events of bankruptcy or insolvency with respect to the
Trust, Guarantors or any of their Significant Subsidiaries.
In the case of an Event of Default under an Indenture arising from certain
events of bankruptcy or insolvency with respect to the Trust, any Subsidiary
that is a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes
issued thereunder will become due and payable immediately without further action
or notice. If any other Event of Default under an Indenture occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes issued thereunder may declare all the Notes to be due
and payable immediately.
Holders of the Notes may not enforce the applicable Indenture or the Notes
except as provided in the applicable Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding New Senior
Subordinated Notes or New Senior Notes may direct the applicable Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the New
Senior Subordinated Notes or New Senior Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages) if it determines that
withholding notice is in their interest.
The Holders of a majority in aggregate principal amount of the New Senior
Subordinated Notes or New Senior Notes then outstanding by notice to the
applicable Trustee may on behalf of the Holders of all of such Notes waive any
existing Default or Event of Default and its consequences under the applicable
Indenture except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, such Notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of the Trust with the
intention of avoiding payment of the premium that the Trust would have had to
pay if the Trust then had elected to redeem the New Senior Subordinated Notes or
New Senior Notes pursuant to the optional redemption provisions of the
applicable Indenture, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs prior to June 1, 2004 with respect to the
New Senior Subordinated Notes or prior to June 1, 2003 with respect to the New
Senior Notes, by reason of any willful action (or inaction) taken (or not taken)
by or on behalf of the Trust with the intention of avoiding the prohibition on
redemption of the New Senior Subordinated Notes or New Senior Notes prior to
such respective dates, then the premium specified in the applicable Indenture
shall also become immediately due and payable to the extent permitted by law
upon the acceleration of such Notes.
The Trust is required to deliver to the Trustee annually a statement
regarding compliance with the Indentures. Upon becoming aware of any Default or
Event of Default, the Trust is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator, stockholder, manager, member,
partner, trustee, beneficiary or special advisor or member of the successor
special advisor group of the Trust or any Guarantor, as such, shall have any
liability for any obligations of the Trust or the Guarantors under the Notes,
the Indentures, the Subsidiary Guarantees or for any claim based on, in respect
of, or by
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reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. The waiver may not be effective
to waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Trust may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes and all obligations
of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
below;
(2) the Trust's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost
or stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and the Trust's and the Guarantor's obligations in connection therewith;
and
(4) the Legal Defeasance provisions of the Indentures.
In addition, the Trust may, at its option and at any time, elect to have
the obligations of the Trust and the Guarantors released with respect to certain
covenants that are described in the Indentures ("Covenant Defeasance") and
thereafter any omission to comply with those covenants shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance under
an Indenture:
(1) the Trust must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the applicable Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, or
interest and premium and Liquidated Damages, if any, on the outstanding
Notes issued under such Indenture on the stated maturity or on the
applicable redemption date, as the case may be, and the Trust must specify
whether such Notes are being defeased to maturity or to a particular
redemption date;
(2) in the case of Legal Defeasance, the Trust shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the Trust has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the Issue
Date, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes issued under such
Indenture will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of Covenant Defeasance, the Trust shall have delivered
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
to the effect that the Holders of the outstanding Notes issued under such
Indenture 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;
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(4) no Default or Event of Default shall have occurred and be
continuing under such Indenture either: (a) on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit); or (b) or insofar as Events of
Default from bankruptcy or insolvency events are concerned, at any time in
the period ending on the 91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the relevant Indenture) to which the
Trust or any of its Subsidiaries is a party or by which the Trust or any of
its Subsidiaries is bound;
(6) the Trust must have delivered to the Trustee an Opinion of Counsel
(subject to customary exceptions) to the effect that, assuming no
intervening bankruptcy of the Trust or any Guarantor between the date of
deposit and the 91st day following the deposit and assuming that no Holder
is an "insider" of the Trust or a Guarantor under applicable bankruptcy
law, after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) the Trust must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Trust with the intent of
preferring the Holders of Notes over the other creditors of the Trust and
the Guarantors with the intent of defeating, hindering, delaying or
defrauding creditors of the Trust or Guarantors or others; and
(8) the Trust must deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel (with respect to legal conclusions only), each
stating that all conditions precedent relating to the Legal Defeasance or
the Covenant Defeasance have been complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, an Indenture or
the Notes issued thereunder may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of such Notes then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, such Notes), and any
existing default or compliance with any provision of an Indenture or the Notes
issued thereunder may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes issued thereunder (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, such Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to the covenants described above under the caption
"-- Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of the relevant Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of, or interest or premium or Liquidated
Damages, if any, on the Notes;
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(7) waive a redemption payment with respect to any Note (other than a
payment required by one of the covenants described above under the caption
"-- Repurchase at the Option of Holders");
(8) release any domestic Guarantor from any of its obligations under
its Subsidiary Guarantee or the applicable Indenture, except in accordance
with the terms of the Indentures; or
(9) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
Indentures relating to subordination that adversely affects the rights of the
Holders of the Notes will require the consent of the Holders of at least 75% in
aggregate principal amount of Senior Subordinated Notes then outstanding. The
release of any foreign Guarantor from any of its obligations under its
Subsidiary Guarantee with respect to an issue of Notes or the applicable
Indenture will require the consent of Holders of at least two-thirds of such
issue of Notes then outstanding.
Notwithstanding the preceding, without the consent of any Holder of Notes,
the Trust, the Guarantors and the Trustee may amend or supplement the Indentures
or the Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Trust's obligations to
Holders of Notes in the case of a merger or consolidation or sale of all or
substantially all of the Trust's assets;
(4) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights under the relevant Indenture of any such Holder;
(5) to add additional Guarantors; or
(6) to comply with requirements of the Commission in order to effect
or maintain the qualification of the relevant Indenture under the Trust
Indenture Act.
SATISFACTION AND DISCHARGE
Each Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated thereunder (except lost,
stolen or destroyed Notes that have been replaced or paid) have been
delivered to the Trustee for cancellation; or
(b) all Notes authenticated under the relevant Indenture that have
not been delivered to the Trustee for cancellation have become due and
payable by reason of the making of a notice of redemption or otherwise
or will become due and payable within one year and the Trust or any
Guarantor has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on such Notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if any, and
accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Trust or any
Guarantor is a party or by which the Trust or any Guarantor is bound;
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(3) the Trust or the Guarantors have paid or caused to be paid all
sums payable by them under the relevant Indenture; and
(4) the Trust has delivered irrevocable instructions to the Trustee
under the relevant Indenture to apply the deposited money toward the
payment of such Notes at maturity or the redemption date or upon delivery
for cancellation, as the case may be.
In addition, the Trust must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of the Trust or any Guarantor, the
Indentures limit its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, or apply to the Commission for permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur and be continuing and, subject to such direction, the Trustee will
be required, in the exercise of its power, to use the degree of care of a
prudent man in the conduct of his own affairs. Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indentures at the request of any Holder of Notes, unless such Holder
shall have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indentures and
Registration Rights Agreements without charge by writing to Venture Holdings
Trust, 33662 James J. Pompo Drive, P.O. Box 278, Fraser, Michigan 48026,
Attention: James E. Butler.
BOOK-ENTRY, DELIVERY AND FORM
The Outstanding Notes are and the Exchange Notes will be issued in
registered, global form in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof (the "Global Notes").
The Global Notes will be deposited on the date of the acceptance for
exchange of the Outstanding Notes and the issuance of the Exchange Notes with
the Trustee as custodian for The Depository Trust Company ("DTC"), in New York,
New York, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant in DTC as described
below.
Except as set forth below, the Global Notes may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for Notes
in certificated form except in the limited circumstances described below. See
"-- Exchange of Global Notes for Certificated Notes." Except in the limited
circumstances described below, owners of beneficial interests in the Global
Notes will not be entitled to receive physical delivery of Notes in certificated
form.
DEPOSITORY PROCEDURES
We are providing the following description of the operations and procedures
of DTC, the Euroclear System ("Euroclear") and Cedel, S.A. ("Cedel") solely as a
matter of convenience. These operations and procedures are solely within the
control of the respective settlement systems and are
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subject to changes by them. We take no responsibility for these operations and
procedures and urge you to contact the system or their participants directly to
discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers and
dealers (including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interests in, and transfers of ownership interests in, each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised us that, pursuant to procedures established by DTC:
(1) upon deposit of the Global Notes, DTC will credit the accounts of
Participants represented by the Global Notes with portions of the principal
amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on,
and the transfer of ownership thereof will be effected only through,
records maintained by DTC, with respect to the Participants, or by the
Participants and the Indirect Participants, with respect to other owners of
beneficial interest in the Global Notes.
Investors in the Global Notes who are Participants in DTC's system may hold
their interests therein directly through DTC. Investors in the Global Notes who
are not Participants may hold their interests therein indirectly through
organizations (including Euroclear and Cedel) which are Participants in such
system. All interests in a Global Note, including those held through Euroclear
or Cedel, may be subject to the procedures and requirements of DTC. Those
interests held through Euroclear or Cedel may also be subject to the procedures
and requirements of such systems. The laws of some states require that certain
Persons take physical delivery in definitive form of securities that they own.
Consequently, the ability to transfer beneficial interests in a Global Note to
such Persons will be limited to that extent. Because DTC can act only on behalf
of Participants, which in turn act on behalf of Indirect Participants, the
ability of a Person having beneficial interests in a Global Note to pledge such
interests to Persons that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTEREST IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
"HOLDERS" THEREOF UNDER THE INDENTURES FOR ANY PURPOSE.
We will make payments in respect of the principal of, and interest and
premium and Liquidated Damages, if any, on a Global Note registered in the name
of DTC or its nominee to DTC in its capacity as the registered Holder under the
Indentures. Under the terms of the Indentures, we, along with the Trustee, will
treat the Persons in whose names the Notes, including the Global Notes, are
registered as the owners thereof for the purpose of receiving payments and for
all other purposes. Consequently, neither we, the Trustee nor any agent of the
Issuer or Guarantors or the Trustee has or will have any responsibility or
liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interest in the Global Notes or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Notes; or
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(2) any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants.
DTC has advised us that its current practice, upon receipt of any payment
in respect of securities such as the Notes (including principal and interest),
is to credit the accounts of the relevant Participants with the payment on the
payment date unless DTC has reason to believe it will not receive payment on
such payment date. Each relevant Participant is credited with an amount
proportionate to its beneficial ownership of an interest in the principal amount
of the relevant security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of Notes
will be governed by standing instructions and customary practices and will be
the responsibility of the Participants or the Indirect Participants and will not
be the responsibility of DTC, the Trustee or the Issuer or Guarantors. Neither
the Issuer, Guarantors nor the Trustee will be liable for any delay by DTC or
any of its Participants in identifying the beneficial owners of the Notes. We
and the Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds, and transfers between
participants in Euroclear and Cedel will be effected in accordance with their
respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
Notes described herein, cross-market transfers between the Participants in DTC,
on the one hand, and Euroclear or Cedel participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear or
Cedel, as the case may be, by its respective depositary; however, such cross-
market transactions will require delivery of instructions to Euroclear or Cedel,
as the case may be, by the counterparty in such system in accordance with the
rules and procedures and within the established deadlines (Brussels time) of
such system. Euroclear or Cedel, as the case may be, will, if the transaction
meets its settlement requirements, deliver instructions to its respective
depositary to take action to effect final settlement on its behalf by delivering
or receiving interests in the relevant Global Note in DTC, and making or
receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Cedel participants may
not deliver instructions directly to the depositories for Euroclear or Cedel.
DTC has advised us that it will take any action permitted to be taken by a
Holder of Notes only at the direction of one or more Participants to whose
account DTC has credited the interests in the Global Notes and only in respect
of such portion of the aggregate principal amount of the Notes as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC reserves the right to exchange the
Global Notes for legended Notes in certificated form, and to distribute such
Notes to its Participants.
Although DTC, Euroclear and Cedel have agreed to the foregoing procedures
to facilitate transfers of interests in the Global Notes among participants in
DTC, Euroclear and Cedel, they are under no obligation to perform or to continue
to perform such procedures, and may discontinue such procedures at any time.
Neither the Issuer, Guarantors nor the Trustee nor any of their respective
agents will have any responsibility for the performance by DTC, Euroclear or
Cedel or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive Notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies us that it is unwilling or unable to continue as
depositary for the Global Notes and we fail to appoint a successor
depositary or (b) has ceased to be a clearing agency registered under the
Exchange Act;
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(2) we, at our option, notify the Trustee in writing that we elect to
cause the issuance of the Certificated Notes; or
(3) there shall have occurred and be continuing a Default or Event of
Default with respect to the Notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the Indentures. In all cases, Certificated
Notes delivered in exchange for any Global Note or beneficial interests in
Global Notes will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary, in accordance with
its customary procedures.
SAME DAY SETTLEMENT AND PAYMENT
We will make payments in respect of the Notes represented by the Global
Notes (including principal, premium, if any, interest and Liquidated Damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the Global Note Holder. We will make all payments of principal, interest and
premium and Liquidated Damages, if any, with respect to Certificated Notes held
by Holders of at least $1,000,000 in aggregate principal amount of Notes, by
wire transfer of immediately available funds to the accounts specified by the
Holders thereof or, if no such account is specified, by mailing a check to each
such Holder's registered address. The Notes represented by the Global Notes are
expected to be eligible to trade in the PORTAL market and to trade in DTC's
Same-Day Funds Settlement System, and any permitted secondary market trading
activity in such Notes will, therefore, be required by DTC to be settled in
immediately available funds. We expect that secondary trading in any
Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a Global Note from a Participant in
DTC will be credited, and any such crediting will be reported to the relevant
Euroclear or Cedel participant, during the securities settlement processing day
(which must be a business day for Euroclear and Cedel) immediately following the
settlement date of DTC. DTC has advised the Trust that cash received in
Euroclear or Cedel as a result of sales of interests in a Global Note by or
through a Euroclear or Cedel participant to a Participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or Cedel cash account only as of the business day for
Euroclear or Cedel following DTC's settlement date.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The following description is a summary of the material provisions of the
Registration Rights Agreement. It does not restate that agreement in its
entirety. We urge you to read the Registration Rights Agreement in its entirety
because it, and not this description, defines your registration rights as
Holders of the Outstanding Notes. See "-- Additional Information."
The Trust, Guarantors and the Initial Purchasers entered into the
Registration Rights Agreement on May 27, 1999 pursuant to which the Trust and
Guarantors agreed, for the benefit of the Holders of the Outstanding Notes, that
they would, at their cost, (1) within 90 days after May 27, 1999 file a
registration statement under the Securities Act, of which this Prospectus forms
a part, (an "Exchange Offer Registration Statement") with the Commission with
respect to a registered offer to exchange the Outstanding Notes for the Exchange
Notes with terms substantially identical in all material respects to the
Outstanding Notes (except that such Exchange Notes will not contain terms with
respect to transfer restrictions) and (2) use their best efforts to cause such
Exchange Offer Registration Statement to be declared effective under the
Securities Act within 150 days after May 27, 1999. Upon such Exchange Offer
Registration Statement being declared effective, the Trust will offer Exchange
Notes in exchange for properly tendered Outstanding Notes. The Trust will keep
the Exchange Offer open for not less than 20 Business Days (or longer if
required by applicable law) after the date notice of such Exchange Offer is
mailed to the Holders of the Outstanding Notes. For
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each Outstanding Note surrendered pursuant to such Exchange Offer, the Holder of
such Outstanding Note will receive the applicable Exchange Notes having a
principal amount equal to that of the surrendered Outstanding Note. Under
existing Commission interpretations, the Exchange Notes would in general be
freely transferable after the Exchange Offer without further registration under
the Securities Act; provided that in the case of broker-dealers a prospectus
meeting the requirements of the Securities Act must be delivered as required.
The Company has agreed for a period of at least 270 days after consummation of
the Exchange Offer to make available a prospectus meeting the requirements of
the Securities Act to any broker-dealer for use in connection with any resale of
any such Exchange Notes so acquired. A broker-dealer that delivers such a
prospectus to purchasers in connection with such resales will be subject to
certain of the civil liability provisions under the Securities Act and will be
bound by the provisions of the Registration Rights Agreement (including, without
limitation, certain indemnification and contribution rights and obligations).
Each Holder of the Outstanding Notes who wishes to exchange such
Outstanding Notes for Exchange Notes in the Exchange Offer will be required to
make certain representations, including representations that (1) any Exchange
Notes to be received by it will be acquired in the ordinary course of its
business, (2) it has no arrangement with any Person to participate in the
distribution of the Exchange Notes and (3) it is not an "affiliate," as defined
in Rule 405 of the Securities Act, of the Company or any of the Guarantors, or
if it is an affiliate of any of them, it will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
In addition, if the Holder is not a broker-dealer, it will be required to
represent that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Notes. If the Holder is a broker-dealer that will
receive Exchange Notes for its own account in exchange for the Outstanding Notes
that were acquired as a result of market-making activities or other trading
activities, it will be required to acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Notes.
In the event that applicable interpretations of the staff of the Commission
do not permit the Trust to effect such an Exchange Offer, or if for any other
reason the Exchange Offer is not consummated within 180 days of May 27, 1999,
the Trust will, at its own expense, (a) as promptly as practicable, file a shelf
registration statement covering resales of the Outstanding Notes (a "Shelf
Registration Statement"), (b) use their best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as practicable after the filing of such Shelf Registration Statement
and (c) use their best efforts to keep effective such Shelf Registration
Statement until the earlier of 24 months following May 27, 1999 and such time as
all of the Outstanding Notes have been sold thereunder, or otherwise cease to be
a Transfer Restricted Security (as defined in the Registration Rights
Agreement). The Trust will, in the event a Shelf Registration Statement is
required to be filed, provide to each Holder of the Outstanding Notes copies of
the prospectus which is a part of such Shelf Registration Statement, notify each
such Holder when such Shelf Registration Statement for the Outstanding Notes has
become effective and take certain other actions that are required to permit
unrestricted resales of the Outstanding Notes. A Holder of the Outstanding Notes
who sells such notes pursuant to the Shelf Registration Statement generally
would be required to be named as a selling security holder in the related
prospectus and to deliver a prospectus to purchasers, will be subject to certain
of the civil liability provisions under the Securities Act in connection with
such sales and will be bound by the provisions of the Registration Rights
Agreement which are applicable to such a Holder (including certain
indemnification and contribution rights and obligations).
If (a) neither of the registration statements described above is filed on
or before the 90th day following May 27, 1999, (b) neither of such registration
statements is declared effective by the Commission on or prior to the 150th day
after May 27, 1999 (the "Effectiveness Target Date"), (c) an Exchange Offer
Registration Statement becomes effective, and the Trust fails to consummate the
Exchange Offer within 45 days of the earlier of the effectiveness of such
registration statement or the Effectiveness Target Date, or (d) the Shelf
Registration Statement is declared effective but
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thereafter ceases to be effective or usable in connection with resales of
Outstanding Notes during the period specified in the Registration Rights
Agreement (each such event referred to in clauses (a) through (d) above a
"Registration Default"), then the Trust will pay to each Holder of the
Outstanding Notes, accruing from the date of the first such Registration Default
(or if such Registration Default has been cured, from the date of the next
Registration Default), liquidated damages ("Liquidated Damages") in an amount
equal to one-half of one percent (0.5%) per annum of the principal amount of the
Outstanding Notes held by such Holder during the first 90-day period immediately
following the occurrence of such Registration Default, increasing by an
additional one-half of one percent (0.5%) per annum of the principal amount of
such Outstanding Notes during each subsequent 90-day period, up to a maximum
amount of Liquidated Damages equal to two percent (2.0%) per annum of the
principal amount of such Outstanding Notes, which provision for Liquidated
Damages will continue until such Registration Default has been cured. Liquidated
Damages accrued as of any interest payment date will be payable on such date.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indentures. Reference
is made to the Indentures for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"1997 Senior Notes" means the 9 1/2% Senior Notes due 2005 issued under
that certain Indenture dated as of July 1, 1997 among the Trust and certain of
the Guarantors and the Huntington National Bank, as Trustee, as the same may be
amended from time-to-time.
"Acquisition" means the purchase or other acquisition of any Person or
substantially all the assets of any Person or line of business of such Person by
any other Person, whether by purchase, merger, consolidation, or other transfer,
and whether or not for consideration.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness or Disqualified Stock of any other Person existing at
the time such other Person is merged with or into or became a Restricted
Subsidiary of such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Restricted Subsidiary of, such
specified Person; provided, however, that Indebtedness of such Person that
is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transaction by which such Person
becomes or merges with or into the Trust or a Subsidiary of the Trust shall
not be Acquired Debt; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person, provided, however, that any such Indebtedness that
is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transaction by which such asset is
acquired shall not be Acquired Debt.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings. No Person in whom a Receivables
Subsidiary makes an Investment in connection with a Qualified Receivables
Transaction will be deemed to be an Affiliate of the Trust or any of its
Subsidiaries solely by reason of such Investment.
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"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of inventory in the ordinary course of business
consistent with either past practices or accepted business practices in the
industry; provided that the sale, conveyance or other disposition of all or
substantially all of the assets of the Trust and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of the
Indentures described above under the caption "-- Repurchase at the Option
of Holders -- Change of Control" and/or the provisions described above
under the caption "-- Certain Covenants -- Merger, Consolidation or Sale of
Assets" and not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests in any of the Trust's Restricted
Subsidiaries or the sale of Equity Interests in any of their Restricted
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(2) a transfer of assets between or among the Trust and its Restricted
Subsidiaries;
(3) an issuance or transfer of Equity Interests by a Restricted
Subsidiary to the Trust or to another Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of equipment,
inventory, accounts receivable or other assets (including, without
limitation, the sale, lease, conveyance or other disposition of damaged,
worn-out or other obsolete property if such property is no longer necessary
for the proper conduct of the business of the Trust or such Restricted
Subsidiary) in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments;"
(7) sales of Receivables to a Receivables Subsidiary for the fair
market value thereof, including cash in an amount at least equal to 80% of
the book value thereof as determined in accordance with GAAP, it being
understood that, for the purposes of this clause (7), notes received in
exchange for the transfer of Receivables will be deemed cash if the
Receivables Subsidiary or other payor is required to repay said notes as
soon as practicable from available cash collections less amounts required
to be established as reserves pursuant to contractual agreements with
entities that are not Affiliates of the Trust or any of the Guarantors
entered into as part of a Qualified Receivables Transaction; and
(8) transfers of Receivables (or a fractional undivided interest
therein) by a Receivables Subsidiary in connection with a Qualified
Receivables Transaction.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Beneficiary" means (i) any beneficiary of the Trust while it is a trust or
(ii) any holders of the Equity Interests of a successor entity to the Trust;
provided, that for any tax calculation or tax distribution herein, a Beneficiary
shall be any Person ultimately liable for the payment of taxes with respect to
the Trust's income.
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"Board of Directors" means:
(1) either the board of directors, general partners or managers of the
Trust's Subsidiaries, or any duly authorized committee thereof; or
(2) in the case of the Trust, the Special Advisor of the Trust;
provided that (a) in the event the Special Advisor's rights, duties and
powers are assumed by the Successor Special Advisor Group, "Board of
Directors" means the Successor Special Advisor Group of the Trust and (b)
in the case of a successor entity to Venture Holdings Trust, "Board of
Directors" means the board of directors, general partners or managers of
the successor entity.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation (other than non-voting
non-convertible Indebtedness) that confers on a Person the right to receive
a share of the profits and losses of, or distributions of assets of, the
issuing Person, including, without limitation, the beneficial interests of
a trust.
"Cash Equivalents" means:
(1) cash;
(2) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof);
(3) time deposits and certificates of deposit and commercial paper
issued by the parent corporation of any domestic commercial bank of
recognized standing having capital and surplus in excess of $250 million;
(4) commercial paper issued by others rated at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc.;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (3)
above;
(6) any money market deposit accounts including those of the Trustee
issued or offered by a domestic commercial bank having capital and surplus
in excess of $250 million;
(7) investments in money market funds which invest substantially all
their assets in securities of the type described in clauses (1), (2), (3)
and (4) above and in the case of (1), (2) and (3) maturing within one year
after the date of acquisition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Trust and its Restricted Subsidiaries, taken as
a whole, to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of the Trust;
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(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than
40% of the Capital Stock of the Trust or the total voting power in the
aggregate normally entitled to vote in the election of directors, managers,
or trustees, as applicable, of the transferee(s) or surviving entity or
entities, measured by voting power rather than number of shares, but only
if the Principals and their Related Parties are the Beneficial Owners,
directly or indirectly, of less than a majority of the total voting power
in the aggregate normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the Trust or the transferee(s) or
surviving entity or entities, measured by voting power rather than number
of shares; or
(4) during any period of 12 consecutive months after the Issue Date,
individuals who at the beginning of any such 12-month period constituted
the Board of Directors of the Trust (together with any new directors whose
election by such Board or whose nomination for election by the equity
holders of the Trust, (A) with respect to Venture Holdings Trust was made
pursuant to the terms of the Venture Trust Instrument, and (B) with respect
to Venture Holdings Corporation or another successor to the Trust, or their
respective successors, after the occurrence of a Trust Contribution, (x)
was approved by the Beneficiary(ies) of Venture Holdings Trust on or before
the date of the Trust Contribution, or (y) was approved by a majority of
the directors of the Trust whose appointment, election or nomination to the
Board of Directors was approved in accordance with the preceding clause (x)
or by this clause (y)) cease for any reason to constitute a majority of the
Board of Directors of the Trust then in office.
Notwithstanding anything in this definition to the contrary, a "Change of
Control" shall not be deemed to have occurred solely as a result of a
transaction pursuant to which the Trust is reorganized or reconstituted as a
corporation or a Trust Contribution occurs in accordance with the provisions
described under "Merger, Consolidation or Sale of Assets" and no event which is
otherwise a "Change of Control" shall have occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) Michigan single business tax expense, to the extent deducted in
determining Consolidated Net Income; plus
(2) Trust Tax Distributions; plus
(3) provision for taxes based on income or profits of such Person and
their Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(4) consolidated interest expense of such Person and their Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the extent
that any such expense was deducted in computing such Consolidated Net
Income; plus
(5) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period (calculated in accordance with GAAP)) and other
non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a prior
period (calculated in accordance
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with GAAP)) of such Person and their Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other
non-cash charges of, a Restricted Subsidiary of the Trust (collectively,
the "Add-Backs") shall be added (without duplication) to Consolidated Net
Income to compute Consolidated Cash Flow only (1) in the same proportion as
the Net Income of such Restricted Subsidiary was included in calculating
the Consolidated Net Income of the Trust and (2) only to the extent that
such proportional amount of such Add-Backs would be permitted at the date
of determination to be dividended, distributed or otherwise paid, directly
or indirectly to the Trust by such Restricted Subsidiary without prior
approval (that has not been obtained) and not in violation of the terms of
its charter or any other agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders and such dividend, distribution
or other payment is not subject to the right of any Person to the right of
repayment, avoidance, set off or similar right; provided that, if such
dividend, distribution or other payment does not meet such requirements at
such date, such Add-Backs shall be added to Consolidated Net Income to
compute Consolidated Cash Flow but only if such dividend, distribution or
other payment was actually made during the applicable period without the
required prior approval of any Person or governmental authority and was not
made in violation of such Restricted Subsidiary's charter or any other
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders and such dividend, distribution or other payment is not
subject to the right of any Person to the right of repayment, avoidance,
set-off or similar right.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and their Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; provided, that if such
declaration or payment is not permitted at such date, such Net Income shall
nevertheless be included if such declaration and payment were made during
the applicable period without the prior required approval of any Person or
governmental authority and were not made in violation of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental resolution applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) Trust Tax Distributions to the extent not already deducted shall
be excluded; and
(5) the cumulative effect of a change in accounting principles shall
be excluded.
In addition, solely for purposes of the covenant described under
"-- Certain Covenants -- Restricted Payments," Consolidated Net Income shall
include, without duplication of amounts included above, (A) the amount of
dividends or other distributions paid in cash to the specified Person or a
Restricted Subsidiary thereof by an Unrestricted Subsidiary but only to the
extent of the Consolidated Net Income of such Unrestricted Subsidiary for the
period beginning on the first day of
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the fiscal quarter commencing immediately after such Unrestricted Subsidiary
became an Unrestricted Subsidiary and ending on the last day of the fiscal
quarter for which financial statements are available immediately preceding the
date of such dividend or other distribution and (B) Net Income of a Restricted
Subsidiary earned by such Restricted Subsidiary during the period beginning on
the first day of the first fiscal quarter commencing after the Issue Date and
ending on the last day of the Trust's fiscal quarter for which financial
statements are available immediately preceding the date of determination to the
extent that (x) such Net Income was previously excluded from Consolidated Net
Income by reason of clause (2) of this definition and (y) as of such date of
determination, such Restricted Subsidiary may declare and pay dividends or
similar distributions without any prior governmental approval (that has not been
obtained) and not in violation of its charter or any other agreement, covenant,
instrument, decree, order, statute, rule or governmental regulating applicable
to that Restricted Subsidiary or its stockholders.
"Consolidated Net Worth" means, with respect to any specified Person as of
any date, the sum of:
(1) the consolidated equity of the holders of Capital Stock or the
trust principal of such Person and its consolidated Restricted Subsidiaries
as of such date; plus
(2) the respective amounts reported on such Person's balance sheet as
of such date with respect to any series of Preferred Stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only
to the extent of any cash received by such Person upon issuance of such
Preferred Stock.
"Credit Agreement" means that certain Credit Agreement, dated as of May 27,
1999, by and among the Trust, the lenders referred to therein and The First
National Bank of Chicago, as agent, providing for up to $575 million of
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith from time to time,
and in each case as amended, modified, renewed, refunded, replaced or refinanced
from time to time, including, without limitation, any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder in a manner not in
violation of the Indenture) or adding Restricted Subsidiaries as additional
borrowers or guarantors thereunder.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement), commercial paper facilities or other issues
of debt securities, in each case with, or issued to, banks or other
institutional lenders (including qualified institutional buyers or accredited
investors) providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables), letters of credit or other evidences of indebtedness, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means:
(1) any Senior Debt outstanding under the Credit Agreement and the
1997 Senior Notes; and
(2) after payment in full of all Obligations under the Credit
Agreement and the 1997 Senior Notes, any other Senior Debt permitted under
the New Senior Subordinated Indenture the principal amount of which is
$25.0 million or more and that has been designated by the Trust as
"Designated Senior Debt."
"Disqualified Stock" means, under either Indenture, any Capital Stock that,
by its terms (or by the terms of any security into which it is convertible, or
for which it is exchangeable, in each case at the option of the holder thereof),
or upon the happening of any event, matures or is mandatorily
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redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes issued under such Indenture
mature.
Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Trust to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Trust may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with the covenant described above under the caption
"-- Certain Covenants -- Restricted Payments."
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of Capital Stock of the Trust for cash.
"Event of Loss" means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset which exceeds $15 million or
(ii) any condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such property or asset, or confiscation or requisition
of use of such property or asset, which impairs the value of such property or
asset in an amount exceeding $15 million as determined in good faith by the
Fairness Committee of the Trust.
"Existing Indebtedness" means Indebtedness of the Trust and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date, until such amounts are repaid.
"Fairness Committee" means a committee duly established pursuant to the
Venture Trust Instrument and the bylaws of each other Guarantor, Restricted
Subsidiary and any successor to Venture Holdings Trust without whose approval
(and without the approval of a majority of its Independent members) the Trust, a
Guarantor or a Restricted Subsidiary shall not be authorized to enter into any
transaction or take any action which pursuant to the terms of the Indentures
requires approval of the Fairness Committee.
"Fixed Charges" means, with respect to any specified Person and their
Restricted Subsidiaries, for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and their
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and their Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of their Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of their Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Preferred Stock of such Person or
any of their Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Trust (other than
Disqualified Stock) or to the Trust or a Restricted Subsidiary of the
Trust, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person and its Restricted
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Subsidiaries, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
and its Restricted Subsidiaries for any period, the ratio of the Consolidated
Cash Flow of such Person for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period, calculated on a Pro Forma Basis. In
the event that the specified Person or any of their Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or
redeems Preferred Stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated and on or prior to the date
on which the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving Pro Forma Effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of Preferred Stock, and the use of the proceeds
therefrom as if the same had occurred at the beginning of the applicable
Reference Period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) Vemco, Inc., Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company, Venture Mold &
Engineering Corporation, Venture Service Company, Venture Europe, Inc.,
Venture EU Corporation, Venture Holdings Company LLC and Experience
Management, LLC; and
(2) any other subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of the Indentures; and their respective
successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements, interest rate exchange agreements and
currency exchange agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or currency or commodity values,
including, without limitation, any arrangement whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or floating rate of interest on the
same notional amount.
"Indebtedness" means, without duplication, with respect to any specified
Person, any indebtedness of such Person, whether or not contingent, in respect
of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
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(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Independent" means, with respect to the Trust or any of its Restricted
Subsidiaries, a Person who would qualify as an "independent director" within the
meaning of the rules of the New York Stock Exchange and who (i) shall not
receive any payment or other fees for services to the Trust or any of its
Affiliates (other than for serving as a member of the Fairness Committee of the
Trust or of a Subsidiary of the Trust) and (ii) shall not be an Affiliate,
officer, member or employee of any firm, company or other entity that has
performed services for the Trust or any of its Affiliates during the proceeding
three fiscal years or that the Trust or any of its Affiliates proposes to have
perform services if the amount of compensation for such services during any
fiscal year exceeded or would exceed 5% of such firm's gross revenues during any
of its three preceding fiscal years.
"Investments" means, without duplication, with respect to any Person, all
direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers, employees, independent contractors or other third parties
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Trust or any Restricted Subsidiary of
the Trust sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Trust such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Trust, the Trust shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of the covenant described above
under the caption "-- Certain Covenants -- Restricted Payments."
"Issue Date" means the date of the first issuance of the Notes under the
Indentures.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in (except in connection with any Qualified Receivables Transaction)
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction (except in
connection with any Qualified Receivables Transaction).
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"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such Person or any of their Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or
any of their Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash or Cash Equivalent proceeds
received by the Trust or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable
(including, without limitation, Trust Tax Distributions in respect thereof) as a
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, and amounts required to
be applied to the repayment of Indebtedness, other than (1) in the case of the
New Senior Subordinated Indenture, Senior Debt and (2) in the case of the New
Senior Indenture, Indebtedness under a Credit Facility that is not expressly
subordinated by its terms to any other Indebtedness of the Trust or such
Restricted Subsidiary, secured by a Lien on the asset or assets that were the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Trust nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender, other than, in each case, pursuant to an Investment
in an Unrestricted Subsidiary not in violation of the Indenture;
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness of the Trust or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Trust or any of
its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness, in all cases whether now
outstanding or hereafter created, assumed or incurred in connection therewith
and including without limitation, interest accruing subsequent to the filing of
the petition in bankruptcy at the rate provided in the relevant document,
whether or not an allowed claim.
"Operating Expense or Cost Reduction" means, with respect to the
calculation of a Fixed Charge Coverage ratio on a Pro Forma Basis, an operating
expense or cost reduction with respect to an Acquisition, which, in the good
faith estimate of management, will be realized as a result of such Acquisition,
provided that the forgoing eliminations of operating expenses and realizations
of cost reductions shall be of the types permitted to be given effect to in
accordance with Article 11 of regulation S-X under the Exchange Act as in effect
on the Issue Date and such reduction is subject to negative comfort by the
Trust's independent public accountants.
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"Permitted Business" means the business conducted (or proposed to be
conducted) by the Trust and its Restricted Subsidiaries as of the Issue Date and
any and all businesses that in the good faith judgment of the Board of Directors
of the Trust are reasonably related businesses.
"Permitted Investments" means:
(1) any Investment in the Trust or in a Restricted Subsidiary of the
Trust;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Trust or any Restricted Subsidiary of the
Trust in a Person (other than a Receivables Subsidiary), if as a result of
such Investment:
(a) such Person becomes a Restricted Subsidiary of the Trust; 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 Trust or a Restricted Subsidiary of the Trust;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Trust;
(6) Hedging Obligations;
(7) loans or advances to employees, officers, independent contractors
and other third parties of the Trust and its Restricted Subsidiaries in the
ordinary course of business for bona fide business purposes;
(8) Investments in securities of trade creditors or customers received
pursuant to any plan or reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(9) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (9) not to exceed $25
million; and
(10) the acquisition by a Receivables Subsidiary in connection with a
Qualified Receivables Transaction of Equity Interests of a trust or other
Person established by such Receivables Subsidiary to effect such Qualified
Receivables Transaction; and any other Investment by the Trust or a
Subsidiary of the Trust in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person, in connection with a Qualified
Receivables Transaction, provided that each such other Investment is in the
form of a note or other instrument that the Receivables Subsidiary or other
Person is required to repay as soon as practicable from available cash
collections less amounts required to be established as reserves pursuant to
contractual agreements with entities that are not Affiliates of the Trust
entered into as part of a Qualified Receivables Transaction.
"Permitted Junior Securities" means:
(1) Equity Interests in the Trust or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any
debt securities issued in exchange for Senior Debt to substantially the
same extent as, or to a greater extent than, the New Senior Subordinated
Notes and the Subsidiary Guarantees thereof are subordinated to Senior Debt
under the New Senior Subordinated Indenture.
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"Permitted Liens" means:
(1) with respect to the New Senior Subordinated Notes, Liens of the
Trust and any Guarantor securing Indebtedness and other Obligations
securing Senior Debt that was permitted by the terms of the New Senior
Subordinated Indenture to be incurred;
(2) with respect to the New Senior Notes, Liens of the Trust and any
Guarantor securing Indebtedness and other Obligations under Credit
Facilities that are not expressly subordinated by their terms to any other
Indebtedness of the Trust or such Guarantor that was permitted by the terms
of the New Senior Indenture to be incurred;
(3) Liens in favor of the Trust or the Guarantors;
(4) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Trust or any Restricted
Subsidiary of the Trust; provided that such Liens were not incurred in
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Trust or the Restricted Subsidiary;
(5) Liens on property existing at the time of acquisition thereof by
the Trust or any Restricted Subsidiary of the Trust, provided that such
Liens were not incurred in contemplation of such acquisition;
(6) Liens to secure the performance of bids, trade contracts (other
than advanced money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(7) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (5) of the second paragraph of the covenant entitled
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" covering only the assets acquired with such Indebtedness;
(8) Liens existing on the Issue Date;
(9) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(10) statutory liens of carriers, warehousemen, mechanics,
materialmen, landlords, repairmen or other like Liens arising by operation
of law in the ordinary course of business, provided that (i) the underlying
obligations are not overdue for a period of more than 60 days, or (ii) such
Liens are being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books of the
Trust in accordance with GAAP;
(11) easements, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title defects which, singly or in the aggregate, do
not in any case materially detract from the value of the property subject
thereto (as such property is used by the Trust or any of its Restricted
Subsidiaries) or interfere with the ordinary conduct of the business of the
Trust or any of its Restricted Subsidiaries;
(12) Liens arising by operation of law in connection with court orders
and judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default with respect thereto;
(13) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security legislation;
(14) the New Senior Indenture will permit Liens securing the New
Senior Notes and the New Senior Subordinated Indenture will permit Liens
securing the New Senior Subordinated Notes;
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(15) leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Trust or any of its Restricted Subsidiaries or materially
detracting from the value of the relative assets of the Trust or any
Restricted Subsidiary;
(16) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Trust or any of its Subsidiaries in the ordinary course of business;
(17) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness that was previously so secured in a manner no more adverse to
the Holders of the Notes than the terms of the Liens securing such
refinanced Indebtedness, provided that the Indebtedness secured is not
increased and the lien is not extended to any additional assets or property
unless the Notes are equally and ratably secured by such additional assets
or the additional assets were acquired after the Issue Date;
(18) additional Liens incurred in the ordinary course of business of
the Trust or any Subsidiary of the Trust with respect to obligations that
do not exceed $5.0 million at any one time outstanding;
(19) Liens on assets of a Restricted Subsidiary that is not a
Guarantor securing Indebtedness of such Restricted Subsidiary that was
permitted to be incurred under clause (14) of the second paragraph of the
covenant entitled "Incurrence of Indebtedness and Issuance of Preferred
Stock;" and
(20) Liens on assets of a Receivables Subsidiary incurred in
connection with a Qualified Receivables Transaction.
"Permitted Preferred Stock" means any Preferred Stock of the Trust or any
of its Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, amend, restate, refinance, renew, replace or refund
other Preferred Stock of the Trust or any of its Restricted Subsidiaries (other
than intercompany Preferred Stock); provided that:
(1) the liquidation preference of such Permitted Preferred Stock does
not exceed the liquidation preference of the Preferred Stock so extended,
refinanced, renewed, replaced or refunded (plus all accrued dividends
thereon and the amount of all expenses and premiums incurred in connection
therewith);
(2) such Permitted Preferred Stock has a final maturity date (or
redemption date, as applicable) later than the final maturity date (or
redemption date, as applicable) of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Preferred Stock being extended, refinanced, renewed, replaced, or
refunded;
(3) if the Preferred Stock being extended, refinanced, renewed,
replaced, defeased or refunded is Disqualified Stock, such Permitted
Preferred Stock has a redemption, maturity, repurchase or other required
payment (other than dividend payments) no earlier than the earliest
redemption, maturity, repurchase or other required payment (other than
dividend payments) of the Preferred Stock being extended, refinanced,
renewed, replaced, defeased or refunded;
(4) such Preferred Stock is issued either by the Trust or by the
Subsidiary who is the issuer on the Preferred Stock being extended,
refinanced, renewed, replaced, or refunded; and
(5) Permitted Preferred Stock constituting Disqualified Stock may only
be issued if the Preferred Stock being extended, refinanced, renewed,
replaced or refunded constitutes Disqualified Stock.
"Permitted Refinancing Indebtedness" means any Indebtedness or Preferred
Stock (other than Disqualified Stock) of the Trust or any of its Restricted
Subsidiaries issued in exchange for, or the net proceeds of which are used to
extend, amend, restate, refinance, renew, replace, defease or refund
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other Indebtedness of the Trust or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value or liquidation preference,
if applicable) of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus all
accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the applicable
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the applicable Notes on terms at least as favorable to the
Holders of the applicable Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(4) such Indebtedness is incurred or such Preferred Stock is issued
either by the Trust or by the Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"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 or any other payments of such Person over
the holders of other Capital Stock issued by such Person.
"Principals" means Larry J. Winget.
"Pro Forma Basis" or "Pro Forma Effect" means, for purposes of calculating
the Fixed Charge Coverage Ratio, giving pro forma effect to certain transactions
such that:
(1) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Calculation Date
shall be assumed to have occurred on the first day of the Reference Period
and any Operating Expense or Cost Reduction with respect to such
Acquisition shall be deducted from such calculation;
(2) transactions giving rise to the need to calculate the Fixed Charge
Coverage Ratio shall be assumed to have occurred on the first day of the
Reference Period;
(3) the incurrence of any Indebtedness or issuance of any Disqualified
Stock during the Reference Period or subsequent to the Reference Period and
on or prior to the Calculation Date (and the application of the proceeds
therefrom, including to refinance or retire other Indebtedness) shall be
assumed to have occurred on the first day of such Reference Period (except
that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based on the average daily
balance during the Reference Period);
(4) the Fixed Charges of such Person attributable to interest on any
Indebtedness or dividends on any Disqualified Stock bearing a floating
interest (or dividend) rate shall be computed on a Pro Forma Basis as if
the average rate in effect from the beginning of the Reference Period to
the Calculation Date had been the applicable rate for the entire period,
unless such Person or any of its Restricted Subsidiaries is a party to a
Hedging Obligation (which shall remain in effect for the 12-month period
immediately following the Calculation
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Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be
used;
(5) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(6) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Trust or any of its Subsidiaries pursuant to
which the Trust or any of its Subsidiaries sells, conveys or otherwise transfers
to (i) a Receivables Subsidiary (in the case of a transfer by the Trust or any
of its Subsidiaries) and (ii) any other Person (in the case of a transfer by a
Receivables Subsidiary), or grants a security interest in, any Receivables,
whether now existing or arising in the future, of the Trust or any of its
Subsidiaries.
"Receivables Debt" means Indebtedness (i) as to which neither the Trust nor
any of its Subsidiaries (other than the Receivables Subsidiary) (a) provides any
credit support that would constitute Indebtedness or (b) is directly or
indirectly liable (as a guarantor or otherwise); and (ii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of any of the Trust or any of its Subsidiaries (other than
the Receivables Subsidiary); provided that, notwithstanding the foregoing, the
Trust and any of its Subsidiaries that sell Receivables to the Receivables
Subsidiary shall be allowed to provide such representations, warranties,
covenants and indemnities as are customarily required in such transactions so
long as no such representations, warranties, covenants or indemnities constitute
a Guarantee of payment or recourse against credit losses.
"Receivables" means accounts receivable and all other assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and all other
assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable.
"Receivables Facility" means one or more receivables financing facilities,
as amended from time to time, pursuant to which the Trust or any of its
Subsidiaries sells its accounts receivable to a Receivables Subsidiary.
"Receivables Subsidiary" means a Subsidiary of the Trust, created primarily
to purchase or finance the receivables of the Trust and/or its Subsidiaries
pursuant to a Receivables Facility, so long as it: (a) has no Indebtedness other
than Receivables Debt; (b) is not party to any agreement, contract, arrangement
or understanding with any of the Trust or any other Subsidiary of the Trust
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Trust or such Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of any of the Trust or
a Guarantor; (c) is a Person with respect to which neither the Trust nor any of
its Subsidiaries has any direct obligation to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (d) has not Guaranteed or otherwise directly provided
credit support for any Indebtedness of any of the Trust or any of its
Subsidiaries. Notwithstanding the foregoing, the Trust and the Guarantors may
make capital contributions in the form of Receivables transferred to the
Receivables Subsidiary for non-cash consideration to the extent necessary or
desirable to prevent a disruption of purchases of Receivables or to avoid a
default under the Receivables Facility. If, at any time, such Receivables
Subsidiary would fail to meet the foregoing requirements as a Receivables
Subsidiary, it shall thereafter cease to be a Receivables Subsidiary for
purposes of the Indentures and any Indebtedness
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of such Receivables Subsidiary shall be deemed to be incurred by a Subsidiary of
the Trust as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock," the Trust shall be in default of such covenant).
"Reference Period" with regard to any Person means the four full fiscal
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Notes or the Indentures.
"Related Party" means Larry J. Winget's estate or legal representative,
members of his immediate family and all lineal descendants of Larry J. Winget
and all spouses of such lineal descendants (or any trust(s) or entity(ies) whose
sole beneficiaries or holders of Equity Interests, or the holders of a majority
of the outstanding Voting Stock are any one or more of the foregoing).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Debt" means, with respect to the New Senior Subordinated Notes:
(1) all Indebtedness of the Trust or any Guarantor outstanding under
Credit Facilities that is not expressly subordinated by its terms to any
other Indebtedness of the Trust or such Guarantor, the New Senior Notes and
the 1997 Senior Notes and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of the Trust or any Guarantor permitted to
be incurred under the terms of the New Senior Subordinated Indenture,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of payment to
the New Senior Subordinated Notes or any Subsidiary Guarantee thereof; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt will
not include:
(1) any liability for federal, state, local or other taxes owed or
owing by the Trust and the Guarantors;
(2) any Indebtedness of the Trust or Guarantors to any of their
Subsidiaries or other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of
the New Senior Subordinated Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and
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(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means (1) with respect to the New Senior
Subordinated Notes, a Guarantee by a Subsidiary on a senior subordinated basis
of the Trust's payment obligations under the New Senior Subordinated Notes and
the New Senior Subordinated Indenture in the form attached as an exhibit to the
New Senior Subordinated Indenture and (2) with respect to the New Senior Notes,
a Guarantee by a Subsidiary on a senior basis of the Trust's payment obligations
under the New Senior Notes and the New Senior Indenture in the form attached as
an exhibit to the New Senior Indenture.
"Tax Distribution Amount" means, in respect of any period after the Issue
Date during which the Trust is a Pass-Through Entity for federal income tax
purposes, an amount, determined in good faith by the Trust's independent public
accountants, which shall be a nationally recognized accounting firm, equal to
the sum of (x) the amount of intangibles tax actually imposed on each
Beneficiary of the Trust in respect of Trust Tax Distributions for such period
and (y) (a) the sum of the highest marginal federal income tax rate and highest
state and local income tax rate applicable to a Beneficiary of the Trust on
income of the Investee Companies which are Pass-Through Entities for federal,
state or local income tax purposes for such period, expressed as a percentage,
multiplied by (b) such Investee Companies' taxable income for such period
computed taking into account, without limitation, the deduction for single
business and franchise tax actually imposed on such Investee Companies; provided
that (i) the foregoing shall be determined by giving effect to the deduction of
relevant state and local income and intangibles taxes for purposes of
determining federal income taxes, such deduction to be computed based on the
state and local income tax rates applicable in clause (y) (a) hereof and the
amount of intangibles tax determined under clause (x) hereof, and (ii) the
foregoing shall be appropriately reduced by the amount of cumulative tax losses
of such Investee Companies from any previous period (to the extent not
previously utilized in computing the Tax Distribution Amounts) since the Issue
Date and any investment tax credits and other tax credits of such Investee
Companies since the Issue Date.
"Trust" means (1) Venture Holdings Trust, a trust organized under the laws
of the State of Michigan, (2) Venture Holdings Corporation (after the occurrence
of a Trust Contribution) or (3) any successor Person to Venture Holdings Trust
or Venture Holdings Corporation (after the occurrence of a Trust Contribution)
in accordance with the provisions under "Merger, Consolidation or Sale of
Assets."
"Unrestricted Subsidiary" means any Subsidiary of the Trust that is
designated by the Board of Directors of the Trust as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Trust or any Restricted Subsidiary of the Trust
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Trust or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Trust;
(3) is a Person with respect to which neither the Trust nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results other than an Investment made in such
Subsidiary not in violation of the Indenture; and
(4) is not guaranteeing or otherwise directly or indirectly providing
credit support for any Indebtedness of the Trust or any of its Restricted
Subsidiaries.
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Any designation of a Subsidiary of the Trust as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the caption
"-- Certain Covenants -- Restricted Payments." If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indentures and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Trust as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under the caption "-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," the Trust shall be in default of
such covenant. The Board of Directors of the Trust may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Trust of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock,"
calculated on a Pro Forma Basis as if such designation had occurred at the
beginning of the Reference Period; and (2) no Default or Event of Default would
be in existence following such designation.
"Venture Trust Instrument" means the Agreement, dated December 28, 1987, as
amended and restated on February 16, 1994, as amended, among Larry J. Winget, as
Trustee, and Larry J. Winget, as Settlor, Beneficiary and Special Advisor, as
such agreement may be amended in accordance with the terms of the Indentures.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or Preferred Stock at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, or liquidation preference, as applicable,
including payment at final maturity, in respect thereof, by (b) the number
of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount, or liquidation preference,
as applicable, of such Indebtedness or Preferred Stock, as the case may be,
of such Indebtedness.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
This summary is of a general nature and is included herein solely for
informational purposes. It is not intended to be, nor should it be construed as
being, legal or tax advice. No representation with respect to the consequences
to any particular holder is made. You should consult your own tax advisors with
respect to your particular circumstances.
The following is a general discussion of certain United States federal
income tax consequences associated with the exchange of the Outstanding Notes
for the Exchange Notes pursuant to the Exchange Offer and the ownership and
disposition of the Exchange Notes. This summary applies only to an initial
beneficial owner of an Exchange Note who acquired an Outstanding Note at the
initial offering for the original offering price thereof and who acquires the
Exchange Note pursuant to the Exchange Offer. This discussion is based on
provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change, possibly with retroactive effect. This discussion does
not address the tax consequences to subsequent purchasers of the Exchange Notes
and is limited to investors who hold the Exchange Notes as capital assets.
147
<PAGE> 154
Furthermore, this discussion does not address all aspects of United States
federal income taxation that may be applicable to investors in light of their
particular circumstances, or to investors subject to special treatment under
United States federal income tax law (including, without limitation, certain
financial institutions, insurance companies, tax-exempt entities, dealers in
securities, persons owning the Exchange Notes through partnerships or other
pass-through entities, former citizens or residents of the United States, or
persons who have acquired the Exchange Notes as part of a straddle, hedge,
conversion transaction or other integrated investment). This summary also does
not discuss the Federal alternative minimum tax consequences to the holder, not
does it discuss consequences to a holder under state, local or foreign tax laws,
which may differ from corresponding Federal income tax laws. Prospective
investors are advised to consult their own tax adviser regarding the particular
tax consideration pertaining to them with respect to ownership and disposition
of the Exchange Notes, including the effects of applicable federal, state, local
foreign or other tax laws to which they may be subject, as well as possible
changes in the tax laws.
EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF THE EXCHANGE NOTES, INCLUDING THE APPLICABILITY OF ANY FEDERAL
ESTATE OR GIFT TAX LAWS OR ANY STATE, LOCAL OR FOREIGN TAX LAWS, ANY CHANGES IN
APPLICABLE TAX LAWS AND ANY PENDING OR PROPOSED LEGISLATION OR REGULATIONS.
UNITED STATES TAXATION OF UNITED STATES HOLDERS
As used herein, (A) the term "United States Holder" means a beneficial
owner of an Note that is, for United States federal income tax purposes, (i) a
citizen or resident (as determined for U.S. federal income tax purposes) of the
United States, (ii) a corporation or partnership created or organized in or
under the laws of the United States or of any political subdivision thereof,
(iii) an estate the income of which is subject to United States federal income
taxation regardless of its source and (iv) a trust if a United States court is
able to exercise primary supervision over the administration of such trust and
one or more United States persons have the authority to control all substantial
decisions of such trust and (B) the term "Non-U.S. Holder" means a beneficial
owner of an Note that is not a United States Holder.
EXCHANGE OFFER
The exchange of an Outstanding Note for an Exchange Note pursuant to the
Exchange Offer should not constitute a "significant modification" of the
Outstanding Note for United States federal income tax purposes and, accordingly,
the Exchange Note received should be treated as a continuation of the
Outstanding Note in the hand of such holder. As a result, there should be no
United States federal income tax consequences to a United States Holder who
exchanges an Outstanding Note for an Exchange Note pursuant to the Exchange
Offer, and any such holder should have the same adjusted tax basis and holding
period in the Exchange Note as it had in the Outstanding Note immediately before
the exchange.
PAYMENTS OF INTEREST
Stated interest payable on an Exchange Note generally will be included in
the gross income of a United States Holder as ordinary interest income at the
time accrued or received, in accordance with such United States Holder's method
of accounting for United States federal income tax purposes.
DISPOSITION OF THE EXCHANGE NOTES
Upon the sale, exchange, retirement at maturity or other taxable
disposition (collectively, a "disposition") of an Exchange Note, a United States
Holder generally will recognize capital gain or loss equal to the difference
between the amount realized on the disposition by such holder (except to the
extent such amount is attributable to accrued interest, which will be treated as
ordinary interest income) and such holder's adjusted tax basis in the Exchange
Note. Such capital gain or loss will be
148
<PAGE> 155
long-term capital gain or loss if such United States Holder's holding period for
the Exchange Note exceeds one year at the time of the disposition. Recently
enacted United States tax legislation reduced the maximum federal income tax
rate applicable to long-term capital gains in certain instances. Prospective
investors should consult their tax advisors regarding the possible effect on
such investors of such legislation.
UNITED STATES TAXATION OF NON-U.S. HOLDERS
PAYMENTS OF INTEREST
In general, payments of interest received by a Non-U.S. Holder will not be
subject to United States federal withholding tax, provided that (i)(a) the
Non-U.S. Holder does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote,
(b) the Non-U.S. Holder is not a controlled foreign corporation that is related
to the Company actually or constructively through stock ownership, (c) the
Non-U.S. Holder is not a bank that has purchased its Exchange Notes pursuant to
an extension of credit made in the ordinary course of its trade or business, and
(d) the beneficial owner of the Exchange Note, under penalties or perjury,
provides the Company or its agent with the beneficial owner's name and address
and certifies that it is not a United States Holder in compliance with
applicable requirements, (ii) the interest received on the Exchange Note is not
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business within the United States and the Non-U.S. Holder complies with certain
reporting requirements or (iii) the Non-U.S. Holder is entitled to the benefits
of an income tax treaty under which the interest is exempt from United States
withholding tax and the Non-U.S. Holder complies with certain reporting
requirements. Payments of interest not exempt from the United States federal
withholding tax as described above will be subject to such withholding tax at
the rate of 30% (subject to reduction under an applicable income tax treaty).
DISPOSITION OF THE EXCHANGE NOTES
A Non-U.S. Holder generally will not be subject to United States federal
income tax (and generally no tax will be withheld) with respect to gain realized
on the disposition of an Exchange Note, unless (i) the gain is effectively
connected with a United States trade or business conducted by the Non-U.S.
Holder, (ii) the Non-U.S. Holder is an individual who is present in the United
States for 183 or more days during the taxable year of the disposition and
certain other requirements are satisfied, or (iii) the Non-U.S. Holder is
subject to certain provisions of United States federal income tax law applicable
to certain expatriates. In addition, an exchange of an Outstanding Note for an
Exchange Note pursuant to the Exchange Offer will not constitute a taxable
exchange of the Outstanding Note for Non-U.S. Holders. See "United States
Taxation of United States Holders -- Exchange Offer."
EFFECTIVELY CONNECTED INCOME
If interest and other payments received by a Non-U.S. Holder with respect
to the Exchange Notes (including proceeds from the disposition of the Exchange
Notes) are effectively connected with the conduct by the Non-U.S. Holder of a
trade or business within the United States (or the Non-U.S. Holders is otherwise
subject to United States federal income taxation on a net basis with respect to
such Holder's ownership of the Exchange Notes), such Non-U.S. Holder will
generally be subject to the other rules described above under "United States
Taxation of United States Holders" (subject to any modification provided under
an applicable income tax treaty). Such Non-U.S. Holder may also be subject to
the "branch profits tax" if such Holder is a corporation.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Certain non-corporate United States Holders may be subject to backup
withholding at a rate of 31% on payments of principal and interest on, and the
proceeds of the disposition of the Exchange
149
<PAGE> 156
Notes. In general, backup withholding will be imposed only if the United States
Holder (i) fails to furnish its taxpayer identification number ("TIN"), which,
for an individual, would be his or her Social Security number, (ii) furnishes an
incorrect TIN, (iii) is notified by the IRS that it has failed to report
payments of interest or dividends or (iv) under certain circumstances, fails to
certify, under penalty of perjury, that it has furnished a correct TIN and has
been notified by the IRS that it is subject to backup withholding tax for
failure to report interest or dividend payments. In addition, such payments of
principal and interest to United States Holders will generally be subject to
information reporting. United States Holders should consult their tax advisors
regarding their qualification for exemption from backup withholding and the
procedure for obtaining such an exemption, if applicable.
The Company must report annually to the IRS and to each Non-U.S. Holder any
interest that is subject to U.S. withholding tax or that is exempt from
withholding pursuant to a tax treaty or the portfolio interest exception. Copies
of these information returns may also be made available under the provisions of
a specific treaty or agreement to the tax authorities of the country in which
the Non-U.S. Holder resides.
Backup withholding and information reporting on IRS Form 1099 generally
will not apply to interest payments made to a Non-U.S. Holder of an Exchange
Note who provides the certification described under "United States Taxation of
Non-U.S. Holders -- Payments of Interest" or otherwise establishes an exemption
from backup withholding. Payments of the proceeds of a disposition of the
Exchange Notes by or through a United States office of a broker generally will
be subject to backup withholding at a rate of 31% and information reporting
unless the Non-U.S. Holder certifies it is a Non-U.S. Holder under penalties of
perjury or otherwise establishes an exemption. Payments of the proceeds of a
disposition of the Exchange Notes by or through a foreign office of a United
States broker, a controlled foreign corporation for United States federal income
tax purposes or a foreign broker with certain relationships to the United States
generally will be subject to information reporting, but not backup withholding.
The amount of any backup withholding imposed on a payment to a Holder of an
Exchange Note will be allowed as a credit against such Holder's United States
federal income tax liability and may entitle such Holder to a refund, provided
that the required information is furnished to the IRS.
RECENTLY ISSUED TREASURY REGULATIONS
The U.S. Treasury Department recently issued final Treasury regulations
governing information reporting and the certification procedures regarding
withholding and backup withholding on certain amounts paid to Non-U.S. Holders.
The new Treasury regulations are generally effective for payments made after
December 31, 1999. In addition, the new Treasury regulations would alter the
procedures for claiming the benefits of an income tax treaty and may change the
certification procedures relating to the receipt by intermediaries of payments
on behalf of a beneficial owner of an Exchange Note. Prospective investors
should consult their tax advisors concerning the effect, if any, of such new
Treasury regulations on an investment in the Exchange Notes.
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<PAGE> 157
PLAN OF DISTRIBUTION
Based on interpretations by the SEC set forth in no-action letters issued
to third parties in similar transactions, we believe that the Exchange Notes
issued in the Exchange Offer in exchange for the Outstanding Notes may be
offered for resale, resold and otherwise transferred by holders without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that the Exchange Notes are acquired in the ordinary
course of such holders' business and the holders are not engaged in, and do not
intend to engage in, and have no arrangement or understanding with any person to
participate in, a distribution of Exchange Notes. This position does not apply
to any holder that is (1) an "affiliate" of ours within the meaning of Rule 405
under the Securities Act, (2) a broker-dealer who acquired Notes directly from
us or (3) broker-dealers who acquired Notes as a result of market-making or
other trading activities. Any broker-dealers ("Participating Broker-Dealers")
receiving Exchange Notes in the Exchange Offer are subject to a prospectus
delivery requirement with respect to resales of the Exchange Notes. To date, the
SEC has taken the position that Participating Broker-Dealers may fulfill their
prospectus delivery requirements with respect to transactions involving an
exchange of securities such as the exchange pursuant to the Exchange Offer
(other than a resale of an unsold allotment from the sale of the Outstanding
Notes to the initial purchasers) with this Prospectus.
Each broker-dealer receiving Exchange Notes for its own account in the
Exchange Offer must acknowledge that it will deliver a Prospectus in any resale
of the Exchange Notes. Participating Broker-Dealers may use this Prospectus in
reselling Exchange Notes, if the Outstanding Notes were acquired for their own
accounts as a result of market-making activities or other trading activities. We
have agreed that a Participating Broker-Dealer may use this Prospectus in
reselling Exchange Notes for a period ending 270 days after the Expiration Date
or, if earlier, when a Participating Broker-Dealer has disposed of all Exchange
Notes. A Participating Broker-Dealer intending to use this Prospectus in the
resale of Exchange Notes must notify us on or before the Expiration Date, that
it is a Participating Broker-Dealer. This notice may be given in the space
provided for in the Letter of Transmittal or may be delivered to the Exchange
Agent. We have agreed that, for a period of 270 days after the Expiration Date,
we will make this Prospectus, and any amendment or supplement to this
Prospectus, available to any broker-dealer that requests these documents in the
Letter of Transmittal. See "The Exchange Offer -- Resales of Exchange Notes" for
more information.
We will not receive any cash proceeds from the Exchange Notes.
Broker-dealers acquiring Exchange Notes for their own accounts may sell the
notes in one or more transactions in the over-the-counter market, in negotiated
transactions, through writing options on the Exchange Notes or a combination of
such methods. Any resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any broker-dealer and/or the purchasers of Exchange Notes.
Any broker-dealer reselling Exchange Notes that it received in the Exchange
Offer and any broker or dealer that participates in a distribution of Exchange
Notes may be deemed to be an "underwriter" within the meaning of the Securities
Act. Any profit on any resale of Exchange Notes and any commissions or
concessions received by any persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a Prospectus, a
broker-dealer will not admit that it is an "underwriter" within the meaning of
the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Exchange Notes offered hereby
will be passed upon for us by Dykema Gossett PLLC, Detroit, Michigan.
151
<PAGE> 158
EXPERTS
The consolidated financial statements of Venture Holdings Company LLC as of
December 31, 1998 and 1997 and for each of the years ended December 31, 1998,
1997 and 1996 included in this prospectus have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report appearing herein, and are
included in reliance upon the report of such firm given their authority as
experts in accounting and auditing.
The consolidated financial statements of Peguform GmbH as of September 30,
1998 and 1997, and for the years ended September 30, 1998 and 1997 included in
this prospectus have been audited by BDO International GmbH
Wirtschaftsprufungsgesellschaft, independent auditors, as stated in their report
appearing herein, and are included in reliance upon the report of such firm
given their authority as experts in accounting and auditing.
152
<PAGE> 159
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
VENTURE HOLDINGS COMPANY LLC
AS SUCCESSOR TO VENTURE HOLDINGS TRUST
Report of Independent Public Accountants.................... F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements of Income and Comprehensive
Income.................................................... F-4
Consolidated Statements of Changes in Trust Principal....... F-5
Consolidated Statements of Cash Flows....................... F-6
Notes to Consolidated Financial Statements.................. F-7
PEGUFORM GMBH
Report of Independent Auditors.............................. F-26
Consolidated Balance Sheets................................. F-27
Consolidated Statements of Income........................... F-29
Consolidated Statements of Stockholders' Equity............. F-30
Consolidated Statements of Cash Flows....................... F-31
Notes to the Consolidated Financial Statements.............. F-33
</TABLE>
F-1
<PAGE> 160
INDEPENDENT AUDITORS' REPORT
Trustee of Venture Holdings Trust
Fraser, Michigan
We have audited the accompanying consolidated balance sheets of Venture
Holdings Trust as of December 31, 1998 and 1997, and the related consolidated
statements of income, comprehensive income, trust principal and cash flows for
each of the three years in the period ended December 31, 1998. Our audits also
included the financial statement schedule listed in the Index at Item 14. These
financial statements and the financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the financial statement schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the consolidated financial position of Venture Holdings Trust as of
December 31, 1998 and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles. Also, in our opinion,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE LLP
March 30, 1999
Detroit, Michigan
F-2
<PAGE> 161
VENTURE HOLDINGS TRUST
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- MARCH 31,
1998 1997 1999
-------- -------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 130 $ 1,477 $ 3,153
Accounts receivable, net, includes related party
receivables of $56,648, $32,260 and $59,878 (unaudited)
at December 31, 1998 and 1997, and March 31, 1999
respectively (Notes 2, 6 & 7).......................... 190,135 161,157 200,067
Inventories (Notes 3, 6 & 7).............................. 51,139 52,616 53,288
Prepaid expenses and other (Note 11)...................... 8,870 8,994 8,648
-------- -------- --------
Total current assets................................... 250,274 224,244 265,156
Property, Plant and Equipment, Net (Notes 4 & 7).......... 200,544 205,765 196,226
Intangible Assets (Note 5)................................ 52,022 53,900 51,552
Other Assets (Notes 1 & 7)................................ 26,636 25,771 26,547
Deferred Tax Assets (Note 11)............................. 11,839 14,442 11,035
-------- -------- --------
Total Assets........................................... $541,315 $524,122 $550,516
======== ======== ========
LIABILITIES AND TRUST PRINCIPAL
Current Liabilities:
Accounts payable (Note 7)................................. $ 52,351 $ 70,047 $ 62,506
Accrued payroll & taxes................................... 9,017 7,341 10,331
Accrued interest.......................................... 13,387 12,148 6,274
Other accrued expenses.................................... 5,299 6,485 5,701
Current portion of long-term debt (Note 6)................ 1,565 3,122 1,588
-------- -------- --------
Total current liabilities.............................. 81,619 99,143 86,400
Other Liabilities (Note 10)............................... 7,254 14,281 5,948
Deferred Tax Liabilities (Note 11)........................ 11,955 13,350 11,881
Long-Term Debt (Note 6)................................... 363,374 333,066 361,068
-------- -------- --------
Total liabilities...................................... 464,202 459,840 465,297
Commitments and Contingencies (Note 8)...................... -- -- --
Trust Principal:
Accumulated other comprehensive income -- minimum pension
liability in excess of unrecognized prior service cost,
net of tax (Note 10)................................... (737) (737)
Trust principal........................................... 77,850 64,282 85,956
-------- -------- --------
Total trust principal.................................. 77,113 64,282 85,219
-------- -------- --------
Total Liabilities and Trust Principal............. $541,315 $524,122 $550,516
======== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE> 162
VENTURE HOLDINGS TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------ -------------------
1998 1997 1996 1999 1998
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Sales (Notes 7 & 9)................. $645,196 $624,113 $351,777 $165,992 $166,612
Cost of Products Sold (Note 7).......... 532,809 521,361 302,940 133,070 133,616
-------- -------- -------- -------- --------
Gross Profit............................ 112,387 102,752 48,837 32,922 32,996
Selling, General and Administrative
Expense (Note 7)...................... 59,689 57,217 26,588 14,270 14,855
Payments to Beneficiary in Lieu of Taxes
(Note 7).............................. 535 472 666 0 0
-------- -------- -------- -------- --------
Income from Operations.................. 52,163 45,063 21,583 18,652 18,141
Interest Expense........................ 36,641 30,182 19,248 9,479 7,145
-------- -------- -------- -------- --------
Net Income Before Extraordinary Items
and Taxes............................. 15,522 14,881 2,335 9,173 10,996
Tax Provision (Note 11)................. 1,954 3,358 336 1,067 1,465
-------- -------- -------- -------- --------
Net Income Before Extraordinary Items... 13,568 11,523 1,999 8,106 9,531
Net Extraordinary Loss on Early
Retirement of Debt (Note 12).......... 0 0 2,738 0 0
-------- -------- -------- -------- --------
Net Income (Loss)....................... 13,568 11,523 (739) 8,106 9,531
Other Comprehensive Income--minimum
pension liability in excess of
unrecognized prior service cost, net
of tax (Note 10)...................... (737) 0 0 0 0
-------- -------- -------- -------- --------
Comprehensive Income (Loss)............. $ 12,831 $ 11,523 $ (739) $ 8,106 $ 9,531
======== ======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE> 163
VENTURE HOLDINGS TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN TRUST PRINCIPAL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-----------------
1998 1997 1996 1999 1998
------ ------ ------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Trust Principal, Beginning of Period............ 64,282 52,759 53,498 $77,113 $64,282
Comprehensive Income (Loss) Net Income (Loss)... 13,568 11,523 (739) 8,106 9,531
Other Comprehensive Income-- minimum pension
liability in excess of unrecognized prior
service cost, net of tax (Note 10)......... (737)
------ ------ ------ ------- -------
Comprehensive Income (Loss)..................... 12,831 11,523 (739) 8,106 9,531
------ ------ ------ ------- -------
Trust Principal, End of Period.................. 77,113 64,282 52,759 $85,219 $73,813
====== ====== ====== ======= =======
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE> 164
VENTURE HOLDINGS TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------- --------------------
1998 1997 1996 1999 1998
-------- --------- --------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...................... $ 13,568 $ 11,523 $ (739) $ 8,106 $ 9,531
Adjustments to reconcile net income to
net cash (used in) provided by
operating activities, net of
acquisitions:
Depreciation and amortization........ 39,320 32,147 22,628 10,794 9,079
Change in accounts receivable........ (29,795) (31,489) (35,789) (10,056) (34,815)
Change in inventories................ 1,477 (1,517) (4,298) (2,149) (1,738)
Change in prepaid expenses........... 2,147 2,329 (4,116) (100) 343
Change in other assets............... (7,045) (7,178) (6,445) (3,105) 379
Change in accounts payable........... (17,696) (14,774) 32,400 10,155 16,554
Change in accrued expenses........... (21) (5,588) 21,221 (5,397) (4,099)
Change in other liabilities.......... (7,028) (1,630) 8,725 (1,305) (3,428)
Change in deferred taxes............. (320) 3,119 (1,322) 1,052 1,465
Net extraordinary loss on early
extinguishment of debt............ 0 0 2,738 0 0
-------- --------- --------- -------- --------
Net cash (used in) provided by
operating activities............ (5,393) (13,058) 35,003 7,995 (6,729)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures................. (24,706) (33,012) (64,593) (2,688) (8,371)
Purchase of subsidiaries, net of cash
acquired.......................... 0 (4,081) (56,954) 0 0
-------- --------- --------- -------- --------
Net cash used in investing
activities...................... (24,706) (37,093) (121,547) (2,688) (8,371)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under
revolving credit agreement........ 32,000 (46,000) 91,000 (2,000) 23,000
Net proceeds from issuance of debt... 0 205,000 69,249 0 0
Principal payments on debt........... (3,248) (122,808) (14,535) (284) (1,392)
Payment for early extinguishment of
debt................................. 0 0 (62,738) 0 0
-------- --------- --------- -------- --------
Net cash (used in) provided by
financing activities................. 28,752 36,192 82,976 (2,284) 21,608
-------- --------- --------- -------- --------
Net Increase (Decrease) in Cash........ (1,347) (13,959) (3,568) 3,023 6,508
Cash and Cash Equivalents at Beginning
of Period............................ 1,477 15,436 19,004 130 1,477
-------- --------- --------- -------- --------
Cash and Cash Equivalents at End of
Period............................... $ 130 $ 1,477 $ 15,436 $ 3,153 $ 7,985
======== ========= ========= ======== ========
Supplemental Cash Flow Information
Cash paid during the period for
Interest.......................... $ 35,402 $ 22,628 $ 18,187 $ 16,592 $ 15,311
======== ========= ========= ======== ========
Income taxes paid (refunded)......... $ 285 $ 140 $ (2,179) $ 20 $ 120
======== ========= ========= ======== ========
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE> 165
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
Organization -- In 1987, the sole shareholder of the Venture Group of
companies contributed all of the common stock of the companies to Venture
Holdings Trust (the Trust). Simultaneously, certain property, plant, and
equipment was contributed by the sole shareholder to certain companies owned by
the Trust. In exchange, the shareholder was named the sole beneficiary of the
Trust.
The companies included in the Trust are Venture Industries Corporation,
Venture Mold and Engineering Corporation, Venture Industries Canada, Ltd.,
Vemco, Inc., Venture Leasing Company, Vemco Leasing, Inc., Venture Holdings
Corporation, Venture Service Company, Experience Management L.L.C. and any
predecessors to such organizations. Experience Management L.L.C. was formed late
in 1997 to assume the human resource obligations of the Trust. The companies
included in the Trust are involved in the design and manufacturing of molded
parts and systems integration for North American automotive original equipment
manufacturers. During 1996 the Trust acquired Bailey Corporation and its
subsidiaries ("Bailey") which were merged into Venture Holdings Corporation in
July of 1997. During 1996, the trust acquired the assets of AutoStyle Plastics,
Inc. ("AutoStyle") which was merged into Vemco, Inc. in July of 1997.
The Trust has been established as a grantor trust. The Trust received a
private letter ruling from the Internal Revenue Service confirming that the
Trust meets the requirements of a grantor trust under Section 1361(c)(2)(A)(i)
of the Internal Revenue Code.
Principles of Consolidation -- The consolidated financial statements
include the accounts of Venture Holdings Trust and its wholly owned subsidiaries
(collectively the "Company"). All intercompany accounts and transactions have
been eliminated.
The consolidated financial statements include only those assets and
liabilities which relate to the business of Venture Holdings Trust. These
statements do not include any assets or liabilities attributable to the
beneficiary's individual activities. However, the Company does enter into
various transactions with companies in which the sole beneficiary has an
interest. These transactions are summarized in Note 7 -- Related Party
Transactions.
Estimates -- The preparation of the Company's financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents -- Highly liquid investments with an initial
maturity of three months or less are classified as cash equivalents.
Inventories -- Manufactured parts inventories are stated at the lower of
cost or market using the first-in, first-out method. Inventory also includes
costs associated with building molds under contract. Molds owned by the Company
and used in the Company's manufacturing operations are transferred to tooling,
in property, plant and equipment, when the molds are operational.
Property and Depreciation -- Property, plant, and equipment are recorded at
cost. Depreciation is computed by the straight-line method over the estimated
useful lives of the various classes of assets.
F-7
<PAGE> 166
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Tooling is amortized on a piece price or straight line basis over the related
production contract, generally 3 to 7 years. The principal estimated useful
lives are as follows:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Building and improvements................................... 10-40
Machinery and equipment, and automobiles.................... 3-20
</TABLE>
Leasehold improvements are amortized over the useful life or the term of
the lease, whichever is shorter. Expenditures for maintenance and repairs are
charged to expense as incurred.
Intangible Assets -- The purchase price of companies in excess of the fair
value of net identifiable assets acquired ("goodwill") is amortized over 30
years using the straight-line method. The amount reported at March 31, 1999
(unaudited), December 31, 1998 and 1997 was $51.6 million, $52.0 million and
$53.9 million, respectively, which is net of accumulated amortization.
Long-Lived Assets and Long-Lived Assets to be Disposed of -- Effective
January 1, 1996, Statement of Financial Accounting Standards ("SFAS") No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" was adopted. This Statement establishes accounting standards for
the impairment of long-lived assets, and certain identifiable intangibles, and
goodwill related to those assets to be held and used and long-lived and certain
identifiable intangibles to be disposed of. The statement requires that
long-lived assets and certain identifiable intangibles to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. In
addition, the Statement requires that certain long-lived assets and identifiable
intangibles to be disposed of be reported at the lower of carrying amount or
fair value less cost to sell. The Company periodically evaluates the carrying
value for impairment, such evaluations are based principally on the undiscounted
cash flows of the operations to which the asset is related.
Revenue Recognition -- Revenue from the sale of manufactured parts is
recognized when the parts are shipped. Revenue from mold sales is recognized
using the completed contract method due to the reasonably short build cycle.
Accounts receivable includes unbilled receivables for mold contracts that are
substantially complete. The amounts are billed when final approval has been
received from the customer or in accordance with contract terms. Provision for
estimated losses on uncompleted contracts, if any, is made in the period such
losses are identified.
Other Assets -- Deferred financing costs are included in other assets and
are amortized over the life of the related financing arrangement.
Program Costs -- Certain costs incurred for the design of components to be
built for customers are recorded as deferred program costs which are included in
other assets. These costs are recovered based on units produced in each year
over the term of production contracts.
Income Taxes -- Amounts in the financial statements relating to income
taxes relate to the subsidiaries that have not elected S corporation status and
are calculated using the Statement of Financial Accounting Standards Board No.
109, "Accounting for Income Taxes" (SFAS 109).
Other significant subsidiaries have elected to be taxed as S corporations
under the Internal Revenue Code. The beneficiary is required to report all
income, gains, losses, deductions, and credits of the S corporations included in
the Trust on his individual tax returns.
F-8
<PAGE> 167
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Separate Financial Statements -- Separate financial statements for the
Trust and each Subsidiary are not included in this report because each entity
(other than Venture Canada and Experience Management L.L.C.) is jointly and
severally liable for the Company's senior credit facility and senior notes, and
each entity (including Venture Canada but excluding Experience Management
L.L.C.) is jointly and severally liable for the Company's senior subordinated
notes either as a co-issuer or as a guarantor. In addition, the aggregate total
assets, net earnings and net equity of the Subsidiaries of the Trust (with or
without Venture Canada and Experience Management L.L.C.) are substantially
equivalent to the total assets, net earnings and net equity of the Company on a
consolidated basis. Venture Canada and Experience Management L.L.C. represent
less than 1% of total assets, net earnings, net trust principal and operating
cash flow.
Derivative Financial Instruments -- Interest rate swaps are utilized to
reduce the sensitivity of earnings to various market risk and manage funding
costs. The primary market risk includes fluctuations in interest rates and
variability in spread relationships (i.e. Prime vs. LIBOR spreads). Interest
rate swaps are used to change the characteristics of its variable rate
exposures. Interest rate differentials resulting from interest rate swap
agreements used to change the interest rate characteristics are recorded on an
accrual basis as an adjustment to interest expense as part of operating
activities. In the event of early termination of an interest rate swap agreement
designated as a hedge, the gain or loss is deferred, and recognized as an
adjustment to interest expense over the remaining term of the underlying debt.
Reclassifications -- Certain reclassifications have been made to the 1997
financial statements in order to conform to the 1998 presentation.
Recent Accounting Pronouncements -- In June 1997, the Financial Accounting
Standards Board (FASB) approved SFAS No. 130, "Reporting Comprehensive Income"
and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 130 establishes accounting standards for reporting and
displaying comprehensive income and its components (revenues, expenses, gains
and losses). The Company has adopted this Standard in the financial statements
(Note 10). SFAS No. 131 establishes accounting standards for the way public
enterprises report information about operating segments in annual financial
statements. This statement also establishes standards for related disclosures
about products and services, geographic areas, and major customers. The Company
has adopted this accounting standard; however, there was no impact on the
Company's financial statement presentation and disclosures because it operates
in only one segment, automotive operations.
In February 1998, the FASB approved SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits," which standardizes the
disclosure requirements for pension and other postretirement benefits. In
particular, the Standard requires additional information on changes in the
benefit obligation and fair values of plan assets. The Company has adopted this
Standard in the presentation of its financial statements (Note 10).
In June 1998, the FASB approved SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value. The
Standard is effective for the first quarter of the Company's fiscal year
beginning January 1, 2000. The Company has not yet determined the impact of
adopting this Standard on its financial position or results of operations.
F-9
<PAGE> 168
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In March 1998, the Accounting Standards Executive committee published
accounting Statement of Position (SOP) 98-1, which provides guidance on
accounting for the costs of computer software developed or obtained for internal
use. The provisions of this SOP are applicable for the Company's fiscal year
beginning January 1, 1999. The Company does not anticipate that adoption of this
Standard will have a material impact on its financial position or results of
operations.
SOP 98-5, Reporting on the Costs of Start-Up Activities, was issued in
April 1998. SOP 98-5 establishes standards for the financial reporting of
start-up costs and organization costs and requires such costs to be expensed as
incurred. SOP 98-5 is effective for fiscal years beginning after December 15,
1998. The Company has not yet determined the impact of adopting SOP 98-5 on its
financial condition or results of operations.
2. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------- MARCH 31,
1998 1997 1999
-------- -------- -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Accounts receivable (including related parties)........ $172,759 $140,003 $182,889
Unbilled mold contract receivables..................... 21,894 24,726 22,353
-------- -------- --------
194,653 164,729 205,242
Allowance for doubtful accounts........................ (4,518) (3,572) (5,175)
-------- -------- --------
Net accounts receivable................................ $190,135 $161,157 $200,067
======== ======== ========
</TABLE>
Excluding receivables from related parties, substantially all of the
receivables are from companies operating in the automobile industry.
3. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31
------------------ MARCH 31,
1998 1997 1999
------- ------- -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Raw material............................................. $25,169 $26,036 $22,900
Work-in-process -- manufactured parts.................... 2,965 2,863 2,952
Work-in-process -- molds................................. 11,436 10,922 15,002
Finished goods........................................... 11,569 12,795 12,434
------- ------- -------
Total.......................................... $51,139 $52,616 $53,288
======= ======= =======
</TABLE>
F-10
<PAGE> 169
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Land...................................................... $ 2,418 $ 2,427
Building and improvements................................. 64,459 62,538
Leasehold Improvements.................................... 13,970 12,090
Machinery and equipment................................... 225,687 219,767
Tooling/Molds............................................. 12,026 8,659
Office and transportation equipment....................... 5,963 6,373
Construction in progress.................................. 4,009 7,421
-------- --------
328,532 319,275
Less accumulated depreciation and amortization............ 127,988 113,510
-------- --------
Total..................................................... $200,544 $205,765
======== ========
</TABLE>
Included in property, plant and equipment is equipment and buildings held
under capitalized leases. These assets had a cost basis of $9.4 million and
accumulated depreciation relating to these assets of $2.6 million at December
31, 1998. As of December 31, 1997, these assets had a cost basis of $12.7
million and accumulated depreciation of $4.0 million.
5. BUSINESS ACQUISITIONS
Effective August 26, 1996, the Trust acquired Bailey, a manufacturer of
high quality molded plastic exterior components for sale to automobile
manufacturers for an aggregate purchase price of $57 million. This acquisition
price was the cost to acquire all of the outstanding shares of the company at
$8.75 per share including all of the outstanding options and warrants. The
acquisition was accounted for as a purchase with the purchase price allocated
over the estimated fair value of the assets and liabilities assumed, resulting
in goodwill of approximately $53.8 million. The goodwill is being amortized over
30 years using the straight-line method. Bailey was merged into Venture Holdings
Corporation in July of 1997.
Effective June 3, 1996, the Company acquired certain assets from AutoStyle
for a purchase price of $6.7 million and entered into a capital lease for all
property, plant and equipment. The acquisition was accounted for as a purchase
with the purchase price allocated over the estimated fair value of the assets
and liabilities assumed, resulting in goodwill of $2.6 million. The goodwill is
being amortized over 30 years using the straight-line method.
The consolidated earnings includes the operations of Bailey from August 26,
1996 and the operations for AutoStyle from June 3, 1996.
F-11
<PAGE> 170
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Unaudited pro forma results of operations represent the consolidation of
historical results for the twelve months ended December 31, 1996, assuming the
acquisition of Bailey had occurred at January 1, are as follows (in thousands):
<TABLE>
<S> <C>
Net sales................................................... $471,118
Net (loss) before extraordinary item........................ (887)
Net (loss).................................................. (3,402)
</TABLE>
The Bailey transaction had the following non-cash impact on the Company's
balance sheet at August 26, 1996 (in millions):
<TABLE>
<S> <C>
Current assets.............................................. $ 62
Non-current assets.......................................... 143
Current liabilities......................................... 159
Non-current liabilities..................................... 46
</TABLE>
6. DEBT
Debt consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------- MARCH 31,
1998 1997 1999
-------- -------- ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Revolving credit agreement........................... $ 77,000 $ 45,000 $ 75,000
Registered senior notes payable with interest at
9.5%............................................... 205,000 205,000 205,000
Registered senior subordinated notes payable with
interest at 9.75%.................................. 78,940 78,940 78,940
Capital leases with interest at 8.25% to 11.5%....... 2,196 5,023 2,056
Installment notes payable with interest at 5.85% to
11.75%............................................. 1,803 2,225 1,660
-------- -------- --------
Total........................................... 364,939 336,188 362,656
Less current portion of debt....................... 1,565 3,122 1,588
-------- -------- --------
Total........................................... $363,374 $333,066 $361,068
======== ======== ========
</TABLE>
In the third quarter of 1997, the Trust, and each of its wholly owned
subsidiaries, other than Venture Industries Canada, Ltd. and Experience
Management L.L.C., which was not in existence at the time, (collectively, the
"Issuers") issued $205 million of Senior Notes. The net proceeds of $199 million
were used to repay Term loans and the amount outstanding under the revolving
credit portion of the Senior Credit Agreement. In connection with the issuance
of the Senior Notes, certain subsidiaries were merged and or liquidated into
other subsidiaries. On August 27, 1997, the Issuers filed a registration
statement on Form S-4 registering the Issuers' Series B 9 1/2% Senior Notes due
2005 (the "Registration Statement"), to be offered in exchange for the Senior
Notes. The Registration Statement was declared effective by the Securities and
Exchange Commission on October 29, 1997.
F-12
<PAGE> 171
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Simultaneously with the issuance of the Senior Notes, the Senior Credit
Agreement was amended and now provides for borrowings of up to the lesser of a
borrowing base or $200 million under a revolving credit facility. The annual
interest rate for borrowings under this agreement is a floating rate based upon
LIBOR or the banks prime rate which averaged 7.8% at December 31, 1998. The
Company must pay a fee of up to .5% of the unused portion of the commitment. The
Company has issued letters of credit of approximately $3.0 million at December
31, 1998 against this agreement, thereby reducing the maximum availability to
$197.0 million, and pursuant to the borrowing base formula could have borrowed
$120.4 million, of which $77.0 million was outstanding thereunder.
The Trust has agreed to guarantee up to $3.5 million of obligations of a
related party. In a separate transaction, a different related party agreed to
fully indemnify the Trust for all amounts paid under the guarantee.
The senior credit agreement, senior notes and the senior subordinated notes
contain certain restrictive covenants relating to cash flow, fixed charges,
debt, trust principal, trust distributions, leases, and liens on assets. The
Company's debt obligations contain various restrictive covenants that require
the Company to maintain stipulated financial ratios, including a minimum
consolidated net worth (adjusted yearly), fixed charge coverage ratio, interest
coverage ratio and total indebtedness ratio. As of December 31, 1998, the
Company was in compliance with all debt covenants.
See also Note 12 -- Extraordinary Items for information related to the
early retirement of debt.
Scheduled maturities of debt at December 31, 1998 were as follows (in
thousands):
<TABLE>
<S> <C>
1999........................................................ $ 1,565
2000........................................................ 976
2001........................................................ 887
2002........................................................ 558
2003........................................................ 77,013
Remaining years............................................. 283,940
--------
Total....................................................... $364,939
========
</TABLE>
To mitigate risk associated with changing interest rates on certain debt,
the Company entered into interest rate swap agreements. The notional amounts are
used to measure the volume of these agreements and do not represent exposure to
credit loss. The impact of interest rate swap agreements resulted in $0.6
million of additional interest expense in each of 1997 and 1998.
F-13
<PAGE> 172
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
NOTIONAL NOTIONAL
AMOUNTS AMOUNTS
OUTSTANDING OUTSTANDING
AND WEIGHTED AND WEIGHTED
VARIABLE AVERAGE RATES AVERAGE RATES
RATE MATURING DECEMBER 31, DECEMBER 31,
UNDERLYING FINANCIAL INSTRUMENT INDEX THROUGH 1998 1997
- ------------------------------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Pay Fixed Interest Rate Swaps Term Loans..... LIBOR 2001 $55,000,000 $55,000,000
Weighted average pay rate.................... FIXED 2001 6.75% 6.75%
Weighted average receive rate................ LIBOR 2001 5.31% 5.70%
</TABLE>
7. RELATED PARTY TRANSACTIONS
The Company has entered into various transactions with entities that the
sole beneficiary owns or controls. These transactions include leases of real
estate, usage of machinery, equipment, and facilities, purchases and sales of
inventory, performance of manufacturing related services, administrative
services, insurance activities and the receipt and payment of sales commissions.
In addition, employees of the Company are made available to certain of these
entities for services such as design, model and tool-building. Since the Company
operates for the benefit of the sole beneficiary, the terms of these
transactions are not the result of arms'-length bargaining; however, the Company
believes that such transactions are on terms no less favorable to the Company
than would be obtained if such transactions or arrangements were arms'-length
transactions with non-affiliated persons.
The Company provides or arranges for others to provide certain related
parties with various administrative and professional services, including
employee group insurance and benefit coverage, property and other insurance,
financial and cash management and administrative services such as data
processing. The related parties are charged fees and premiums for these
services. Administrative services were allocated to the entity for which they
were incurred and certain entities were charged a management fee.
In connection with the above mentioned cash management services, the
Company pays the administrative and operating expenses on behalf of certain
related parties and charges them for the amounts paid which results in
receivables from these related parties.
The Company purchased from Pompo Insurance & Indemnity Company Ltd.
("Pompo"), a corporation indirectly owned by the sole beneficiary, insurance to
cover certain medical claims by the Company's covered employees and certain
workers compensation claims. The Company remains an obligor for any amounts in
excess of insurance coverage or any amounts not paid by Pompo under these
coverages. If a liability is settled for less than the amount of the premium a
portion of the excess is available as a premium credit on future insurance. The
Company has accounted for this arrangement using the deposit method wherein the
full amount of the estimated liability for such claims is recorded in other
liabilities and the premiums paid to Pompo are recorded in other assets until
such time that the claims are settled. The Company made an additional payment of
$613 thousand to Pompo in 1998, and no payments in 1997. At December 31, 1998
and 1997, the Company had approximately $3.4 million and $2.8 million,
respectively, on deposit with Pompo. A portion of this amount was invested on a
short term basis with a related party.
F-14
<PAGE> 173
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deluxe Pattern Corporation (Deluxe) provided design, model and prototyping
services to the Company of $6.6, $9.2, and $4.3 million in 1998, 1997 and 1996,
respectively. The Company charged approximately $1.1 million each year from
Deluxe in 1998, 1997 and 1996 for equipment rentals and services. Employees of
the Company made available to Deluxe on an as-needed basis, for which the
Company charged Deluxe $9.6, $4.6, and $17.3 million in 1996, 1997 and 1998,
respectively. These charges and the cash management services provided to Deluxe
by the Company result in a net receivable from Deluxe.
The Company leases buildings and machinery and equipment that have a book
value of approximately $460 thousand to an entity in which the sole beneficiary
owns a significant equity interest. During 1998, 1997 and 1996, the Company
received $162 thousand per year, in connection with this agreement.
Venture Sales and Engineering (VS&E) and Venture Foreign Sales Corporation,
corporations wholly owned by the sole beneficiary, serve as the Company's sales
representatives. The Company pays Venture Sales and Engineering and Venture
Foreign Sales Corporation, in the aggregate, a sales commission of 3% on all
production sales. VS&E has conducted sales and marketing activities around the
world for the Company and has been advanced certain funds in order to carry on
that work on behalf of the Company. These activities result in a net receivable
from VS&E.
The Company provided management services to Venture Asia Pacific Pty. Ltd.
(VAP) and its subsidiaries and corporations wholly owned by the sole
beneficiary. The Company billed management fees and commissions totaling $4.5,
$4.0 and $5.1 million to VAP in 1998, 1997 and 1996, respectively. In addition,
VAP is also liable to the Company for expenditures made on its behalf including
tooling costs associated with a long-term program to be launched in 1999. The
Company expects to receive payment on these receivables once final approval is
received from the end OEM customer.
F-15
<PAGE> 174
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following is a summary of transactions with all related parties at
December 31, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997 1996
------- ----------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenue for:
Materials sold, tooling sales, sales commission and
rent charged...................................... $18,974 $17,349 $ 2,123
Providing administrative services.................... 0 0 149
Insurance and benefit Premiums....................... 0 166 420
Management Fees...................................... 4,533 4,028 5,098
Subcontracted services................................. 2,324 2,686 9,632
Manufacturing related services and inventory
purchased............................................ 8,084 10,213 11,683
Rent expense paid...................................... 2,180 3,195 2,950
Machine and facility usage fees paid................... 4,158 3,748 3,397
Commission expense paid................................ 10,391 7,269 6,391
Litigation, workers compensation and medical insurance
premiums............................................. 613 0 0
Property, Plant and Equipment purchased................ 40 0 49
</TABLE>
The result of these related party transactions is a net receivable, which
is included in accounts receivable as follows:
<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31,
1998 1997 1999
------- ------- -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>
Amounts Receivable...................................... $65,755 $36,690 $70,386
Amounts Payable......................................... 9,107 4,430 10,508
------- ------- -------
Net Amounts Receivable.................................. $56,648 $32,260 $59,878
======= ======= =======
</TABLE>
In accordance with the Company's debt agreements, payments are permitted to
be made to the Company's sole beneficiary for income tax payments and may be
made as a bonus payment or distribution of Trust Principal. The payments for the
years ended December 31, 1998, 1997 and 1996 were recorded as expense.
F-16
<PAGE> 175
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
8. COMMITMENTS AND CONTINGENCIES
Operating Leases -- The Trust leases certain machinery and equipment under
operating leases which have initial or remaining terms of one year or more at
December 31, 1998. Future minimum lease commitments, including related party
leases, are as follows (in thousands):
<TABLE>
<CAPTION>
RELATED
PARTY OTHER
OPERATING OPERATING
LEASES LEASES
--------- ---------
<S> <C> <C>
Years:
1999....................................................... 2,180 494
2000....................................................... 0 186
2001....................................................... 0 25
------ ----
Total................................................. $2,180 $705
====== ====
</TABLE>
Rent expense for operating leases and other agreements with a term of
greater than one month, including amounts paid to related parties, was $5.5
million, $6.3 and $5.0 million for the years ended December 31, 1998, 1997, and
1996, respectively. Usage fees paid based on monthly usage of certain machinery
and equipment and facilities, all of which were paid to related parties, were
$4.0 million, $3.6, and $3.4 million for the years ended December 31, 1998, 1997
and 1996, respectively.
Litigation -- In December of 1997, the Company settled litigation with the
contractor that built the paint line at Vemco, Inc. for $2.0 million. Of this
amount, $0.8 million was recorded as a reduction to the carrying value of the
paint line and $1.2 million was recorded as miscellaneous income.
Resolution of Commercial Issues -- During the fourth quarter of 1998, the
Company resolved several commercial issues which resulted in the recovery of
gross profit lost during current and prior years. The resolution of these issues
resulted in an addition $7.4 million of gross profit.
Environmental Costs -- The Company is subject to potential liability under
government regulations and various claims and legal actions which are pending or
may be asserted against the Company concerning environmental matters. Estimates
of future costs of such environmental matters are necessarily imprecise due to
numerous uncertainties, including the enactment of new laws and regulations, the
development and application of new technologies, the identification of new sites
for which the Company may have remediation responsibility and the apportionment
and collectibility of remediation costs among responsible parties. The Company
establishes reserves for these environmental matters when a loss is probable and
reasonably estimable. The Company's reserves for these environmental matters
totaled $1.3 million at December 31, 1998 and $1.3 million at December 31, 1997.
On February 23, 1998, the Attorney General of the State of Michigan and the
Michigan Department of Environmental Quality (MDEQ) instituted legal proceedings
in state court alleging violations by the Company of current permits regarding
the level of emissions and odors discharged from its Grand Blanc paint facility.
These proceedings seek and may result in the imposition of civil penalties of up
to $10,000 per day; the total amount is not reasonably estimable given the
current status of the proceedings. Emission levels are being evaluated as part
of the proceedings, and it is
F-17
<PAGE> 176
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
possible the Company may be required to make capital expenditures of $2 to $5
million to the current systems to come into compliance. During the first quarter
of 1999, the U.S. Environmental Protection Agency has issued a notice of
violation and taken an active role in monitoring the legal proceeding and may
take action separate and distinct from the legal proceedings begun by the State
of Michigan and MDEQ.
The Company is party to various contractual, legal and environmental
proceedings, some which assert claims for large amounts. Although the ultimate
cost of resolving these matters could not be precisely determined at December
31, 1998, management believes, based on currently known facts and circumstances,
that the disposition of these matters will not have a material adverse effect on
the Company's consolidated financial position and results of operations. These
matters are subject to many uncertainties, and the outcome of individual matters
is not predictable with assurance. It is more than remote but less than likely
that the final resolution of these matters may require the Company to make
expenditures, in excess of established reserves, over an extended period of time
and in a range of amounts that cannot be reasonably estimated. The Company's
reserves have been set based upon a review of costs that may be incurred after
considering the creditworthiness of guarantors and/or indemnification from third
parties which the Company has received. The Company is not covered by insurance
for any unfavorable environmental outcomes, but relies on the established
reserves, guarantees and indemnifications it has received.
9. CONCENTRATIONS
The Company's sales to General Motors Corporation ("GM"), Ford Motor
Company ("Ford") and DaimlerChrysler Corporation ("DaimlerChrysler"), expressed
as a percentage of sales, were 41%, 16% and 12%, respectively, in 1996. For
1997, the percentages were 40% and 27% for GM and Ford, respectively, and less
than 10% for DaimlerChrysler. For 1998, the percentages were 38%, 23% and 15%
for GM, Ford and DaimlerChrysler, respectively. Many of the Company's automotive
industry customers are unionized and work stoppages, slow-downs experienced by
them, and their employee relations policies could have an adverse effect on the
Company's results of operations. Net sales during the second and third quarters
of 1998 were impacted negatively due to strikes at certain General Motors
plants. The Company believes that a portion of these lost sales were recouped in
the fourth quarter of 1998 as GM accelerated production to refill its
distribution channels. Approximately 11% of the Company's workforce is covered
by a collective bargaining agreement which will expire within one year.
10. PENSIONS, PROFIT-SHARING AND SALARY REDUCTION PLAN
The Company sponsors profit-sharing and salary reduction 401(k) plans which
cover substantially all employees. The plans provide for the Company to
contribute a discretionary amount each year. Contributions were $2.3, $2.2 and
$1.3 million for the years ended December 31, 1998, 1997 and 1996, respectively.
Bailey has various retirement plans covering substantially all employees,
including five defined benefit pension plans covering full-time hourly and
salaried employees. The benefits payable under the plans are generally
determined based on the employees' length of service and earnings. For all these
plans the funding policy is to make at least the minimum annual contributions
required by Federal law and regulation.
F-18
<PAGE> 177
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The change in benefit obligation for the years ended December 31, 1998 and
1997 was as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Benefit obligation at beginning of year..................... $15,980 $14,861
Service cost................................................ 543 321
Interest cost............................................... 1,120 1,069
Curtailment gain............................................ (648)
Amendments.................................................. 599
Actuarial loss (gain)....................................... 1,771 (365)
Benefits paid............................................... (536) (505)
------- -------
Benefit obligation at end of year........................... $18,230 $15,980
======= =======
</TABLE>
The change in the market value of plan assets for the years ended December
31, 1998 and 1997 was as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Market value of plan assets at beginning of year............ $14,026 $11,528
Actual return on plan assets................................ 105 2,531
Employer contribution....................................... 660 472
Benefits paid............................................... (536) (505)
------- -------
Market value of plan assets at end of year.................. $14,255 $14,026
======= =======
</TABLE>
F-19
<PAGE> 178
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The funded status of the defined benefit plans at December 31, 1998 was as
follows (in thousands):
<TABLE>
<CAPTION>
ASSETS ACCUMULATED
EXCEED BENEFITS
ACCUMULATED EXCEED
BENEFITS ASSETS
----------- -----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested Benefits...................................... $ 3,017 $15,078
Nonvested benefits................................... 33 102
Accumulated benefit obligation......................... $ 3,050 $15,180
======= =======
Projected benefit obligation........................... $ 3,050 $15,180
Market value of plan assets............................ 3,891 10,364
------- -------
Excess (deficiency) of assets over projected benefit
obligation........................................... 841 (4,816)
Unrecognized net (gain) loss........................... (928) 1,232
Unrecognized prior service cost........................ 519
Additional minimum liability........................... (1,751)
------- -------
Accrued pension cost................................... $ (87) $(4,816)
======= =======
</TABLE>
The funded status of the defined benefit plans at December 31, 1997 was as
follows (in thousands):
<TABLE>
<CAPTION>
ASSETS ACCUMULATED
EXCEED BENEFITS
ACCUMULATED EXCEED
BENEFITS ASSETS
----------- -----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested Benefits...................................... $ 5,151 $10,003
Nonvested benefits................................... 42 70
------- -------
Accumulated benefit obligation......................... $ 5,193 $10,073
======= =======
Projected benefit obligation........................... $ 5,907 $10,073
Market value of plan assets............................ 6,996 7,030
------- -------
Excess (deficiency) of assets over projected benefit
obligation........................................... 1,089 (3,043)
Unrecognized net loss.................................. (1,736) (892)
Unrecognized prior service cost........................ 0 559
------- -------
Accrued pension cost................................... $ (647) $(3,376)
======= =======
</TABLE>
F-20
<PAGE> 179
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Net periodic pension (benefit) expense for the years ended December 31,
1998 and 1997 included the following components (in thousands):
<TABLE>
<CAPTION>
1998 1997
------- ------
<S> <C> <C>
Service cost benefit during the year........................ $ 543 $ 321
Interest cost on projected benefit obligation............... 1,120 1,069
Expected return on plan assets.............................. (1,174) (961)
Net amortization and deferral............................... (52) (22)
Curtailment gain............................................ (648)
------- ------
Net periodic pension (benefit) expense...................... $ (211) $ 407
======= ======
</TABLE>
The date used to measure plan assets and liabilities is as of September 30
each year.
The weighted-average assumed discount rate was 6.5% and 7.25% for 1998 and
1997, respectively. The assumed rate of return on plan assets was 8.5% for 1998
and 1997. For salary based plans, the expected rate of increase in compensation
levels was 5.5% for 1998 and 1997.
At December 31, 1998, the Company recorded an intangible pension asset of
$519 thousand as an offset to recording the additional minimum pension
liability. An additional amount of $737 thousand was recorded (net of tax)
against equity at December 31, 1998, which represented the minimum pension
liability in excess of unrecognized prior service cost.
Plan assets consist principally of cash and cash equivalents, listed common
stocks, debentures, and fixed income securities.
A salaried pension plan has been frozen since 1992, and no further service
liability will accrue under the plan. During 1998, an additional salaried
pension plan and an hourly pension plan were frozen, and no further service
liability will accrue under these plans. The freezing of the salaried pension
plan resulted in a curtailment gain of approximately $648,000 and has been
included in the calculation of the net periodic pension benefit for the year
ended December 31, 1998. The freezing of the hourly plan did not result in a
curtailment gain or loss since the accumulated and projected benefit obligation
for this plan are equal.
Effective January 1, 1999, the three frozen plans were merged into one
plan. The merged plan will eventually be terminated.
11. INCOME TAXES
Amounts in the financial statements related to income taxes are for the
operations of Bailey. The other significant Subsidiaries have elected S
corporation status under the Internal Revenue Code. The beneficiary is required
to report all income, gains, losses, deductions, and credits of the S
corporations included in the Trust on his individual tax returns.
F-21
<PAGE> 180
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The provision for income tax expense for the period ended (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Currently Payable
United States................................ $ 80 $ 0 $ 0
State and Local.............................. 0 239 0
Foreign...................................... 16 0 0
------ ------ ----
Total..................................... $ 96 $ 239 $ 0
====== ====== ====
Deferred
United States................................ $1,618 $2,716 $293
State and Local.............................. 240 403 43
------ ------ ----
Total..................................... $1,858 $3,119 $336
====== ====== ====
</TABLE>
The Company does not provide for U.S. income taxes or foreign withholding
taxes on cumulative undistributed earnings of foreign subsidiaries as these
earnings are all taxed currently to the beneficiary of the Trust.
The effective tax rate on pretax income was 70.4% for the year ended
December 31, 1998, of which 29.9% relates to permanent differences not
deductible for income taxes (primarily goodwill amortization)and 5.2% for state
and local income taxes, net of the federal tax benefit. The effective tax rate
on pretax income was 58.3% for the year ended December 31, 1997, of which 18.1%
relates to permanent differences not deductible for income taxes and 5.2% for
state and local income taxes, net of the federal tax benefit. The effective tax
rate on pretax income was 232.7% for the year ended December 31, 1996, of which
192.5% relates to permanent differences not deductible for income taxes and 5.2%
for state and local income taxes, net of the federal tax benefit.
F-22
<PAGE> 181
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The tax-effected temporary differences and carryforwards which comprised
deferred assets and liabilities were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Deferred tax assets:
Accrued expenses and reserves...................... $ 7,372 $ 8,920
Net Operating Loss carryforward.................... 9,750 11,497
Minimum tax credit carryforward.................... 844 764
Other.............................................. 750 293
------- -------
Total deferred tax assets....................... $18,716 $21,474
------- -------
Deferred tax liabilities:
Depreciation....................................... 11,931 12,505
Other.............................................. 24 845
------- -------
Total deferred tax liabilities.................. 11,955 13,350
------- -------
Net deferred tax asset.......................... $ 6,761 $ 8,124
======= =======
</TABLE>
The current portion of deferred tax assets, $6.9 and $7.0 million is
included in prepaid expense and other at December 31, 1998 and 1997,
respectively. Bailey's U.S. net operating loss carryforwards, which totaled
$26.4 and $29.9 million at December 31, 1998 and 1997, begin to expire in the
year 2011. Alternative minimum tax credit carryforwards totaled $0.8 million at
December 31, 1998 and have no expiration date. Management believes the net
operating loss carryforwards at December 31, 1998 are realizable based on
forecasted earnings and available tax planning strategies.
12. EXTRAORDINARY ITEMS
The senior secured notes payable to financial institutions required
semiannual interest payments at 9.89% and annual principal payments of $10
million each year commencing March 15, 1996. The outstanding balance of $40
million was refinanced on August 26, 1996 which resulted in an extraordinary
loss of $3.4 million ($2.5 million prepayment penalty plus unamortized deferred
financing costs of $0.9 million) in the quarter ended September 30, 1996.
On September 23, 1996 the Company redeemed approximately $21 million of the
senior subordinated bonds at 95% of par in conjunction with the refinancing
under the new credit agreement for acquisition of Bailey Corporation as required
by the First Supplement Indenture. The early extinguishment resulted in an
extraordinary gain of $688 thousand (net of unamortized deferred financing costs
of $365 thousand).
13. FINANCIAL INSTRUMENTS
The estimated fair values of the Company's debt instruments have been
determined using available market information. However, considerable judgment is
required in interpreting market data to develop the estimates of fair value.
Accordingly, the estimates presented herein may not be indicative of the amounts
that the Company could realize in a current market exchange. The use of
F-23
<PAGE> 182
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
different assumptions or valuation methodologies may have a material effect on
the estimated fair value amounts. The fair value of long-term debt was estimated
using quoted market prices (in thousands).
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- -------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Debt............................................. $283,940 $282,126 $283,940 $287,626
</TABLE>
The fair values of interest rate swaps were estimated by discounting
expected cash flows using quoted market interest rates. Interest rate swaps are
also discussed in Note 1.
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------------- -------------------------
NOTIONAL UNREALIZED NOTIONAL UNREALIZED
AMOUNT GAIN/(LOSSES) AMOUNT GAIN/(LOSSES)
-------- ------------- -------- -------------
<S> <C> <C> <C> <C>
Interest Rate Swaps.................... $55,000 $(2,020) $55,000 $(1,367)
</TABLE>
The carrying values of cash and cash equivalents, accounts receivable,
accounts payable and the Senior Credit Facility approximate fair market value
due to the short-term maturities of these instruments.
14. ACQUISITION (UNAUDITED)
On March 8, 1999, the Company entered into an agreement to acquire Peguform
GmbH ("Peguform"), a leading European supplier of high performance interior and
exterior plastic modules, systems and components to European OEMs (the "Peguform
Acquisition"). Consummation of the Peguform Acquisition is subject to only
limited conditions, including approval of the shareholders of Klockner-Werke AG,
the parent of Peguform, and receipt of regulatory approvals. The purchase
agreement does not permit the Company to terminate the transaction, even if
there has been a material adverse change in the business of Peguform from the
date of signing the purchase agreement to closing, which is currently expected
to occur no later than May 31, 1999.
The Company has executed commitment letters with subsidiaries of Bank One
Corporation and Goldman Sachs Credit Partners, L.P., pursuant to which such
entities have committed, subject to certain conditions, to provide financing for
the Peguform Acquisition.
The aggregate purchase price of the Peguform Acquisition is approximately
DEM 850 million (approximately $459.1 million as of April 30, 1999), reduced by
the amount of certain indebtedness for borrowed money, and subject to
post-closing adjustments. In addition, the Company estimates an additional $28.2
million of fees, expenses and post-closing adjustments associated with the
Peguform Acquisition. The Company expects to complete the Peguform Acquisition
on or about May 31, 1999. The Peguform Acquisition will be accounted for as a
purchase.
In connection with the Peguform Acquisition, the Company expects to enter
into an amended and restated credit agreement (the "New Credit Agreement"). The
New Credit Agreement will provide for borrowings of (1) up to $200.0 million
under a Revolving Credit Facility, which, in addition to those matters described
below, will be used for working capital and general corporate purposes; (2)
$100.0 million under a five-year Term Loan A; and (3) $150.0 million under a
six-year Term Loan B. The Revolving Credit Facility will permit the Company to
borrow up to the lesser of a
F-24
<PAGE> 183
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
borrowing base computed as a percentage of accounts receivable and inventory, or
$200.0 million less the amount of any letter of credit issued against the New
Credit Agreement. Pursuant to the borrowing base formula, as of December 31,
1998 the Company could have borrowed up to the maximum availability under the
Revolving Credit Facility.
Interest rates under the New Credit Agreement are based on the London
Interbank Offer Rate ("LIBOR"), Alternate Base Rate ("ABR"), which is the larger
of the bank's corporate base rate of interest announced from time-to-time or the
federal funds rate plus 1/2% per annum, and, in the case of non-dollar
denominated loans, a euro currency reference rate. Interest rates will be
determined by reference to the relevant interest rate option, plus an Applicable
Margin (as defined) based on the Company's Consolidated Ratio of Total Debt to
EBITDA. Obligations under the New Credit Agreement will be jointly and severally
guaranteed by the Trust's domestic subsidiaries and will be secured by first
priority security interests in substantially all of the assets of the Trust and
its domestic subsidiaries. The New Credit Agreement will contain certain
restrictive covenants, which we expect will be similar in nature to those in the
Company's current senior credit facility (the "Existing Credit Agreement"). The
New Credit Agreement will become effective contemporaneously with the completion
of the Peguform Acquisition.
In addition, the Company expects to offer an aggregate amount of up to
$375.0 million of unsecured senior subordinated notes and unsecured senior
notes. Proceeds from the offering of the notes, together with borrowings under
the New Credit Agreement will be used to (1) fund cash consideration paid in the
Acquisition; (2) redeem the Company's 9 3/4% Senior Subordinated Notes due 2004
at the redemption price of 104.875%, plus accrued interest; (3) refinance
amounts outstanding under the Existing Credit Agreement; (4) pay certain fees
and expenses related to the Peguform Acquisition and the offering of the notes;
and (5) fund working capital and other general corporate purposes.
After completing the Peguform Acquisition, the Company expects its budget
for capital expenditures during the remainder of 1999 to be approximately $70.0
million, which is expected to be financed either with cash generated from
operations or borrowings under the New Credit Agreement.
The Company expects, on or before the closing of the sale of the notes, to
enter into hedging obligations and interest rate swaps totalling approximately
$375.0 million which will have a maturity of 5 years. These hedging obligations
and interest rate swaps will effectively convert the Company's United States
dollar fixed rate coupon on the notes to a euro fixed rate coupon. These
instruments may not qualify for hedge accounting, which may result in non-cash
charges to earnings related to the mark to market on the swaps. The Company is
entering into this arrangement to take advantage of lower interest rates in
Europe and to hedge its exchange rate risk, however, no commitment is currently
in effect with respect to any such arrangements and no assurance can be given
that the Company will enter into such arrangements on the terms described or at
all.
F-25
<PAGE> 184
REPORT OF INDEPENDENT AUDITORS
To the Board of Management and
Shareholders of PEGUFORM GmbH
We have audited the accompanying consolidated balance sheets of PEGUFORM
GmbH and subsidiaries as of September 30, 1997 and 1998, and the related
consolidated statements of income, stockholders' equity and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements, based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in Germany, which are substantially the same as those followed in the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
PEGUFORM GmbH and subsidiaries as of September 30, 1997 and 1998 and the
consolidated results of their operations, changes in stockholders' equity and
cash flows for the years then ended in conformity with generally accepted
accounting principles in the United States.
Our audit also included the translation of Deutsche Mark amounts into U.S.
dollar amounts and, in our opinion, such translation has been made in conformity
with the basis stated in note 2. Such U.S. dollar amounts are presented solely
for the convenience of the readers.
Dusseldorf,
December 18, 1998, except for the adjustments according to U.S.
GAAP (see note 2), as to which the date is April 26, 1999
BDO International GmbH
Wirtschaftsprufungsgesellschaft
F-26
<PAGE> 185
PEGUFORM GMBH, BOTZINGEN
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1997 AND 1998 AND DECEMBER 31, 1998
(DEM IN THOUSANDS)
<TABLE>
<CAPTION>
THOUSANDS OF THOUSANDS OF
U.S. DOLLARS U.S. DOLLARS
(CONVENIENCE (CONVENIENCE
SEPTEMBER 30, TRANSLATION) TRANSLATION)
--------------------- SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1997 1998 1998 1998 1998
--------- --------- ------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents............... 3,486 4,964 2,961 13,869 8,272
Accounts receivable (note 4)............ 276,685 277,891 165,737 267,052 159,272
Inventories (note 5).................... 180,996 201,439 120,140 193,298 115,285
Deferred tax assets (note 13)........... 6,479 5,235 3,122 3,518 2,098
Prepaid expenses........................ 3,558 3,122 1,862 6,996 4,172
--------- --------- -------- --------- --------
Total current assets............... 471,204 492,651 293,822 484,733 289,099
Investment in associated company........ 6,431 7,665 4,571 8,245 4,918
Property, plant and equipment (note
6).................................... 488,218 535,199 319,198 523,166 312,021
Intangible assets....................... 74,894 65,206 38,889 65,949 39,332
Other assets............................ 3,866 5,244 3,128 5,449 3,251
Deferred tax assets (note 13)........... 4,073 6,063 3,616 5,054 3,014
--------- --------- -------- --------- --------
Total assets....................... 1,048,686 1,112,028 663,224 1,092,596 651,635
========= ========= ======== ========= ========
</TABLE>
F-27
<PAGE> 186
<TABLE>
<CAPTION>
THOUSANDS OF THOUSANDS OF
U.S. DOLLARS U.S. DOLLARS
(CONVENIENCE (CONVENIENCE
SEPTEMBER 30, TRANSLATION) TRANSLATION)
--------------------- SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1997 1998 1998 1998 1998
--------- --------- ------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of debt (note 9)........ 309,677 360,365 214,925 362,297 216,077
Accounts payable (note 8)............... 226,453 260,163 155,164 253,814 151,377
Accrued payroll......................... 56,781 63,500 37,872 55,096 32,860
Other accrued expenses.................. 37,267 25,105 14,973 22,114 13,189
Income taxes payable.................... 5,583 3,162 1,886 10,341 6,167
Deferred tax liabilities (note 13)...... 3,564 3,618 2,158 2,587 1,543
Other current liabilities and deferred
income................................ 20,278 12,979 7,741 12,227 7,292
--------- --------- -------- --------- --------
Total current liabilities.......... 659,603 728,892 434,719 718,476 428,505
Long term debt (note 9)................. 101,893 97,855 58,362 94,203 56,184
Accrual for pension obligations (note
12)................................... 39,458 44,913 26,786 46,277 27,600
Deferred tax liabilities (note 13)...... 20,847 20,432 12,186 13,480 8,040
Minority interest....................... 6,248 1,450 865 952 568
Other non current liabilities and
deferred income....................... 2,266 3,850 2,295 3,887 2,319
--------- --------- -------- --------- --------
Total liabilities.................. 830,315 897,392 535,213 877,275 523,216
--------- --------- -------- --------- --------
STOCKHOLDERS' EQUITY
Capital stock........................... 70,000 70,000 41,749 70,000 41,749
Additional paid in capital.............. 358,397 373,234 222,600 373,234 222,600
Deficit................................. (194,311) (209,995) (125,243) (209,392) (124,883)
Cumulative currency translation
adjustment............................ (14,628) (16,376) (9,767) (16,010) (9,549)
Accumulated other comprehensive income
(note 12)............................. (1,087) (2,227) (1,328) (2,511) (1,498)
--------- --------- -------- --------- --------
Total stockholders' equity......... 218,371 214,636 128,011 215,321 128,419
--------- --------- -------- --------- --------
Total liabilities and stockholders'
equity........................... 1,048,686 1,112,028 663,224 1,092,596 651,635
========= ========= ======== ========= ========
</TABLE>
F-28
<PAGE> 187
PEGUFORM GMBH, BOTZINGEN
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1997 AND 1998
AND THREE MONTHS ENDED DECEMBER 31, 1997 AND 1998
(DEM IN THOUSANDS)
<TABLE>
<CAPTION>
THOUSANDS OF
THOUSANDS OF U.S. DOLLARS
U.S. DOLLARS (CONVENIENCE
(CONVENIENCE TRANSLATION)
YEAR ENDED TRANSLATION) THREE MONTHS ENDED THREE MONTHS
SEPTEMBER 30, YEAR ENDED DECEMBER 31, ENDED
----------------------- SEPTEMBER 30, ------------------------- DECEMBER 31,
1997 1998 1998 1997 1998 1998
---------- ---------- ------------- ----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Revenues
Net sales................... 1,664,884 1,977,698 1,179,518 441,841 577,725 344,561
Other revenues.............. 17,717 45,728 27,272 1,265 1,974 1,177
Total revenues........... 1,682,601 2,023,426 1,206,790 443,106 579,699 345,738
Cost of products sold......... (1,482,448) (1,806,115) (1,077,184) (404,477) (519,424) (309,789)
---------- ---------- ---------- -------- -------- --------
Gross profit............. 200,153 217,311 129,606 38,629 60,275 35,949
Selling, general and
administrative expenses..... (154,427) (201,040) (119,902) (37,915) (51,407) (30,660)
Other expenses................ (7,524) (2,408) (1,436) (8,883) (1,595) (951)
Interest expense (net)........ (23,267) (23,992) (14,309) (6,815) (6,333) (3,777)
---------- ---------- ---------- -------- -------- --------
Income (loss) before income
taxes.................... 14,935 (10,129) (6,041) (14,984) 940 561
Taxes on income............... (6,029) (6,060) (3,614) (895) (798) (476)
Minority interest............. (618) 505 301 4 461 275
========== ========== ========== ======== ======== ========
Consolidated net income
(loss)................... 8,288 (15,684) (9,354) (15,875) 603 360
========== ========== ========== ======== ======== ========
Foreign currency translation
adjustments................. (1,508) (1,748) (1,042) (1,135) 366 218
Other comprehensive income.... (1,087) (1,140) (680) (275) (284) (169)
---------- ---------- ---------- -------- -------- --------
Total other comprehensive
income................. (2,595) (2,888) (1,722) (1,410) 82 49
---------- ---------- ---------- -------- -------- --------
Comprehensive income..... 5,693 (18,572) (11,076) (17,285) 685 409
========== ========== ========== ======== ======== ========
</TABLE>
See notes to the consolidated financial statements.
F-29
<PAGE> 188
PEGUFORM GMBH, BOTZINGEN
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1997 AND 1998
AND THREE MONTHS ENDED DECEMBER 31,
1997 AND 1998
(DEM IN THOUSANDS EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
CUMULATIVE ACCUMULATED
COMMON STOCK ADDITIONAL CURRENCY OTHER
---------------- PAID IN TRANSLATION COMPREHENSIVE
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT INCOME TOTAL
------ ------- ---------- -------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT OCTOBER 1, 1996....... 18 70,000 358,397 (198,050) (13,120) 217,227
Net income....................... 8,288 8,288
Dividend paid.................... (4,549) (4,549)
Currency translation............. (1,508) (1,508)
Additional minimum pension
liability...................... (1,087) (1,087)
-- ------- ------- -------- ------- ------ -------
BALANCE AT SEPTEMBER 30, 1997.... 18 70,000 358,397 (194,311) (14,628) (1,087) 218,371
Net loss......................... (15,684) (15,684)
Capital contribution............. 14,837 14,837
Currency translation............. (1,748) (1,748)
Additional minimum pension
liability...................... (1,140) (1,140)
-- ------- ------- -------- ------- ------ -------
BALANCE AT SEPTEMBER 30, 1998.... 18 70,000 373,234 (209,995) (16,376) (2,227) 214,636
== ======= ======= ======== ======= ====== =======
Thousands of U.S. Dollars
(Convenience translation)
September 30, 1998............. 41,749 222,600 (125,243) (9,767) (1,328) 128,011
======= ======= ======== ======= ====== =======
BALANCE AT SEPTEMBER 30, 1997.... 18 70,000 358,397 (194,311) (14,628) (1,087) 218,371
Net (loss)....................... (15,875) (15,875)
Dividend paid.................... 0
Currency translation............. (1,135) (1,135)
Additional minimum pension
liability...................... (275) (275)
-- ------- ------- -------- ------- ------ -------
BALANCE AT DECEMBER 31, 1997
(Unaudited).................... 18 70,000 358,397 (210,186) (15,763) (1,362) 201,086
== ======= ======= ======== ======= ====== =======
BALANCE AT SEPTEMBER 30, 1998.... 18 70,000 373,234 (209,995) (16,376) (2,227) 214,636
Net loss......................... 603 603
Capital contribution............. 0
Currency translation............. 366 366
Additional minimum pension
liability...................... (284) (284)
-- ------- ------- -------- ------- ------ -------
BALANCE AT DECEMBER 31, 1998
(Unaudited).................... 18 70,000 373,234 (209,392) (16,010) (2,511) 215,321
== ======= ======= ======== ======= ====== =======
Thousands of U.S. Dollars
(Convenience translation)
December 31, 1998.............. 41,749 222,600 (124,883) (9,549) (1,498) 128,419
======= ======= ======== ======= ====== =======
</TABLE>
See notes to the consolidated financial statements.
F-30
<PAGE> 189
PEGUFORM GMBH, BOTZINGEN
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1997 AND 1998 AND THREE MONTHS ENDED
DECEMBER 31, 1997 AND 1998
(DEM IN THOUSANDS)
<TABLE>
<CAPTION>
THOUSANDS OF U.S. DOLLARS
U.S. DOLLARS (CONVENIENCE
(CONVENIENCE TRANSLATION)
YEAR ENDED TRANSLATION) THREE MONTHS ENDED THREE MONTHS
SEPTEMBER 30, YEAR ENDED DECEMBER 31, ENDED
------------------- SEPTEMBER 30, ------------------------- DECEMBER 31,
1997 1998 1998 1997 1998 1998
-------- -------- ------------- ----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income (loss)......................... 8,288 (15,684) (9,354) (15,875) 603 360
Adjustments to reconcile net income to net
cash provided by operating activities...
Depreciation and amortization........... 87,828 88,734 52,922 23,802 24,555 14,645
(Gain) loss from the disposal of fixed
assets -- net......................... (1,621) (4,237) (2,527)
Change in accounts receivable........... (42,777) (1,206) (719) (9,608) 10,839 6,464
Change in inventories................... (30,614) (20,443) (12,192) (11,407) 8,141 4,855
Change in prepaid expenses.............. 1,877 436 260 (4,393) (3,874) (2,311)
Change in investment in associated
company............................... (1,373) (1,234) (736) (336) (580) (346)
Change in other assets.................. 582 (1,378) (822) 526 (205) (122)
Change in accounts payable.............. 37,879 31,289 18,661 (23,822) 830 495
Change in accrued expenses.............. 12,661 (2,378) (1,418) (14,943) (10,620) (6,334)
Change in other liabilities............. 5,760 (10,513) (6,270) 16,090 (1,213) (723)
Change in deferred taxes................ (3,483) 264 157 (21) (4,903) (2,924)
-------- -------- ------- ------- ------- -------
Net cash provided by (used in)
operating activities............... 75,007 63,650 37,962 (39,987) 23,573 14,059
-------- -------- ------- ------- ------- -------
Cash Flows From Investing Activities
Proceeds from sale of fixed assets........ 10,524 19,381 11,559 2,213 11,078 6,607
Capital expenditures...................... (102,014) (143,552) (85,616) (37,057) (23,736) (14,156)
-------- -------- ------- ------- ------- -------
Net cash used for investing
activities............................ (91,490) (124,171) (74,057) (34,844) (12,658) (7,549)
-------- -------- ------- ------- ------- -------
Cash Flows From Financing Activities
Capital contribution...................... 0 14,837 8,849 0 0 0
Dividends paid............................ (4,549) 0 0 0 0 0
Net borrowings............................ 38,734 60,141 35,869 185,306 67,351 40,169
Principal payments on debt................ (17,356) (12,967) (7,734) (54,163) (69,084) (41,203)
-------- -------- ------- ------- ------- -------
Net cash provided by (used for)
financing activities.................. 16,829 62,011 36,984 131,143 (1,733) (1,034)
-------- -------- ------- ------- ------- -------
Effect of foreign exchange rate changes..... 838 (12) (7) (115) (277) (165)
-------- -------- ------- ------- ------- -------
Net Decrease in Cash........................ 1,184 1,478 882 56,197 8,905 5,311
Cash and Cash Equivalents at Beginning of
Period.................................... 2,302 3,486 2,079 3,486 4,964 2,961
-------- -------- ------- ------- ------- -------
Cash and Cash Equivalents at End of
Period.................................... 3,486 4,964 2,961 59,683 13,869 8,272
======== ======== ======= ======= ======= =======
</TABLE>
F-31
<PAGE> 190
<TABLE>
<CAPTION>
THOUSANDS OF U.S. DOLLARS
U.S. DOLLARS (CONVENIENCE
(CONVENIENCE TRANSLATION)
YEAR ENDED TRANSLATION) THREE MONTHS ENDED THREE MONTHS
SEPTEMBER 30, YEAR ENDED DECEMBER 31, ENDED
------------------- SEPTEMBER 30, ------------------------- DECEMBER 31,
1997 1998 1998 1997 1998 1998
-------- -------- ------------- ----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Supplemental Cash Flow Information
Cash paid during the period for interest.... 26,758 30,136 17,973
Income taxes paid (refunded)................ 3,026 7,372 4,391
Non-cash changes relating to additional
minimum liability
Change in minimum liability............... 3,301 2,390 1,425 598 589 351
Change in intangible asset................ (819) 121 72 30 49 29
Change in deferred asset.................. (1,395) (1,371) (817) (353) (354) (211)
Other comprehensive income................ (1,087) (1,140) (680) (275) (284) (170)
</TABLE>
See notes to consolidated financial statements.
F-32
<PAGE> 191
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(DEM IN THOUSANDS)
(1) DESCRIPTION OF BUSINESS
The Company is a supplier to the automotive industry and mainly provides
plastic system components.
(2) BASIS OF PRESENTATION
Solely for the convenience of the readers, the consolidated financial
statements as of September 30, 1998 and for the year then ended and as of
December 31, 1998 and for the three months then ended have been translated to
U.S. dollars at the rate of DEM 1,6767 per U.S. dollar, the noon buying rate in
New York City for cable transfers in DEM as certified for customs purposes
published by the Federal Reserve Bank of New York as of December 31, 1998. The
translation should not be construed as a representation that the amounts shown
could be converted into U.S. dollars at such rate or any other rate.
The accompanying financial statements have been prepared in accordance with
United States generally accepted accounting principles ("U.S. GAAP"). The
company maintains its financial records in accordance with the German Commercial
Code, which represents generally accepted accounting principles in Germany
("German GAAP"). Generally, accepted accounting principles in Germany vary in
certain respects from U.S. GAAP. Accordingly, the Company has recorded certain
adjustments in order that these financial statements are in accordance with U.S.
GAAP.
(3) SUMMARY OF ACCOUNTING POLICIES
Fiscal year -- The Company's fiscal year runs from October 1 to September
30.
Principles of consolidation -- The consolidated financial statements
include the accounts of PEGUFORM GmbH and its wholly or majority owned
subsidiaries (collectively the "Group").
The Group accounts include the following companies:
<TABLE>
<CAPTION>
PERCENTAGE HOLDING
NAME AND LOCATION OF SUBSIDIARY %
- ------------------------------- ------------------
<S> <C>
PEGUFORM GmbH, Botzingen............................... 100
PEGUFORM France S.A., Vernon/France.................... 100
PEGUFORM Iberica S.A., Polinya/Spain................... 100
PEGUFORM Bohemia a.s., Liberec/Czech
Republic............................................. 100
PEGUFORM Hella Mexico, S.A. de C.V., Puebla/Mexico..... 70
INERGA Components S.A., Rubi/Spain..................... 100
INERGA Logistics S.L., Polinya/Spain................... 100
INERGA Argentina S.A., Buenos Aires/Argentina.......... 100
INERGA do Brasil Ltda., Guaranema/Brasil............... 100
PEGUFORM Slovakia s.r.o. Poprad/Slowacian Republic..... 100
</TABLE>
F-33
<PAGE> 192
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
All intercompany accounts and transactions have been eliminated.
The group holds a 50% interest in Celulosa Fabril (Cefa) S.A.,
Zaragoza/Spain. This investment is stated at equity.
Application of a new basis of accounting after a change in control of the
Company ("push-down accounting") -- In 1990 there was a change in the control of
the Company. 99% of the shares of Eurotec Systemteile GmbH, the then parent
company of PEGUFORM GmbH (which was merged downstream into PEGUFORM GmbH with
economic effect as of October 1, 1996), were acquired by Klockner Mercator
Maschinenbau GmbH, a subsidiary of Klockner-Werke AG. The paid purchase price
for the shares transferred was retroactively allocated to the net identifiable
assets. The remaining goodwill is amortized over 15 years using the
straight-line method.
Foreign Currencies -- Currency translation is based upon the Statement of
Financial Accounting Standards (SFAS) 52 "Foreign Currency Translation," whereby
the assets and liabilities of foreign subsidiaries where the functional currency
is the local currency are generally translated using period end exchange rates
while the income statements are translated using average exchange rates during
the period. Differences arising from the translation of assets and liabilities
in comparison with the translation of the previous periods are included as a
separate component of stockholders' equity.
Estimates -- The preparation of the Company's financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents -- Highly liquid investments with an initial
maturity of three months or less are classified as cash equivalents.
Inventories -- Manufactured parts inventories are stated at the lower of
cost or market using the average cost method. Inventory also includes costs
associated with building molds under contract.
There are generally no molds used in the Company's manufacturing operations
which are owned by the Company.
Property and Depreciation -- Property, plant, and equipment are recorded at
cost. Depreciation is computed by the straight-line method over the estimated
useful lives of the various classes of assets. Tooling is amortized on a piece
price or straight line basis over the related production contract, generally 3
to 7 years. The principal estimated useful lives are as follows:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Building and improvements................................... 10-50
Machinery and equipment..................................... 3-20
Other equipment, office and transportation equipment........ 3-10
</TABLE>
Leasehold improvements are amortized over the useful life or the term of
the lease. Expenditures for maintenance and repairs are charged to expense as
incurred.
Leases -- The group leases property, plant and equipment as a lessee. All
leases that meet certain specified criteria intended to represent situations
where the substantive risks and rewards of
F-34
<PAGE> 193
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
ownership have been transferred to the lessee are accounted for as capital
lease. All other leases are accounted for as operating lease.
Intangible Assets -- Purchased intangible assets are recorded at
acquisition cost. Amortization is computed by the straight-line method over the
estimated useful lives, generally 3 to 10 years.
The purchase price of companies in excess of the fair value of net
identifiable assets acquired ("goodwill") is capitalized and generally amortized
over 15 years using the straight-line method. The same applies to goodwill
resulting from push-down accounting for the change in control in the Company in
1990. In the case of Inerga Components S.A., which was acquired as of October 1,
1995, goodwill is amortized over 5 years.
Intangible assets include an amount relating to an additional minimum
pension liability. This amount is determined by the unrecognized transitional
amount considered to calculate accrued pension cost (see note 12).
Long-lived assets and long-lived assets to be disposed of -- Effective
October 1, 1996, the Statement of Financial Accounting Standards ("SFAS") No.
121 "Accounting for the Impairment of Long-lived Assets and for Long-Lived
Assets to be Disposed of" was adopted. This Statement establishes accounting
standards for the impairment of long-lived assets, and certain identifiable
intangibles, and goodwill related to those assets to be held and used and
long-lived and certain identifiable intangibles to be disposed of. The statement
requires that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In addition, the Statement requires that certain long-lived assets
and identifiable intangibles to be disposed of be reported at the lower of
carrying amount or fair value less cost to sell. The Company periodically
evaluates the carrying value for impairment.
Revenue recognition -- Revenue from the sale of manufactured parts is
recognized when the parts are shipped. Revenue from mold sales is recognized
using the completed contract method due to the reasonably short build cycle. The
revenues are recognized when final approval has been received from the customer
or in accordance with contract terms. Provision for estimated losses on
uncompleted contracts, if any, is made in the period such losses are identified.
Related party transactions -- The Company is a 99% owned subsidiary of
Klockner Mercator Maschinenbau GmbH, a subsidiary of Klockner-Werke AG,
Duisburg, Germany. Besides immaterial transactions with sister companies the
Company has entered into various transactions with its parent company. These
transactions do not include operational activities but mostly administrative and
financing services. Since the Company operates for the sole benefit of the
parent company, the terms of these transactions are not the result of
arms'-length bargaining.
Since 1990 exist a so called "control and profit distribution agreement"
between Klockner Mercator Maschinenbau GmbH and PEGUFORM GmbH and its former
parent Eurotec Systemteile GmbH respectively. Under this agreement the company
has to distribute all its net income to the parent. On the other side the parent
company has to absorb any net losses incurred at the company. In these financial
statements the payments of the parent to absorb the losses are stated as
additional paid in capital. Any profit distributions are treated as dividends.
The control and profit distribution agreement also has an effect for tax
purposes. PEGUFORM GmbH is no longer a separate taxable individual, with the
effect that all corporation taxes, if any, are
F-35
<PAGE> 194
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
recorded and paid by the parent company. In years with profit the parent company
however charges PEGUFORM GmbH for income taxes. These tax charges are deemed to
be based on actual corporate and trade income tax rates. On the other hand no
tax credits are given for net losses.
Income taxes -- Deferred income taxes are provided using the liability
method in accordance with SFAS No. 109. "Accounting for income taxes".
Deferred taxes for German income taxes are recorded as if PEGUFORM GmbH
were a "stand alone" taxable unit for corporate and trade income taxes. Being
currently integrated for income tax purposes as a subsidiary of a German parent
company PEGUFORM GmbH may be charged for tax liabilities or credited for tax
receivables for future net profits or losses if there were no change in
ownership. With the sale of all the shares in the Company to a foreign company
there will be no future integration for tax purposes anymore thus resulting in
an income tax consideration of all temporary differences.
(4) ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
------------------ AT DECEMBER 31,
1997 1998 1998
------- ------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Accounts receivable trade........................... 243,151 247,248 250,006
Other accounts receivable........................... 38,024 34,924 24,703
------- ------- -------
281,175 282,172 274,709
Allowance for doubtful accounts..................... (4,490) (4,281) (7,657)
------- ------- -------
Net accounts receivable............................. 276,685 277,891 267,052
======= ======= =======
</TABLE>
Substantially all of the receivables are from companies operating in the
automobile industry.
(5) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
------------------ AT DECEMBER 31,
1997 1998 1998
------- ------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Raw material........................................ 48,437 57,376 69,247
Work-in-process..................................... 116,488 102,411 91,468
Finished goods...................................... 20,892 22,544 21,705
Payments on account................................. 33,230 51,960 41,600
Advance payments.................................... (38,051) (32,852) (30,722)
------- ------- -------
Total............................................... 180,996 201,439 193,298
======= ======= =======
</TABLE>
F-36
<PAGE> 195
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Payments on account and advance payments (received) mostly relate to molds.
The Company has no mold production, the manufacturing of the molds is
subcontracted to specialized suppliers usually receiving payments in advance.
There are usually also advance payments by the customer, not necessarily
identical to the ones to be paid to the subcontractor.
In case of probable losses on the purchase and sale of the molds provisions
for threatening losses are recorded.
(6) PROPERTY, PLANT, AND EQUIPMENT
Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
---------------------- AT DECEMBER 31,
1997 1998 1998
--------- --------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Land and buildings............................... 365,126 377,659 380,931
Machinery and equipment.......................... 689,912 751,878 755,224
Office and transportation equipment.............. 99,747 101,152 88,849
Construction in progress......................... 42,406 64,500 63,074
--------- --------- ---------
1,197,191 1,295,189 1,288,078
Less accumulated depreciation and amortization... (708,973) (759,990) (764,912)
--------- --------- ---------
Total............................................ 488,218 535,199 523,166
========= ========= =========
</TABLE>
Included in property, plant and equipment is equipment and buildings held
under capitalized leases. These assets have a cost basis of DEM 94,494 and DEM
94,636 and accumulated depreciation relating to these assets of DEM 32,740 and
DEM 38,769 at September 30, 1997 and 1998 respectively.
(7) BUSINESS ACQUISITIONS
Effective July 1, 1990 shares in Eurotec Systemteile GmbH, the then parent
company of PEGUFORM GmbH, were acquired by Klockner Mercator Maschinenbau GmbH,
a subsidiary of Klockner-Werke AG. This transaction was accounted for as a
purchase and the purchase price was allocated applying "push-down" accounting to
the estimated fair value of assets and liabilities assumed, resulting in a
goodwill of approximately DEM 127.5 million.
Effective January 2, 1992 the Company acquired 51% of the shares of
PEGUFORM Bohemia a.s. This acquisition was accounted for as a purchase resulting
in a goodwill of approximately DEM 2.7 million. The goodwill is amortized over
15 years. At October 8, 1993 additional 25% of the shares in this company were
acquired increasing the goodwill already by DEM 1.0 million.
Effective January 26/February 12, 1998 the Company acquired the remaining
24% of outstanding shares in PEGUFORM Bohemia for a purchase price of DEM 4.67
million. This acquisition was accounted for as a purchase with the purchase
price allocated to the relating minority interest in equity. The net amount paid
included an adjustment for costs absorbed by the majority
F-37
<PAGE> 196
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
shareholder. As a result of this adjustment, DEM 1.9 million was recorded in
revenue in the year ending September 30, 1998.
With a contract signed on October 2/October 14, 1998 the Company and Grupo
Hermez, S.A. de C.V., Mexico City/Mexico, established PEGUFORM Hella Mexico,
S.A. de C.V., Puebla/ Mexico, as a joint company. The Company holds 70% of the
shares, Grupo Hermez 30%.
The consolidated earnings include the operations of PEGUFORM Hella Mexico
from October 14, 1997, the operations of PEGUFORM Bohemia were already fully
consolidated in the prior two years.
Had the acquisition of the minority interest in PEGUFORM Bohemia occurred
before October 1, 1996 the pro forma effect on prior year financial statements
would have been the following increase of net profits resulting from a decrease
of minority interests:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
--------------
1997 1998
----- -----
<S> <C> <C>
Minority interests portion of the results of PEGUFORM
Bohemia................................................... 618 338
=== ===
</TABLE>
(8) ACCOUNTS PAYABLE
Accounts payable consist of the following:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
------------------ AT DECEMBER 31,
1997 1998 1998
------- ------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Accounts payable trade.............................. 225,395 259,672 253,814
Liabilities to affiliated companies................. 1,058 491 0
------- ------- -------
Total............................................... 226,453 260,163 253,814
======= ======= =======
</TABLE>
F-38
<PAGE> 197
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(9) DEBT
Debt consist of the following:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
INTEREST RATES ----------------- AT DECEMBER 31,
% MATURITIES 1997 1998 1998
-------------- ---------- ------- ------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Liabilities to financial institutions.......... 3.25 - 15.5 1999 36,415 44,490 75,728
Liabilities to affiliated companies............ variable 1999 264,972 308,440 278,128
Liabilities from capital leases................ 4.16 - 11.76 1999 8,290 7,435 8,441
------- ------- -------
Short-term financial liabilities............... 309,677 360,365 362,297
------- ------- -------
Liabilities to financial institutions.......... 3.25 - 8.24 2000-2003 49,848 53,165 52,645
Liabilities from capital leases................ 4.16 - 11.76 2000-2011 52,045 44,690 41,558
------- ------- -------
Long-term financial liabilities................ 101,893 97,855 94,203
------- ------- -------
Total debt................................. 411,570 458,220 456,500
======= ======= =======
</TABLE>
The liabilities to financial institutions include various loans received
from banks in different countries. In 1997/98 PEGUFORM GmbH has received two new
loans by Sudwest LB, Stuttgart, Germany, in the aggregate amount of DEM
21,535,000. These loans are to be repaid in four installments on December 30,
starting December 30, 1998. In a separate agreement with Klockner Mercator
Maschinenbau GmbH PEGUFORM receives the difference between the average monthly
internal group interest rate and the loan interest rate.
The Group has entered into various capital lease agreements for property,
plant and equipment. The leases require monthly, quarterly and half-yearly
payments of principal and interest. The Group usually intends to exercise the
options to buy the respective assets.
Bonds and liabilities to financial institutions are partially secured by a
comfort letter from Klockner-Werke AG as the ultimate parent of PEGUFORM GmbH.
Klockner-Werke AG has given to the banks the commitment not to cancel the
"profit distribution agreement" (see note 3: "related party transactions")
before the loans given to PEGUFORM GmbH have been repaid.
The Company had available unused unsecured short-term lines of credit of
DEM 59,715 at September 30, 1998 and unsecured long-term lines of credit of DEM
26,589 at September 30, 1998.
F-39
<PAGE> 198
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Aggregate amounts of debt maturing during the next five years and
thereafter as of September 30, 1998 are as follows:
<TABLE>
<CAPTION>
DEM
-------
<S> <C>
1999........................................................ 360,365
2000........................................................ 21,567
2001........................................................ 23,169
2002........................................................ 17,278
2003........................................................ 10,219
Remaining years............................................. 25,622
-------
Total....................................................... 458,220
=======
</TABLE>
(10) RELATED PARTY TRANSACTIONS
The transactions of the Company with its parent company Klockner Mercator
Maschinenbau GmbH include mostly financing and the distribution/absorption of
profit/losses. Additionally there were minor purchases of machinery from sister
companies.
The financing of the Company is done exclusively via short-term credits
without fixed repayment dates.
According to the profit distribution agreement (see note 3: related party
transactions) final net profits (before taxes) are to be distributed to the
parent company while net losses are to be absorbed.
In 1997/98 the parent company granted operating subsidies to the Company.
The current accounts with the parent company are to be charged with
variable interest rates.
The following is a summary of transactions with the parent company at
September 30, 1997 and 1998:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
---------------- AT DECEMBER 31,
1997 1998 1998
------ ------ ---------------
(UNAUDITED)
<S> <C> <C> <C>
Revenue received for:
Operating subsidies granted by the parent company... 0 13,335 0
------ ------ -----
0 13,335 0
====== ====== =====
Expenses charged for:
Interest on current intercompany accounts........... 9,962 14,320 3,257
Tax charge by parent company........................ 4,252 0 0
------ ------ -----
14,214 14,320 3,257
====== ====== =====
</TABLE>
F-40
<PAGE> 199
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Based on the control and profit distribution agreement with the parent
company, in the year ended September 30, 1997 the company distributed its net
income for the year in the amount of DEM 4,549. In the year ended September 30,
1998 the parent company absorbed the company's loss of DEM 13,335.
The result of the related party transactions is the following net payable.
The amounts are shown on a gross basis in accounts receivable and in accounts
payable and short-term debt:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
------------------ AT DECEMBER 31,
1997 1998 1998
------- ------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Amounts Receivable.................................. 0 0 0
Amounts Payable..................................... 266,030 308,931 278,128
------- ------- -------
Net Amounts Payable................................. 266,030 308,931 278,128
======= ======= =======
</TABLE>
(11) COMMITMENTS AND CONTINGENCIES
Operating Leases -- The Company leases certain of its manufacturing
facilities, sales offices, transportation and other equipment under operating
leases. Total rental expense was approximately DEM 14,946 and DEM 19,994 for the
years ended September 30, 1997 and 1998 respectively.
Future minimum lease commitments under non-cancellable operating leases
with initial or remaining terms in excess of one year are as follows:
<TABLE>
<CAPTION>
DEM
------
<S> <C>
1999........................................................ 6,726
2000........................................................ 5,738
2001........................................................ 4,346
2002........................................................ 3,243
2003........................................................ 1,382
Remaining years............................................. 785
------
Total....................................................... 22,220
======
</TABLE>
Other Commitments and contingencies -- The Company has in 1995 entered into
an agreement with a company regarding the use of EDP hardware components and
software as well as technical support. This agreement is not cancellable and
runs until September 30, 2003. Total expense was DEM 16,240 and DEM 22,841 for
the years ended September 30, 1997 and 1998 respectively.
F-41
<PAGE> 200
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Future EDP cost commitments under this non-cancellable agreement are as
follows:
<TABLE>
<CAPTION>
DEM
------
<S> <C>
1999........................................................ 15,683
2000........................................................ 13,209
2001........................................................ 11,972
2002........................................................ 11,512
2003........................................................ 11,117
Remaining years............................................. 0
------
Total....................................................... 63,493
======
</TABLE>
(12) PENSION PLANS
PEGUFORM GmbH maintains one defined benefit pension plan covering all its
full-time hourly and salaried employees plus some individual defined benefit
pension agreements for managers and members of the board. The benefits payable
under the plans are generally determined based on the employees' length of
service and earnings. These are no external findings of these schemes.
The funded status of the defined benefit plans was as follows:
<TABLE>
<CAPTION>
ACCUMULATED
BENEFITS
EXCEED ASSETS
AT SEPTEMBER 30,
----------------
1997 1998
------ ------
<S> <C> <C>
Actuarial present value of benefit obligations
Vested Benefits........................................... 33,086 37,841
Nonvested benefits........................................ 6,372 7,073
------ ------
Accumulated benefit obligation.............................. 39,458 44,914
====== ======
Projected benefit obligation................................ 40,529 45,871
Market value of plan assets................................. 0 0
------ ------
Excess (deficiency) of assets over projected benefit
obligation................................................ 40,529 45,871
Unrecognized transitional amount............................ 1,331 1,210
Unrecognized net loss....................................... 3,553 5,951
Unrecognized prior service cost............................. 0 0
------ ------
Accrued pension cost........................................ 35,645 38,710
====== ======
</TABLE>
F-42
<PAGE> 201
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATED
BENEFITS
EXCEED ASSETS
AT SEPTEMBER 30,
----------------
1997 1998
------ ------
<S> <C> <C>
Amounts recognized in the balance sheet consist of
Accrued pension liability................................. 39,458 44,913
Intangible asset.......................................... 1,331 1,210
Unrecognized prior service cost........................... 2,482 4,993
------ ------
Net amount recognized....................................... 35,645 38,710
====== ======
</TABLE>
The date used to measure plan liabilities is as of September 30 each year.
The weighted-average assumed discount rate was 6.0% for the years ended
September 30, 1997 and 1998 respectively. The expected rate of increase in
compensation levels was 2.0% and 1.6% respectively for the years ended September
30, 1997 and 1998 respectively. The same rates as for the compensation were used
for inflation and increase in social security contribution ceiling in the
actuarial calculation.
Net periodic pension expense for the years ended September 30, 1997 and
1998 included the following components:
<TABLE>
<CAPTION>
AT
SEPTEMBER 30,
--------------
1997 1998
----- -----
<S> <C> <C>
Service cost benefits during the year....................... 1,692 1,910
Interest cost on projected benefit obligation............... 2,183 2,393
Actual return on plan assets................................ 0 0
Net amortization and deferral............................... 121 121
----- -----
Net periodic pension expense................................ 3,996 4,424
===== =====
</TABLE>
(13) INCOME TAXES
Amounts in the financial statements related to income taxes are for the
operations of the consolidated subsidiaries as listed under note 3 and for
PEGUFORM GmbH as charged by its parent company.
As explained under note 3 deferred taxes for PEGUFORM GmbH are recorded
considering a full taxation of future profits and losses although this company
is currently not subject to German corporate and trade income taxes.
F-43
<PAGE> 202
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The provision for income tax expense for the period ended:
<TABLE>
<CAPTION>
AT
SEPTEMBER 30,
---------------
1997 1998
------ -----
<S> <C> <C>
Currently Payable
Germany................................................... 4,252 38
Foreign................................................... 1,367 4,728
------ -----
Total....................................................... 5,619 4,766
------ -----
Deferred
Germany................................................... 6,480 (624)
Foreign................................................... (6,070) 1,918
------ -----
Total....................................................... 410 1,294
------ -----
Total....................................................... 6,029 6,060
====== =====
</TABLE>
German corporate tax law applies a split-rate computation with regard to
the taxation of the income of a corporation and its shareholders. Current German
taxes are recorded as being charged by the parent company based on the tax law
in effect for the respective fiscal period. Corporate income is initially
subject to a federal corporation tax of 45% plus a solidarity surcharge of 7.5%
until 1997 and 5.5% effective January 1, 1998 on the federal corporate tax
payable. Including the impact of the surcharge, the federal corporate tax rate
amounted to 48.375% until 1997 and to 47.475% effective January 1, 1998. Upon
distribution of retained earnings to stockholders, the corporate income tax rate
on the earnings is adjusted to 30%, plus the solidarity surcharge on the
distribution corporate tax by means of a refund for taxes previously paid. Upon
distribution of retained earnings in the form of a dividend, stockholders who
are taxpayers in Germany are entitled to a tax credit in the amount of federal
income taxes previously paid by the corporation.
Current taxes are calculated on the basis of the respective tax rates in
effect for the periods presented. This may presumably also apply to the tax
charges by the parent company of PEGUFORM GmbH for the German operations. The
calculation of the deferred taxes is based on future tax rates. As a result, the
deferred taxes for PEGUFORM GmbH are calculated with an effective corporate
income tax rate of 48.375% as of September 30, 1997 and 47.475% as of September
30, 1998 plus the after federal tax benefit rate for trade tax of 7.8% and 7.9%
as of September 30, 1997 and 1998 respectively.
A reconciliation of income taxes determined using the German corporate tax
rate of 48.375% plus the after federal tax benefit rate for trade taxes of 7.8%
for a combined statutory rate of 55.4% for the year ended September 30, 1997 and
of 47.475% plus the after federal tax benefit rate for trade
F-44
<PAGE> 203
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
taxes of 7.9% for a combined statutory rate of 56.2% for the year ended
September 30, 1998 is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
----------------
1997 1998
------ ------
<S> <C> <C>
Expected provision (benefit) for income taxes............... 8,392 (5,613)
Non-deductible items........................................ 2,566 1,092
Tax free income............................................. (1,363) (1,631)
Write off of goodwill not tax-deductible.................... 5,237 5,159
Badwill credited to income not taxable...................... 0 (1,058)
Consolidation items not taxable............................. (907) (71)
Foreign tax rate differential............................... (6,893) (3,409)
Changes in valuation allowances on deferred tax assets...... (990) 2,090
Parent company's tax allocation differential................ 2,078 10,970
Investment and export tax credits (Spain)................... (1,966) (1,891)
Other....................................................... (125) 422
------ ------
Actual income tax expense................................... 6,029 6,060
====== ======
</TABLE>
The amounts shown under Parent company's tax allocation differential relate
to the tax charges by Klockner Werke AG. There were no credits given for the
losses the year ending September 1998, while the charge for the year ending
September 1997 was not based on the taxable income of PEGUFORM GmbH.
The amount of the Group's deferred tax valuation allowances is based upon
management's belief that it is more likely than not that not all of the deferred
tax assets will be realized. In future periods, depending upon the Group's
financial results, management's estimate of the amount of the deferred tax
assets considered realizable may change, and hence the valuation allowance may
increase or decrease.
F-45
<PAGE> 204
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The tax-effected temporary differences and carryforwards which comprised
deferred assets and liabilities were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
------------------
1997 1998
------- -------
<S> <C> <C>
Deferred tax assets:
Accounts receivable....................................... 127 235
Inventories............................................... 1,557 776
Property, plant and equipment............................. 368 0
Other accrued expenses.................................... 5,191 5,596
Net operating loss carryforwards.......................... 19,207 20,923
Additional minimum pension liability...................... 1,395 2,766
Other..................................................... 0 415
------- -------
27,845 30,711
Valuation allowances................................... (17,293) (19,413)
------- -------
Total deferred tax assets.............................. 10,552 11,298
------- -------
Deferred tax liabilities:
Accounts receivable....................................... 1,179 1,890
Inventories............................................... 0 603
Property, plant and equipment (including capital
leases)................................................ 17,998 17,483
Other accrued expenses.................................... 3,915 2,845
Other..................................................... 1,319 1,229
------- -------
Total deferred tax liabilities......................... 24,411 24,050
------- -------
Net deferred tax liabilities........................... (13,859) (12,752)
======= =======
</TABLE>
At September 30, 1998, the Group had net operating losses ("NOLs")
amounting to DEM 53,883. The NOLs relate to losses of foreign companies and are
partly limited in their use to the Group.
Management believes the net operating loss carryforwards at September 30,
1998 are only to a limited extent realizable based on forecasted earnings and
available tax planning strategies.
With regard to the additional minimum pension liability we refer to Note
12. Changes in these deferred tax assets have no impact on the provision for
income tax expenses.
F-46
<PAGE> 205
PEGUFORM GMBH, BOTZINGEN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Net deferred income tax assets and liabilities in the consolidated balance
sheets are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
------------------
1997 1998
------- -------
<S> <C> <C>
Current
Deferred income tax assets................................ 6,479 5,235
Deferred income tax liabilities........................... (3,564) (3,618)
------- -------
Total....................................................... 2,915 1,617
------- -------
Non-current
Deferred income tax assets................................ 4,073 6,063
Deferred income tax liabilities........................... (20,847) (20,432)
------- -------
Total....................................................... (16,774) (14,369)
------- -------
Total....................................................... (13,859) (12,752)
======= =======
</TABLE>
F-47
<PAGE> 206
[VENTURE LOGO]
<PAGE> 207
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 561 through 571 of the Michigan Business Corporation Act set forth
the conditions and limitations governing the indemnification of corporate
directors, officers and other persons. Section 408 of the Michigan Limited
Liability Company Act sets forth the conditions and limitations governing the
indemnification of managers of limited liability companies.
Reference is made to Section 7.2 of the Restated Articles of Organization
of Venture Holdings Company LLC, filed as Exhibit 3.1, and to Articles IX, IX,
VIII, VIII, VIII, VIII and VIII of the Articles of Incorporation of Vemco, Inc.,
Venture Industries Corporation, Venture Mold & Engineering Corporation, Venture
Leasing Company, Vemco Leasing, Inc., Venture Holdings Corporation and Venture
Service Company, respectively, copies of which are incorporated by reference as
Exhibits 3.2, 3.3, 3.4, 3.5, 3.6, 3.7 and 3.8, respectively, which generally
provide for the indemnification of managers or directors, as applicable, against
certain liabilities to the fullest extent permitted by Michigan law. Reference
is also made to Section 7.5 of the Amended and Restated Operating Agreement of
Venture Holdings Company LLC, filed as Exhibit 3.12, Articles V, V, V, VI, VI,
VI and VI of the Bylaws of Vemco, Inc., Venture Industries Corporation, Venture
Mold & Engineering Corporation, Venture Leasing Company, Vemco Leasing, Inc.,
Venture Holdings Corporation and Venture Service Company, respectively,
incorporated by reference as Exhibits 3.13, 3.14, 3.15, 3.16, 3.17, 3.18 and
3.19, respectively, Section B.4 of the Operating Agreement of Experience
Management LLC, filed as Exhibit 3.20, and Article VI of the Bylaws of each of
Venture Europe, Inc. and Venture EU Corporation, filed as Exhibits 3.21 and
3.22, respectively, which generally authorize each registrant to provide
indemnification for directors, officers, managers and certain other persons of
the registrants to the full extent permitted by Michigan law. The registrants,
along with certain affiliated companies, maintain primary directors and officers
liability coverage in the amount of $6.0 million.
The registrants entered into agreements with certain of their officers and
directors for indemnification and advancement of expenses in 1994. Such
indemnification agreements are filed as Exhibits 10.20, 10.21 and 10.22.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<S> <C>
2.1** Share Purchase and Transfer Agreement between Klockner
Mercator Maschinenbau GmbH, on the one hand, and Venture
Beteiligungs GmbH and Venture Holdings Trust, on the other
hand, dated March 8, 1999, filed as Exhibit 2.1 to the
Issuer's Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 333-34475) and incorporated
herein by reference. Schedules to the Agreement, listed on
the last two pages of the Agreement, were not filed, but
will be provided to the Commission supplementally upon
request.
2.2** Share Purchase and Transfer Agreement among Neptuno
Verwaltungs-und-Treuhand-Gesellschaft mbH, and Venture
Verwaltungs GmbH and Venture Holdings Trust, dated March 8,
1999, filed as Exhibit 2.2 to the Issuer's Current Report on
Form 8-K on June 11, 1999 (File No. 333-34475) and
incorporated herein by reference.
</TABLE>
II-1
<PAGE> 208
<TABLE>
<S> <C>
2.3** Trust Contribution Agreement, made as of the 27th day of
May, 1999, by and between Venture Holdings Trust and Venture
Holdings Company LLC, filed as Exhibit 2.3 to the Issuer's
Current Report on Form 8-K on June 11, 1999 (File No.
333-34475) and incorporated herein by reference.
3.1* Restated Articles of Organization of Venture Holdings
Company LLC.
3.2** Restated Articles of Incorporation of Vemco, Inc., filed as
Exhibit 3.1 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and
incorporated herein by reference.
3.3** Restated Articles of Incorporation of Venture Industries
Corporation, filed as Exhibit 3.2 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.4** Restated Articles of Incorporation of Venture Mold &
Engineering Corporation, filed as Exhibit 3.3 to Venture's
Registration Statement on Form S-4, effective October 27,
1997 (Registration No. 333-34475), and incorporated herein
by reference.
3.5** Restated Articles of Incorporation of Venture Leasing
Company, filed as Exhibit 3.4 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.6** Restated Articles of Incorporation of Vemco, Leasing, Inc.,
filed as Exhibit 3.5 to Venture's Registration Statement on
Form S-4, effective October 27, 1997 (Registration No.
333-34475), and incorporated herein by reference.
3.7** Restated Articles of Incorporation of Venture Holdings
Corporation, filed as Exhibit 3.6 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.8** Restated Articles of Incorporation of Venture Service
Company, filed as Exhibit 3.7 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.9* Articles of Organization of Experience Management LLC.
3.10* Articles of Incorporation of Venture Europe, Inc.
3.11* Articles of Incorporation of Venture EU Corporation.
3.12* Amended and Restated Operating Agreement of Venture Holdings
Company LLC.
3.13** Bylaws of Vemco, Inc., filed as Exhibit 3.9 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
3.14** Bylaws of Venture Industries Corporation, filed as Exhibit
3.10 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.15** Bylaws of Venture Mold & Engineering Corporation, filed as
Exhibit 3.11 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826)
and incorporated herein by reference.
3.16** Bylaws of Venture Leasing Company, filed as Exhibit 3.12 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.17** Bylaws of Vemco Leasing, Inc., filed as Exhibit 3.13 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
</TABLE>
II-2
<PAGE> 209
<TABLE>
<S> <C>
3.18** Bylaws of Venture Holdings Corporation, filed as Exhibit
3.14 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.19** Bylaws of Venture Service Company, filed as Exhibit 3.15 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.20* Operating Agreement of Experience Management LLC.
3.21* Bylaws of Venture Europe, Inc.
3.22* Bylaws of Venture EU Corporation.
4.1* Indenture, dated as of May 27, 1999, between Venture
Holdings Trust and The Huntington National Bank, as Trustee,
regarding 11% Senior Notes due 2007 (including form of
Notes).
4.1.1* First Supplemental Indenture to the Indenture filed as
Exhibit 4.1, made as of the 27th day of May, 1999, by and
among Venture Holdings Trust and The Huntington National
Bank, as Trustee.
4.2* Indenture, dated as of May 27, 1999, between Venture
Holdings Trust and The Huntington National Bank, as Trustee,
regarding 12% Senior Subordinated Notes due 2009 (including
form of Notes).
4.2.1* First Supplemental Indenture to the Indenture filed as
Exhibit 4.2, made as of the 27th day of May, 1999, by and
among Venture Holdings Trust and The Huntington National
Bank, as Trustee.
4.3** Indenture for 9 1/2% Senior Notes due 2005 (including form
of Notes) filed as Exhibit 4.1 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
4.3.1* First Amendment to the Indenture incorporated by reference
as Exhibit 4.3, by and among Venture Holdings Trust, Vemco,
Inc. Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company,
Venture Mold & Engineering Corporation and Venture Service
Company, as Issuers, and The Huntington National Bank, as
Trustee, made as of the 27th day of May, 1999.
4.3.2* First Supplemental Indenture to the Indenture incorporated
by reference as Exhibit 4.3, by and among Venture Holdings
Trust, Vemco, Inc. Vemco Leasing, Inc., Venture Industries
Corporation, Venture Holdings Corporation, Venture Leasing
Company, Venture Mold & Engineering Corporation and Venture
Service Company, as Issuers, Venture Holdings Company LLC,
Experience Management LLC, Venture Europe, Inc. and Venture
EU Corporation, as Guarantors, and The Huntington National
Bank, as Trustee, made as of May 27, 1999.
4.3.3* Second Amendment to the Indenture incorporated by reference
as Exhibit 4.3, by and among Venture Holdings Trust, Vemco,
Inc. Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company,
Venture Mold & Engineering Corporation and Venture Service
Company, as Issuers, and The Huntington National Bank, as
Trustee, made as of May 27, 1999.
4.3.4* Second Supplemental Indenture to the Indenture incorporated
by reference as Exhibit 4.3, by and among Venture Holdings
Trust, Vemco, Inc. Vemco Leasing, Inc., Venture Industries
Corporation, Venture Holdings Corporation, Venture Leasing
Company, Venture Mold & Engineering Corporation and Venture
Service Company, as Issuers, Venture Holdings Company LLC,
and The Huntington National Bank, as Trustee, made as of May
27, 1999.
</TABLE>
II-3
<PAGE> 210
<TABLE>
<S> <C>
4.3.5* Guarantee executed by Venture Holdings Company LLC on the
27th day of May, 1999, pursuant to the terms of the
Indenture incorporated by reference as Exhibit 4.3,
including Trustee's Certificate of Authorization.
4.3.6* Guarantee executed by Experience Management LLC on the 27th
day of May, 1999, pursuant to the terms of the Indenture
incorporated by reference as Exhibit 4.3, including
Trustee's Certificate of Authorization.
4.3.7* Guarantee executed by Venture Europe, Inc. on the 27th day
of May, 1999, pursuant to the terms of the Indenture
incorporated by reference as Exhibit 4.3, including
Trustee's Certificate of Authorization.
4.3.8* Guarantee executed by Venture EU Corporation on the 27th day
of May, 1999, pursuant to the terms of the Indenture
incorporated by reference as Exhibit 4.3, including
Trustee's Certificate of Authorization.
4.4* Registrant Rights Agreement, made and entered into as of May
27, 1999, among Venture Holdings Trust, Vemco, Inc., Vemco
Leasing, Inc., Venture Industries Corporation, Venture
Holdings Corporation, Venture Leasing Company, Venture Mold
& Engineering Corporation, Venture Service Company, Venture
Europe, Inc., Venture EU Corporation, Experience Management
LLC and Venture Holdings Company LLC, as Issuers, and Banc
One Capital Markets, Inc. and Goldman Sachs & Co., as
Initial Purchasers.
5.1* Opinion of Dykema Gossett PLLC.
10.1* Credit Agreement, dated as of May 27, 1999, among Venture
Holdings Trust, the Lenders (as defined therein) and The
First National Bank of Chicago, as Administrative Agent.
10.1.1* First Amendment, dated June 4, 1999, to the Credit Agreement
filed as Exhibit 10.1.
10.2* ISDA Master Agreement, dated May 27, 1999, between Venture
Holdings Company LLC and The First National Bank of Chicago.
10.2.1* Schedules to the Agreement filed as Exhibit 10.2.
10.3* Corporate Opportunity Agreement, made and entered into on
the 27th day of May, 1999, by and between Larry J. Winget
and The Huntington National Bank, as Indenture Trustee.
10.4** Corporate Opportunity Agreement, dated February 16, 1994, by
and between Larry J. Winget and Comerica Bank, as Indenture
Trustee, filed as Exhibit 10.3 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
10.4.1** Agreement, dated July 9, 1997, by Larry J. Winget to be
bound by the terms of the Corporate Opportunity Agreement,
filed as Exhibit 10.3, for the benefit of the holders of the
Issuers' 9 1/2% Senior Notes due 2005 filed as Exhibit
10.3.1 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and
incorporated herein by reference.
10.5** Service Agreement, dated as of January 1, 1992, by and
between Venture Industries Corporation, Vemco, Inc., Venture
Mold & Engineering Corporation, Venture Leasing Company,
Vemco Leasing, Inc., Deluxe Pattern Corporation, Venture
Automotive Corp., Venture Sales & Engineering Corp. and
Venture Service Company, filed as Exhibit 10.11 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
</TABLE>
II-4
<PAGE> 211
<TABLE>
<S> <C>
10.6** Lease, dated as of November 1, 1990, by and among Venture
Industries Corporation, Venture Technical Development
Company, Venture Mold & Engineering Corporation, Vemco,
Inc., Deluxe Pattern Company, Venture Automotive Corp.,
Larry J. Winget and Alicia Winget (Acropolis Resort), filed
as Exhibit 10.14 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.7** Real Estate Lease Agreement, dated December 7, 1988, by and
between Harper Properties of Clinton Township Limited
Partnership and Venture Industries Corporation (Harper
Lease), filed as Exhibit 10.15 to Venture's Registration
Statement on Form S-1, effective February 8, 1994
(Registration No. 33-72826), and incorporated herein by
reference.
10.7.1** First amendment to Real Estate Lease Agreement, dated
December 30, 1993, by and between Harper Properties of
Clinton Township Limited Partnership and Venture Industries
Corporation (Harper Lease), filed as Exhibit 10.15.1 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.8** Machinery and Equipment Lease Agreement, dated as of
December 7, 1988, by and between Realven Corporation and
Venture Industries Corporation (Realven Lease), filed as
Exhibit 10.16 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.8.1** First Amendment to Machinery and Equipment Lease Agreement,
dated December 30, 1993, by and between Realven Corporation
and Venture Industries Corporation (Realven Lease), filed as
Exhibit 10.16.1 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.9** Real Estate Lease Agreement, dated as of January 27, 1989,
by and between Venture Real Estate, Inc. and Venture Mold &
Engineering Corporation (Commerce Road facility), filed as
Exhibit 10.17 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.10** Real Estate Lease Agreement, dated as of August 1, 1992, by
and between Venture Real Estate, Inc. and Venture Industries
Corporation (17400 Malyn), filed as Exhibit 10.18 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.11** Real Estate Lease Agreement, dated as of August 1, 1992, by
and between Venture Real Estate, Inc. and Venture Industries
Corporation (17350 Malyn), filed as Exhibit 10.19 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.12** Farm and Country Real Estate Company and Vemco, Inc. Real
Estate Availability and Usage Agreement, dated April 24,
1992, filed as Exhibit 10.20 to Venture's Registration
Statement on Form S-1, effective February 8, 1994
(Registration No. 33-72826), and incorporated herein by
reference.
10.13** Sales Representation Agreement by and between Vemco, Inc.
and Venture Sales & Engineering Corporation, filed as
Exhibit 10.21 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
</TABLE>
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<PAGE> 212
<TABLE>
<S> <C>
10.13.1** Sales Representation Agreement by and between Venture
Industries Corporation and Venture Sales & Engineering
Corporation, filed as Exhibit 10.21.1 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.14** Manufacturing Agreement by and between Venture Automotive
Corp. and Vemco, Inc., filed as Exhibit 10.22 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.15** Machinery Usage Agreements between Larry J. Winget Living
Trust and Venture Industries Corporation, filed as Exhibit
10.23 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.15.1** Machinery Usage Agreement between Larry J. Winget Living
Trust and Vemco, Inc., filed as Exhibit 10.23.1 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.16** Machinery Usage Agreement between Deluxe Pattern Corporation
and Venture Mold & Engineering, filed as Exhibit 10.24 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.17** Form of Machinery and Equipment Lease Agreement between
Venture Industries Corporation and Nova Industries, Inc.,
filed as Exhibit 10.25 to Venture's Registration Statement
on Form S-1, effective February 8, 1994 (Registration No.
33-72826), and incorporated herein by reference.
10.18** Form of Machinery and Equipment Lease Agreement between
Venture Industries Corporation and Nova Industries, Inc.,
filed as Exhibit 10.26 to Venture's Registration Statement
on Form S-1, effective February 8, 1994 (Registration No.
33-72826), and incorporated herein by reference.
10.19* Indemnification Agreement between the Company and Larry J.
Winget.
10.20* Indemnification Agreement between the Company and Michael G.
Torakis.
10.21* Indemnification Agreement between the Company and A. James
Schutz.
10.22** Insurance Policies issued by Pompo Insurance & Indemnity
Company Ltd. to the Registrants and affiliated companies,
filed as Exhibit 10.32 to Venture's Registration Statement
on Form S-1, effective February 8, 1994 (Registration No.
33-72826), and incorporated herein by reference.
10.23** Real Estate Usage Agreement between Venture Real Estate
Acquisition Company and Venture Industries Corporation,
dated February 15, 1995, filed as Exhibit 10.23 to Venture's
Registration Statement on Form S-4, effective October 27,
1997 (Registration No. 333-34475), and incorporated herein
by reference.
10.24** Machinery Usage Agreement between Venture Equipment
Acquisition Company and Venture Industries Corporation,
dated February 15, 1995, filed as Exhibit 10.24 to Venture's
Registration Statement on Form S-4, effective October 27,
1997 (Registration No. 333-34475), and incorporated herein
by reference.
10.25** Venture Industries Group Participation Agreement between
Venture Industries Corporation and Venture Asia Pacific Pty
Ltd. filed as Exhibit 10.29 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
</TABLE>
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<TABLE>
<S> <C>
10.26** License Agreement as to Proprietary Technologies and Processes, dated July 2, 1997, between Larry J.
Winget and Venture Industries Corporation, Vemco, Inc., Venture Mold & Engineering Corporation,
Venture Industries Canada Ltd., Vemco Leasing, Inc., Venture Leasing Company, Venture Service
Company, Venture Holdings Corporation and Venture Holdings Trust filed as Exhibit 10.30 to Venture's
Registration Statement on Form S-4, effective October 27, 1997 (Registration No. 333.34475), and
incorporated herein by reference.
10.27** License Agreement as to Patents, dated July 2, 1997, between Larry J. Winget and Venture Industries
Corporation, Vemco, Inc., Venture Mold & Engineering Corporation, Venture Industries Canada Ltd.,
Vemco Leasing, Inc., Venture Leasing Company, Venture Service Company, Venture Holdings Corporation
and Venture Holdings Trust filed as Exhibit 10.31 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and incorporated herein by reference.
12.1* Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21.1* Subsidiaries of the Registrants.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of BDO International GmbH Wirtschaftsprufungsgesellschaft.
23.3* Consent of Dykema Gossett PLLC (contained in their opinion filed as Exhibit 5.1).
24.1* Power of Attorney (included on signature page to this Registration Statement).
25.1* Statement of Eligibility of Trustee related to 11% Senior Notes due 2007.
25.2* Statement of Eligibility of Trustee related to 12% Senior Subordinated Notes due 2009.
99.1* Form of Letter of Transmittal related to exchange for the Senior Exchange Notes.
99.2* Form of Notice of Guaranteed Delivery related to exchange for the Senior Exchange Notes.
99.3* Form of Letter of Transmittal related to exchange for the Senior Subordinated Exchange Notes.
99.4* Form of Notice of Guaranteed Delivery related to exchange for the Senior Subordinated Exchange Notes.
</TABLE>
- -------------------------
* Filed herewith.
** Previously filed.
(b) Financial Statement Schedules
Valuation and Qualifying Accounts.
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which,
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<PAGE> 214
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE> 215
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Detroit, State of
Michigan, on July 8, 1999.
VENTURE HOLDINGS COMPANY LLC, VEMCO, INC.,
VENTURE INDUSTRIES CORPORATION, VENTURE
MOLD & ENGINEERING CORPORATION, VENTURE
LEASING COMPANY, VEMCO LEASING, INC.,
VENTURE SERVICE COMPANY, VENTURE HOLDINGS
CORPORATION, EXPERIENCE MANAGEMENT LLC,
VENTURE EUROPE, INC., VENTURE EU
CORPORATION
By: /s/ JAMES E. BUTLER, JR.
---------------------------------------
James E. Butler, Jr.
Executive Vice President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James E. Butler, Jr. his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
such attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact and
agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 8, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
/s/ LARRY J. WINGET Principal Executive Officer and Special
- --------------------------------------------------- Advisor to the Issuer, and director of each
Larry J. Winget guarantor
/s/ MICHAEL G. TORAKIS Principal Executive Officer and director of
- --------------------------------------------------- each guarantor
Michael G. Torakis
Director of each guarantor
- ---------------------------------------------------
A. James Schutz
/s/ JAMES E. BUTLER, JR. Principal Financial Officer and Principal
- --------------------------------------------------- Accounting Officer of each registrant and
James E. Butler, Jr. director of Venture Holdings Corporation
</TABLE>
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<PAGE> 216
VENTURE HOLDINGS TRUST
VALUATION AND QUALIFYING ACCOUNTS
FOR THE QUARTER ENDED MARCH 31, 1999 AND
THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C ADDITIONS COLUMN D COLUMN E
-------- ---------- ---------- ---------- ---------- ----------
CHARGED TO
BALANCE AT CHARGED TO OTHER BALANCE AT
ALLOWANCE FOR DOUBTFUL ACCOUNTS BEGINNING COSTS AND ACCOUNTS DEDUCTIONS END OF
FOR THE YEAR ENDED DECEMBER 31, OF PERIOD EXPENSES DESCRIBED DESCRIBED PERIOD
------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
For the quarter ended March 31,
1999............................... $4,518 $ 830 $0 $ (173) $5,175
For the year ended December 31,
1998............................... 3,572 3,226 0 (2,280) 4,518
For the year ended December 31,
1997............................... 2,781 1,635 0 (844) 3,572
For the year ended December 31,
1996............................... 1,679 3,175 0 (2,073) 2,781
</TABLE>
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<PAGE> 217
INDEX TO EXHIBITS
<TABLE>
<S> <C>
2.1** Share Purchase and Transfer Agreement between Klockner
Mercator Maschinenbau GmbH, on the one hand, and Venture
Beteiligungs GmbH and Venture Holdings Trust, on the other
hand, dated March 8, 1999, filed as Exhibit 2.1 to the
Issuer's Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 333-34475) and incorporated
herein by reference. Schedules to the Agreement, listed on
the last two pages of the Agreement, were not filed, but
will be provided to the Commission supplementally upon
request.
2.2** Share Purchase and Transfer Agreement among Neptuno
Verwaltungs-und-Treuhand-Gesellschaft mbH, and Venture
Verwaltungs GmbH and Venture Holdings Trust, dated March 8,
1999, filed as Exhibit 2.2 to the Issuer's Current Report on
Form 8-K on June 11, 1999 (File No. 333-34475) and
incorporated herein by reference.
2.3** Trust Contribution Agreement, made as of the 27th day of
May, 1999, by and between Venture Holdings Trust and Venture
Holdings Company LLC, filed as Exhibit 2.3 to the Issuer's
Current Report on Form 8-K on June 11, 1999 (File No.
333-34475) and incorporated herein by reference.
3.1* Restated Articles of Organization of Venture Holdings
Company LLC.
3.2** Restated Articles of Incorporation of Vemco, Inc., filed as
Exhibit 3.1 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and
incorporated herein by reference.
3.3** Restated Articles of Incorporation of Venture Industries
Corporation, filed as Exhibit 3.2 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.4** Restated Articles of Incorporation of Venture Mold &
Engineering Corporation, filed as Exhibit 3.3 to Venture's
Registration Statement on Form S-4, effective October 27,
1997 (Registration No. 333-34475), and incorporated herein
by reference.
3.5** Restated Articles of Incorporation of Venture Leasing
Company, filed as Exhibit 3.4 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.6** Restated Articles of Incorporation of Vemco, Leasing, Inc.,
filed as Exhibit 3.5 to Venture's Registration Statement on
Form S-4, effective October 27, 1997 (Registration No.
333-34475), and incorporated herein by reference.
3.7** Restated Articles of Incorporation of Venture Holdings
Corporation, filed as Exhibit 3.6 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.8** Restated Articles of Incorporation of Venture Service
Company, filed as Exhibit 3.7 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
3.9* Articles of Organization of Experience Management LLC.
3.10* Articles of Incorporation of Venture Europe, Inc.
3.11* Articles of Incorporation of Venture EU Corporation.
3.12* Amended and Restated Operating Agreement of Venture Holdings
Company LLC.
3.13** Bylaws of Vemco, Inc., filed as Exhibit 3.9 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
</TABLE>
<PAGE> 218
<TABLE>
<S> <C>
3.14** Bylaws of Venture Industries Corporation, filed as Exhibit
3.10 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.15** Bylaws of Venture Mold & Engineering Corporation, filed as
Exhibit 3.11 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826)
and incorporated herein by reference.
3.16** Bylaws of Venture Leasing Company, filed as Exhibit 3.12 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.17** Bylaws of Vemco Leasing, Inc., filed as Exhibit 3.13 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.18** Bylaws of Venture Holdings Corporation, filed as Exhibit
3.14 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.19** Bylaws of Venture Service Company, filed as Exhibit 3.15 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
3.20* Operating Agreement of Experience Management LLC.
3.21* Bylaws of Venture Europe, Inc.
3.22* Bylaws of Venture EU Corporation.
4.1* Indenture, dated as of May 27, 1999, between Venture
Holdings Trust and The Huntington National Bank, as Trustee,
regarding 11% Senior Notes due 2007 (including form of
Notes).
4.1.1* First Supplemental Indenture to the Indenture filed as
Exhibit 4.1, made as of the 27th day of May, 1999, by and
among Venture Holdings Trust and The Huntington National
Bank, as Trustee.
4.2* Indenture, dated as of May 27, 1999, between Venture
Holdings Trust and The Huntington National Bank, as Trustee,
regarding 12% Senior Subordinated Notes due 2009 (including
form of Notes).
4.2.1* First Supplemental Indenture to the Indenture filed as
Exhibit 4.2, made as of the 27th day of May, 1999, by and
among Venture Holdings Trust and The Huntington National
Bank, as Trustee.
4.3** Indenture for 9 1/2% Senior Notes due 2005 (including form
of Notes) filed as Exhibit 4.1 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
4.3.1* First Amendment to the Indenture incorporated by reference
as Exhibit 4.3, by and among Venture Holdings Trust, Vemco,
Inc. Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company,
Venture Mold & Engineering Corporation and Venture Service
Company, as Issuers, and The Huntington National Bank, as
Trustee, made as of the 27th day of May, 1999.
</TABLE>
<PAGE> 219
<TABLE>
<S> <C>
4.3.2* First Supplemental Indenture to the Indenture incorporated
by reference as Exhibit 4.3, by and among Venture Holdings
Trust, Vemco, Inc. Vemco Leasing, Inc., Venture Industries
Corporation, Venture Holdings Corporation, Venture Leasing
Company, Venture Mold & Engineering Corporation and Venture
Service Company, as Issuers, Venture Holdings Company LLC,
Experience Management LLC, Venture Europe, Inc. and Venture
EU Corporation, as Guarantors, and The Huntington National
Bank, as Trustee, made as of May 27, 1999.
4.3.3* Second Amendment to the Indenture incorporated by reference
as Exhibit 4.3, by and among Venture Holdings Trust, Vemco,
Inc. Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company,
Venture Mold & Engineering Corporation and Venture Service
Company, as Issuers, and The Huntington National Bank, as
Trustee, made as of May 27, 1999.
4.3.4* Second Supplemental Indenture to the Indenture incorporated
by reference as Exhibit 4.3, by and among Venture Holdings
Trust, Vemco, Inc. Vemco Leasing, Inc., Venture Industries
Corporation, Venture Holdings Corporation, Venture Leasing
Company, Venture Mold & Engineering Corporation and Venture
Service Company, as Issuers, Venture Holdings Company LLC,
and The Huntington National Bank, as Trustee, made as of May
27, 1999.
4.3.5* Guarantee executed by Venture Holdings Company LLC on the
27th day of May, 1999, pursuant to the terms of the
Indenture incorporated by reference as Exhibit 4.3,
including Trustee's Certificate of Authorization.
4.3.6* Guarantee executed by Experience Management LLC on the 27th
day of May, 1999, pursuant to the terms of the Indenture
incorporated by reference as Exhibit 4.3, including
Trustee's Certificate of Authorization.
4.3.7* Guarantee executed by Venture Europe, Inc. on the 27th day
of May, 1999, pursuant to the terms of the Indenture
incorporated by reference as Exhibit 4.3, including
Trustee's Certificate of Authorization.
4.3.8* Guarantee executed by Venture EU Corporation on the 27th day
of May, 1999, pursuant to the terms of the Indenture
incorporated by reference as Exhibit 4.3, including
Trustee's Certificate of Authorization.
4.4* Registrant Rights Agreement, made and entered into as of May
27, 1999, among Venture Holdings Trust, Vemco, Inc., Vemco
Leasing, Inc., Venture Industries Corporation, Venture
Holdings Corporation, Venture Leasing Company, Venture Mold
& Engineering Corporation, Venture Service Company, Venture
Europe, Inc., Venture EU Corporation, Experience Management
LLC and Venture Holdings Company LLC, as Issuers, and Banc
One Capital Markets, Inc. and Goldman Sachs & Co., as
Initial Purchasers.
5.1* Opinion of Dykema Gossett PLLC.
10.1* Credit Agreement, dated as of May 27, 1999, among Venture
Holdings Trust, the Lenders (as defined therein) and The
First National Bank of Chicago, as Administrative Agent.
10.1.1* First Amendment, dated June 4, 1999, to the Credit Agreement
filed as Exhibit 10.1.
10.2* ISDA Master Agreement, dated May 27, 1999, between Venture
Holdings Company LLC and The First National Bank of Chicago.
10.2.1* Schedules to the Agreement filed as Exhibit 10.2.
10.3* Corporate Opportunity Agreement, made and entered into on
the 27th day of May, 1999, by and between Larry J. Winget
and The Huntington National Bank, as Indenture Trustee.
</TABLE>
<PAGE> 220
<TABLE>
<S> <C>
10.4** Corporate Opportunity Agreement, dated February 16, 1994, by
and between Larry J. Winget and Comerica Bank, as Indenture
Trustee, filed as Exhibit 10.3 to Venture's Registration
Statement on Form S-4, effective October 27, 1997
(Registration No. 333-34475), and incorporated herein by
reference.
10.4.1** Agreement, dated July 9, 1997, by Larry J. Winget to be
bound by the terms of the Corporate Opportunity Agreement,
filed as Exhibit 10.3, for the benefit of the holders of the
Issuers' 9 1/2% Senior Notes due 2005 filed as Exhibit
10.3.1 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and
incorporated herein by reference.
10.5** Service Agreement, dated as of January 1, 1992, by and
between Venture Industries Corporation, Vemco, Inc., Venture
Mold & Engineering Corporation, Venture Leasing Company,
Vemco Leasing, Inc., Deluxe Pattern Corporation, Venture
Automotive Corp., Venture Sales & Engineering Corp. and
Venture Service Company, filed as Exhibit 10.11 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.6** Lease, dated as of November 1, 1990, by and among Venture
Industries Corporation, Venture Technical Development
Company, Venture Mold & Engineering Corporation, Vemco,
Inc., Deluxe Pattern Company, Venture Automotive Corp.,
Larry J. Winget and Alicia Winget (Acropolis Resort), filed
as Exhibit 10.14 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.7** Real Estate Lease Agreement, dated December 7, 1988, by and
between Harper Properties of Clinton Township Limited
Partnership and Venture Industries Corporation (Harper
Lease), filed as Exhibit 10.15 to Venture's Registration
Statement on Form S-1, effective February 8, 1994
(Registration No. 33-72826), and incorporated herein by
reference.
10.7.1** First amendment to Real Estate Lease Agreement, dated
December 30, 1993, by and between Harper Properties of
Clinton Township Limited Partnership and Venture Industries
Corporation (Harper Lease), filed as Exhibit 10.15.1 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.8** Machinery and Equipment Lease Agreement, dated as of
December 7, 1988, by and between Realven Corporation and
Venture Industries Corporation (Realven Lease), filed as
Exhibit 10.16 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.8.1** First Amendment to Machinery and Equipment Lease Agreement,
dated December 30, 1993, by and between Realven Corporation
and Venture Industries Corporation (Realven Lease), filed as
Exhibit 10.16.1 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.9** Real Estate Lease Agreement, dated as of January 27, 1989,
by and between Venture Real Estate, Inc. and Venture Mold &
Engineering Corporation (Commerce Road facility), filed as
Exhibit 10.17 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
</TABLE>
<PAGE> 221
<TABLE>
<S> <C>
10.10** Real Estate Lease Agreement, dated as of August 1, 1992, by
and between Venture Real Estate, Inc. and Venture Industries
Corporation (17400 Malyn), filed as Exhibit 10.18 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.11** Real Estate Lease Agreement, dated as of August 1, 1992, by
and between Venture Real Estate, Inc. and Venture Industries
Corporation (17350 Malyn), filed as Exhibit 10.19 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.12** Farm and Country Real Estate Company and Vemco, Inc. Real
Estate Availability and Usage Agreement, dated April 24,
1992, filed as Exhibit 10.20 to Venture's Registration
Statement on Form S-1, effective February 8, 1994
(Registration No. 33-72826), and incorporated herein by
reference.
10.13** Sales Representation Agreement by and between Vemco, Inc.
and Venture Sales & Engineering Corporation, filed as
Exhibit 10.21 to Venture's Registration Statement on Form
S-1, effective February 8, 1994 (Registration No. 33-72826),
and incorporated herein by reference.
10.13.1** Sales Representation Agreement by and between Venture
Industries Corporation and Venture Sales & Engineering
Corporation, filed as Exhibit 10.21.1 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.14** Manufacturing Agreement by and between Venture Automotive
Corp. and Vemco, Inc., filed as Exhibit 10.22 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.15** Machinery Usage Agreements between Larry J. Winget Living
Trust and Venture Industries Corporation, filed as Exhibit
10.23 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.15.1** Machinery Usage Agreement between Larry J. Winget Living
Trust and Vemco, Inc., filed as Exhibit 10.23.1 to Venture's
Registration Statement on Form S-1, effective February 8,
1994 (Registration No. 33-72826), and incorporated herein by
reference.
10.16** Machinery Usage Agreement between Deluxe Pattern Corporation
and Venture Mold & Engineering, filed as Exhibit 10.24 to
Venture's Registration Statement on Form S-1, effective
February 8, 1994 (Registration No. 33-72826), and
incorporated herein by reference.
10.17** Form of Machinery and Equipment Lease Agreement between
Venture Industries Corporation and Nova Industries, Inc.,
filed as Exhibit 10.25 to Venture's Registration Statement
on Form S-1, effective February 8, 1994 (Registration No.
33-72826), and incorporated herein by reference.
10.18** Form of Machinery and Equipment Lease Agreement between
Venture Industries Corporation and Nova Industries, Inc.,
filed as Exhibit 10.26 to Venture's Registration Statement
on Form S-1, effective February 8, 1994 (Registration No.
33-72826), and incorporated herein by reference.
10.19* Indemnification Agreement between the Company and Larry J.
Winget.
10.20* Indemnification Agreement between the Company and Michael G.
Torakis.
10.21* Indemnification Agreement between the Company and A. James
Schutz.
</TABLE>
<PAGE> 222
<TABLE>
<S> <C>
10.22** Insurance Policies issued by Pompo Insurance & Indemnity Company Ltd. to the Registrants and
affiliated companies, filed as Exhibit 10.32 to Venture's Registration Statement on Form S-1,
effective February 8, 1994 (Registration No. 33-72826), and incorporated herein by reference.
10.23** Real Estate Usage Agreement between Venture Real Estate Acquisition Company and Venture Industries
Corporation, dated February 15, 1995, filed as Exhibit 10.23 to Venture's Registration Statement on
Form S-4, effective October 27, 1997 (Registration No. 333-34475), and incorporated herein by
reference.
10.24** Machinery Usage Agreement between Venture Equipment Acquisition Company and Venture Industries
Corporation, dated February 15, 1995, filed as Exhibit 10.24 to Venture's Registration Statement on
Form S-4, effective October 27, 1997 (Registration No. 333-34475), and incorporated herein by
reference.
10.25** Venture Industries Group Participation Agreement between Venture Industries Corporation and Venture
Asia Pacific Pty Ltd. filed as Exhibit 10.29 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and incorporated herein by reference.
10.26** License Agreement as to Proprietary Technologies and Processes, dated July 2, 1997, between Larry J.
Winget and Venture Industries Corporation, Vemco, Inc., Venture Mold & Engineering Corporation,
Venture Industries Canada Ltd., Vemco Leasing, Inc., Venture Leasing Company, Venture Service
Company, Venture Holdings Corporation and Venture Holdings Trust filed as Exhibit 10.30 to Venture's
Registration Statement on Form S-4, effective October 27, 1997 (Registration No. 333.34475), and
incorporated herein by reference.
10.27** License Agreement as to Patents, dated July 2, 1997, between Larry J. Winget and Venture Industries
Corporation, Vemco, Inc., Venture Mold & Engineering Corporation, Venture Industries Canada Ltd.,
Vemco Leasing, Inc., Venture Leasing Company, Venture Service Company, Venture Holdings Corporation
and Venture Holdings Trust filed as Exhibit 10.31 to Venture's Registration Statement on Form S-4,
effective October 27, 1997 (Registration No. 333-34475), and incorporated herein by reference.
12.1* Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21.1* Subsidiaries of the Registrants.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of BDO International GmbH Wirtschaftsprufungsgesellschaft.
23.3* Consent of Dykema Gossett PLLC (contained in their opinion filed as Exhibit 5.1).
24.1* Power of Attorney (included on signature page to this Registration Statement).
25.1* Statement of Eligibility of Trustee related to 11% Senior Notes due 2007.
25.2* Statement of Eligibility of Trustee related to 12% Senior Subordinated Notes due 2009.
99.1* Form of Letter of Transmittal related to exchange for the Senior Exchange Notes.
99.2* Form of Notice of Guaranteed Delivery related to exchange for the Senior Exchange Notes.
</TABLE>
<PAGE> 1
EXHIBIT 3.1
RESTATED ARTICLES OF ORGANIZATION
Pursuant to the provisions of Act 23, Public Acts of 1993, the
undersigned limited liability company executes the following Restated Articles:
1. The name of the limited liability company is: Venture Holdings
Company LLC
2. The identification number assigned by the Bureau is: B53889
3. All former names of the limited liability company are: N/A
4. The date of filing the original Articles of Organization was:
May 21, 1999
The following Restated Articles of Organization supersede the Articles
of Organization, as amended, and shall be the Articles of Organization for the
limited liability company.
ARTICLE I
FORMATION
SECTION 1.1 NAME AND OWNERSHIP
NAME. The name of the limited liability company is: VENTURE
HOLDINGS COMPANY LLC (the "LLC").
SINGLE OWNER. The LLC shall only have one owner. No transfer of
ownership by any owner of the LLC shall be effective if its
violates this provision.
SECTION 1.2 PURPOSE
The purpose or purposes for which the LLC is formed is:
To own the stock and other equity interests of and securities in one or more of
the following: Venture Industries Corporation, Venture Mold & Engineering
Corporation, Venture Industries Canada Ltd., Vemco, Inc., Vemco Leasing, Inc.,
Venture Leasing Company, Venture Holdings Corporation and Venture Service
Company, Experience Management LLC (which, together with the stock, equity
interests and securities of other entities from time to time transferred to this
LLC, are each herein referred to as a "Company" and together are referred to as
the "Companies").
To own insurance policies on the life of Larry J. Winget.
To, pursuant to the Loan Facilities (as herein defined) borrow and repay monies
and any other purposes permitted by the Act
<PAGE> 2
except as prohibited by Article III hereof.
SECTION 1.3 INITIAL REGISTERED OFFICE
(A) ADDRESS. The street address of the LLC is 33662 James J. Pompo Dr., Fraser,
MI 48026.
The Post Office address of the LLC is Post Office Box 278, Fraser, MI 48026.
SECTION 1.4 DURATION
(A) MAXIMUM. The maximum duration of the LLC is: perpetual.
SECTION 1.5 RESIDENT AGENT
(A) NAME. The name and address of the resident agent of the LLC is: ROBERT
SILVERMAN, 33662 James J. Pompo Dr., P.O. Box 278, Fraser, Michigan 48026.
ARTICLE II
TOTAL SHARES
SECTION 2.1 CAPITAL SHARES.
OWNERSHIP. The owner(s) of the LLC shall be the members. Members shall own the
LLC in proportion to their membership interests. Membership interests shall be
represented by Class A common shares. Class A common shares certificates
representing the membership interest(s) shall be in the form adopted pursuant to
the Operating Agreement.
AUTHORIZED CAPITAL SHARES. The total authorized membership capital shares of
the LLC is 60,000 shares of Class A common.
ARTICLE III
PROHIBITED ACTIVITIES
SECTION 3.1 ACTIVITIES PROHIBITED TO THE LLC
In any event, the LLC shall not have the power to:
<PAGE> 3
(A) Do any act prohibited to Venture Holdings Trust or otherwise violate the
terms of the following loan facilities owed or guaranteed by the LLC or one or
more of the Companies, so long as they are Outstanding:
A "Senior Secured Credit Facility" with loans due 2004 and 2005 in an initial
amount of $575,000,000;
A "1997 Senior Unsecured Notes Facility" due 2005 in an initial amount of
$205,000,000;
A "1999 Senior Notes Facility" due 2007 in an initial amount of $125,000,000;
and
A "1999 Senior Subordinated Notes Facility" due 2009 in an initial amount of
$125,000,000;
(together, with any other loan facilities designated as such by an instrument
signed by or guaranteed by the LLC or one or more of the Companies, as any or
all of such loan facilities many be, in whole or in part, amended, renewed,
extended, substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time (including without limitation any
successive renewals, extensions, substitutions, refinancings, restructurings,
replacements, supplements or other modifications of the foregoing), "Loan
Facilities").
A Loan Facility shall only be considered "Outstanding" if it has not been
satisfied and discharged or, to the extent permitted by the Loan Facility in
question, subject to a legal or covenant defeasance.
Engage in the active conduct of any business whatsoever.
Authorize any distribution from any Subsidiary unless the same is pursuant to a
Special Advisor or Successor Special Advisor Group's Direction which Direction
shall certify that the distribution requirements of the Outstanding Loan
Documents have been complied with.
Do any act in contravention of the provisions of Article IV.
ARTICLE IV
CORPORATE OPPORTUNITIES COMMITMENT
SECTION 4.1 FAIRNESS COMMITTEE
Pursuant to the obligations set forth in the Outstanding Loan Facilities:
(A) The LLC will establish and maintain a Fairness Committee, at least one of
whose members shall be Independent.
(B) The Fairness Committee shall have such rights and duties and shall act by
such procedures and in such manner as the Special Advisor or Successor Special
Advisor Group shall determine from time to time, provided that no such
determination shall limit or otherwise interfere with the rights and duties of
the Fairness Committee as herein set forth.
<PAGE> 4
SECTION 4.2 AFFILIATE TRANSACTIONS AND CORPORATE OPPORTUNITIES
(A) The Fairness Committee, to the extent provided in the Outstanding Loan
Documents, shall review and approve of affiliate transactions.
The Fairness Committee, to the extent provided in the Outstanding Loan
Documents, shall review and make decisions regarding corporate opportunities.
The Fairness Committee shall have such additional rights and duties as provided
for in the Outstanding Loan Documents or requested by the Managers of the LLC.
ARTICLE V
MANAGEMENT
SECTION 5.1 MANAGER-MANAGED
IN GENERAL. The business of the LLC shall be managed by or under the authority
of 1 or more managers, who shall have the rights and duties set forth herein.
The managers of the LLC shall be the Special Advisor (who shall exercise all of
the powers of the Administrator, Active Business Advisory Group and Financial
Advisor), and, upon the death, Disability or Unavailability of the Special
Advisor, the Successor Special Advisor Group, all as defined in and provided for
herein and in the Operating Agreement of the LLC.
ARTICLE VI
MEMBERSHIP VOTING
SECTION 6.1 IN GENERAL
MAJORITY VOTE. A vote of a majority of all membership shares entitled to vote
is required to approve any matter submitted for a vote by the members.
AUTHORIZATION BY MEMBERS. The following actions may be authorized only by
members of the LLC, and not by the managers:
The dissolution of the LLC.
Merger of the LLC.
An amendment to the Articles of Organization.
AUTHORIZATION FOR TRANSACTIONS. A transaction with the LLC or a transaction
connected with the conduct or winding up of the LLC in which a manager of the
LLC has a direct or indirect interest
<PAGE> 5
or a manager's personal use of property of the LLC may be authorized or ratified
only by a vote of the members of the LLC.
The manager shall disclose all material facts regarding the transaction and the
manager's interest in the transaction or all material facts about the manager's
personal use of the LLC's property before the members vote on that transaction
or use.
AUTHORIZATION FOR SALE OR TRANSFER OF ASSETS. The sale, exchange, lease, or
other transfer of all or substantially all of the assets of the LLC, other than
in the ordinary course of business, may be authorized only by a vote of the
members of the LLC.
ARTICLE VII
MANAGER'S BREACH OF DUTY
SECTION 7.1 IN GENERAL
(A) LIABILITY. The monetary liability of a manager to the LLC or its members
for breach of any duty shall be as set forth in the Operating Agreement.
SECTION 7.2 INDEMNIFICATION
MANAGER. The LLC shall indemnify and hold harmless a manager from and against
any and all losses, expenses, claims, and demands sustained by reason of any
acts or omissions or alleged acts or omissions as a manager, including
judgments, settlements, penalties, fines, or expenses incurred in a proceeding
to which the person is a party or threatened to be made a party because he or
she is or was a manager, to the extent provided for in the Operating Agreement
or in a contract with the person, or to the fullest extent permitted by agency
law subject to any restriction in the Operating Agreement or contract, except
that the company may not indemnify any person for conduct described in Michigan
limited liability company act sections 407(a), (b), or (c).
INSURANCE. The LLC may purchase and maintain insurance on behalf of a manager
against any liability or expense asserted against or incurred by the individual
or her in any such capacity or arising out of the individual's status as a
manager, whether or not the company could indemnify the individual against
liability.
<PAGE> 6
ARTICLE VIII
MEMBERS' QUALIFICATIONS AND LIABILITY
SECTION 8.1 IN GENERAL
(A) ADMISSION AS MEMBER. A person shall be admitted as a member of the LLC in
one or more of the following ways:
Upon the formation of the LLC, by executing and filing the Articles of
Organization or by signing the initial Operating Agreement.
(2) After the formation of the LLC, in one or more of the following ways:
In the case of a person acquiring a membership interest directly from the LLC,
by complying with the provisions of the Operating Agreement prescribing the
requirements for admission or, in the absence of provisions prescribing the
requirements for admission in the Operating Agreement, upon the unanimous vote
of the members entitled to vote.
(b) In the case of an assignee of a membership interest.
(B) LIABILITY. A person who is a member or manager, or both, of the LLC is not
liable for the acts, debts, or obligations of the LLC.
These Restated Articles amend the Articles of Organization and were approved on
the ___ day of June, 1999 in accordance with Section 604 of the Act by unanimous
vote of all of the members entitled to vote.
This document is hereby signed as required by Section 103 of the Act.
Signed:
Venture Holdings Trust, Its Sole Member
/s/ Larry J. Winget
- -------------------
By: Larry J. Winget
Its: Trustee & Special Advisor
<PAGE> 1
MICHIGAN Exhibit 3.9
DEPARTMENT OF
COMMERCE -
CORPORATION AND
SECURITIES BUREAU
================================================================================
Date Received (FOR BUREAU USE
ONLY)
================================================================================
Name
Paul Lieberman,
P.C.
==============================================
Address
1471 S. Woodward,
Ste. 250
==============================================
City EFFECTIVE DATE:
State
Zip Code
Bloomfield Hills,
MI
48302
==============================================
Document will be returned to the name and address you enter above.
ARTICLES OF ORGANIZATION B__________________
FOR USE BY DOMESTIC LIMITED LIABILITY COMPANIES
(Please read information and instructions on last page)
Pursuant to the provisions of Act 23, Public Acts of 1993, the undersigned
execute the following Articles:
ARTICLE I
================================================================================
The name of the limited liability company is: Experience Management LLC
----------------------------------
================================================================================
ARTICLE II
================================================================================
The purpose or purposes for which the limited liability company is formed is to
engage in any activity within the purposes for which a limited liability company
may be formed under the Limited Liability Company Act of Michigan.
================================================================================
ARTICLE III
================================================================================
The duration of the limited liability company if other than perpetual is:
Perpetual
- ---------
================================================================================
<PAGE> 2
================================================================================
ARTICLE IV
1. The street address of the location of the registered office is:
33662 James J. Pompo Dr., Fraser Michigan 48026
------------------------------------------------------------- ----------
(Street Address) (City) (ZIP Code)
2. The mailing address of the registered office if different than above:
P.O. Box 278 Fraser , Michigan 48026
------------------------------------------------ ----------
(Street Address or P.O. Box) (City) (ZIP Code)
3. The name of the resident agent at the registered office is:
Robert Silverman
---------------------------
================================================================================
ARTICLE V (Insert any desired additional provision authorized by the Act; attach
additional pages if needed.)
================================================================================
================================================================================
Signed this 21st day of November , 1997
----------------- --------------------------------
By /s/ James E. Butler /s/ James E. Butler
--------------------------- ------------------------
Venture Holdings Trust Venture Service Company
By: James E. Butler By: James E. Butler
Its: Vice President Its: Vice President
<PAGE> 1
EXHIBIT 3.10
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES & LAND DEVELOPMENT BUREAU
- --------------------------------------------------------------------------------
Date Received (FOR BUREAU USE ONLY)
This document is effective on the date filed, unless
a subsequent effective date within 90 days after
received date is stated in the document.
Name
Paul Lieberman, P.C.
- ---------------------------------------------
Address
1471 S. Woodward, Ste. 250 City
- ---------------------------------------------
State Zip Code
Bloomfield Hills, MI 48302 EFFECTIVE DATE:
- ---------------------------------------------
- --------------------------------------------------------------------------------
Document will be returned to the name and address you enter above.
If left blank document will be mailed to the registered office.
CID Number:
--------------
ARTICLES OF INCORPORATION
---------------------------------------
For use by domestic profit corporations
Pursuant to the provisions of Act 284, Public Acts of 1972, the
undersigned corporation executes the following Articles:
ARTICLE I
The name of the corporation is: Venture Europe, Inc.
ARTICLE II
The purpose or purposes for which the corporation is formed is to
engage in any activity within the purposes for which corporations may be formed
under the Business Corporation Act of Michigan.
<PAGE> 2
ARTICLE III
The total authorized shares:
1. Common Shares 60,000.
----------------------------------------------------------
2. Preferred Shares
-------------------------------------------------------
3. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
ARTICLE IV
1. The address and the mailing address of the initial registered office is:
33662 James J. Pompo Drive, Fraser, Michigan 48026
------------------------------------------------------------------------
2. The mailing address of the registered office, if different than above:
P.O. Box 278, Fraser, Michigan 48026
------------------------------------------------------------------------
The name of the resident agent at the registered office is:
Robert Silverman
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Residence or Business Address
Timothy M. Bradley 1471 S. Woodward, Ste. 250, Bloomfield Hills,
MI 48302
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 3/4 in value of the creditors or class of creditors, or of the
2
<PAGE> 3
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement or a reorganization, agree to a compromise or arrangement or a
reorganization of this corporation as a consequence of the compromise or
arrangement, the compromise or arrangement and the reorganization, if sanctioned
by the court to which the application has been made, shall be binding on all the
creditors or class of creditors, or on all the shareholders or class of
shareholders and also on this corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without prior
notice, and without a vote, if consents in writing, setting forth the action so
taken, are signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present and
voted. The written consents shall bear the date of signature of each shareholder
who signs the consent. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to
shareholders who would have not consented in writing.
I (We), the incorporator(s) sign my (our) name this 5th day of March, 1999.
/s/ Timothy M. Bradley
- ---------------------------- -------------------------------
- ---------------------------- -------------------------------
- ---------------------------- -------------------------------
- ---------------------------- -------------------------------
3
<PAGE> 1
EXHIBIT 3.11
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES & LAND DEVELOPMENT BUREAU
- --------------------------------------------------------------------------------
Date Received (FOR BUREAU USE ONLY)
This document is effective on the date filed, unless
a subsequent effective date within 90 days after
received date is stated in the document.
Name
PAUL LIEBERMAN, P.C.
- ----------------------------------------------------
Address
1471 S. Woodward, Suite 250 City
- ----------------------------------------------------
State Zip Code
Bloomfield Hills, Michigan 48302 EFFECTIVE DATE:
- ----------------------------------------------------
- --------------------------------------------------------------------------------
Document will be returned to the name and address you enter above.
If left blank document will be mailed to the registered office.
CID Number: ______________
ARTICLES OF INCORPORATION
---------------------------------------
For use by domestic profit corporations
Pursuant to the provisions of Act 284, Public Acts of 1972, as
amended, the undersigned corporation executes the following Articles:
ARTICLE I
The name of the corporation is: Venture EU Corporation
ARTICLE II
The purpose or purposes for which the corporation is formed is to
engage in any activity within the purposes for which corporations may be formed
under the Business Corporation Act of Michigan.
<PAGE> 2
ARTICLE III
The total number of shares of authorized shares:
1. Common Shares 60,000 .
--------------------------------------------------------
2. Preferred Shares .
-----------------------------------------------------
3. A Statement of all or any of the relative rights, preferences and
limitations of each class is as follows:
ARTICLE IV
1. The address and the mailing address of the initial registered office is:
33662 James J. Pompo Drive, Fraser, Michigan 48026
---------------------------------------------------------------------
2. The mailing address of the registered office, if different than above:
---------------------------------------------------------------------
3. The name of the resident agent at the registered office is:
Robert Silverman
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Residence or Business Address
Paul Lieberman 1471 S. Woodward Ave., Ste. 250 Bloomfield,
MI 48302
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 3/4 in value of the creditors or class of creditors, or of the
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement
2
<PAGE> 3
or a reorganization, agree to a compromise or arrangement or a reorganization of
this corporation as a consequence of the compromise or arrangement, the
compromise or arrangement and the reorganization, if sanctioned by the court to
which the application has been made, shall be binding on all the creditors or
class of creditors, or on all the shareholders or class of shareholders and also
on this corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without prior
notice, and without a vote, if consents in writing, setting forth the action so
taken, are signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present and
voted. The written consents shall bear the date of signature of each shareholder
who signs the consent. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to
shareholders who would have not consented in writing.
I (We), the incorporator(s) sign my (our) name(s) this 13th day of May, 1999.
/s/ Paul Lieberman
- --------------------------------- ----------------------------------
- --------------------------------- ----------------------------------
- --------------------------------- ----------------------------------
- --------------------------------- ----------------------------------
Name of person or organization Preparer's name and business
remitting fees: telephone number:
Paul Lieberman, P.C. Paul Lieberman
(248) 335-4000
3
<PAGE> 1
EXHIBIT 3.12
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
VENTURE HOLDINGS COMPANY LLC
(EFFECTIVE MAY 27, 1999)
THIS AMENDED AND RESTATED OPERATING AGREEMENT IS ENTERED INTO AS OF THE 27TH DAY
OF MAY, 1999 BY AND BETWEEN LARRY J. WINGET ACTING IN HIS CAPACITY AS SPECIAL
ADVISOR OF AND FOR VENTURE HOLDINGS COMPANY LLC AND LARRY J. WINGET ACTING IN
HIS CAPACITY AS SPECIAL ADVISOR OF AND FOR VENTURE HOLDINGS TRUST, THE SOLE
MEMBER OF VENTURE HOLDINGS COMPANY LLC (herein, the "LLC") AS FOLLOWS:
WHEREAS VENTURE HOLDINGS COMPANY LLC has been established;
AND WHEREAS it is the purpose or purposes for which the LLC is formed is:
To own the stock and other equity interests of and securities in one or
more of the following: Venture Industries Corporation, Venture Mold &
Engineering Corporation, Venture Industries Canada Ltd., Vemco, Inc., Vemco
Leasing, Inc., Venture Leasing Company, Venture Holdings Corporation, Venture
Service Company and Experience Management LLC (which, together with the stock,
equity interests and securities of other entities from time to time transferred
to this LLC, are each herein referred to as a "Company" and together are
referred to as the "Companies").
To own insurance policies on the life of Larry J. Winget.
To, pursuant to the Loan Facilities (as herein defined), borrow and repay
moneys.
AND WHEREAS the LLC has agreed to be liable for the obligations of VENTURE
HOLDINGS TRUST under the following loan facility:
A "1997 Senior Unsecured Notes Facility" due 2005 in an initial amount
of $205,000,000; (the "Senior Unsecured Facility");
AND WHEREAS, the LLC has agreed to be a borrower or guarantor of the following
loan facilities:
A "Senior Secured Credit Facility" with loans due 2004 and 2005 in an
initial amount of $575,000,000;
A "1999 Senior Notes Facility" due 2007 in an initial amount of
$125,000,000; and
A "1999 Senior Subordinated Notes Facility" due 2009 in an initial
amount of $120,000,000;
(together, with any other loan facilities designated as such by an instrument
signed by or guaranteed by the LLC or one or more of the Companies, as any or
all of such loan facilities many be, in whole
1
<PAGE> 2
or in part, amended, renewed, extended, substituted, refinanced, restructured,
replaced, supplemented or otherwise modified from time to time (including
without limitation any successive renewals, extensions, substitutions,
refinancings, restructurings, replacements, supplements or other modifications
of the foregoing), "Loan Facilities").
A Loan Facility shall only be considered "Outstanding" if it has not
been satisfied and discharged or, to the extent permitted by the Loan Facility
in question, subject to a legal or covenant defeasance.
ARTICLE I
DEFINITIONS
SECTION 1.1 POWERS OF THE LLC
Subject to the limitations set forth in Section 2.1, the LLC, acting
through the Administrator (who shall act, if not otherwise authorized to act,
pursuant to either (i) the authority specifically granted by this LLC to the
Administrator and / or (ii) the implied or expressed direction of the Special
Advisor or Successor Special Advisor Group and Financial Advisor acting as
provided for in Article VI), shall have the power to do all acts reasonably
necessary:
(A) To hold cash and cash type instruments and to open and to close
checking and savings accounts and/or safety deposit boxes in banks or
similar financial institutions, in the name of the Administrator or in
the name of a nominee, with or without indication of any fiduciary
capacity; to deposit cash in and withdraw cash from such accounts
and/or boxes, with or without indication of any fiduciary capacity; to
hold such accounts and/or securities in bearer form, or in the name of
the Administrator or in the name of a nominee with or without
indication of any fiduciary capacity.
(B) To employ investment counsel, brokers, accountants, attorneys and any
other Administrators to act in the LLC's behalf, to do any act or thing
necessary, incidental or convenient to the proper administration of the
LLC.
From time to time to determine the authority of, appoint and terminate
a set of "Officers" of the LLC, who shall have the powers and duties set forth
in, and act pursuant to, resolutions of the Special Advisor or Successor Special
Advisor Group from time to time made; provided that no such Officer shall have
any power or duty which the Special Advisor or Successor Special Advisor Group
could not itself exercise at that time; which shall initially be:
LARRY J. WINGET CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
<PAGE> 3
MICHAEL G. TORAKIS PRESIDENT
CHIEF OPERATING OFFICER
A. JAMES SCHUTZ EXECUTIVE VICE PRESIDENT
JAMES E. BUTLER, JR. EXECUTIVE VICE PRESIDENT
CHIEF FINANCIAL OFFICER
LARRY J. WINGET, JR. EXECUTIVE VICE PRESIDENT (FOR EXECUTING
DOCUMENTS RELATING TO THE FINANCING FOR THE
PEGUFORM PURCHASE ONLY)
JOSEPH R. TIGNANELLI EXECUTIVE VICE PRESIDENT (FOR EXECUTING
DOCUMENTS RELATING TO THE FINANCING FOR THE
PEGUFORM PURCHASE ONLY)
JAMES E. BUTLER, JR. SECRETARY
TREASURER
ALICIA WINGET ASSISTANT SECRETARY
JOSEPH R. TIGNANELLI ASSISTANT SECRETARY
(D) From time to time to determine the authority of, appoint and terminate
one or more "attorney(s)-in-fact" for the Special Advisor or Successor
Special Advisor Group who shall have the powers and duties set forth
in, and act pursuant to, powers expressly given to such
attorney(s)-in-fact pursuant to express written powers of attorney of
the Special Advisor or Successor Special Advisor Group from time to
time made; provided that no such attorney-in-fact shall have any power
or duty which the Special Advisor or Successor Special Advisor Group
could not itself exercise at that time.
(E) To borrow moneys and receive and expend the proceeds therefrom,
including pursuant to the Outstanding Loan Facilities and other loans
not prohibited by the Outstanding Loan Facilities.
(F) To execute any other documents from time to time as may be reasonably
necessary to establish, continue, renew, extend or expand the
relationship with the lenders or to exercise any of the powers of the
borrower under the Loan Documents.
(G) To repay, guarantee, renegotiate, amend, renew, extend, substitute for,
refinance, restructure, replace, supplement or otherwise modify from
time to time (including without limitation any successive renewals,
extensions, substitutions, refinancings, restructurings, replacements,
supplements or other modifications of the foregoing), any of the
Outstanding Loan Facilities
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or other loans.
(H) To make payments or distributions of the LLC property to the member,
except as otherwise prohibited by the Outstanding Loan Facilities."
(I) To loan sums of money (except as may be prohibited by the Outstanding Loan
Facilities).
(J) To demand loan repayments from the Companies.
(K) To vote upon, approve and direct distributions and liquidations by the
Companies, but not in violation of any Outstanding Loan Facility.
(L) To reinvest income and the proceeds from the sale or hypothecation of
LLC assets in new ventures, including the purchase of shares,
obligations or other interests in any entity.
(M) To vote interests of the Companies and to give general proxies or
powers of attorney for voting or acting with respect to shares,
obligations or other interests in entities in which the LLC shall from
time to time have an investment interest, which proxies or powers of
attorney may be discretionary if the Administrator so provides, and
with power of substitution of the proxy holder.
(N) To accomplish the conversion or reconstitution, merger, consolidation,
reorganization, liquidation, termination or freezing of the LLC or the
Companies.
(O) To deposit shares or securities with, or transfer them to, protective
committees or similar bodies and join in any reorganization and pay
assessments or subscriptions called for in connection with shares,
interests or obligations held by the LLC.
(P) To make contracts and guarantees or otherwise incur liabilities, borrow
money, issue its notes, bonds, or other obligations, or secure any of
its obligations by mortgage or pledge of all or any of the LLC's
property and income, in addition to those transactions expressly
permitted herein.
(Q) In the LLC's name, to adjust, arbitrate, assign, compromise, sue or
defend, release, abandon or otherwise deal with any and all claims or
debts in favor of or against the LLC; provided, however, that such does
not violate any Outstanding Loan Facility.
(R) To purchase, take, receive, lease, or otherwise acquire, own, hold,
improve, use and otherwise deal in and with, real or tangible personal
property, or any interest therein, wherever situated.
(S) To be a member, partner, or associate of any LLC, partnership, joint
venture or other enterprise.
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(T) To sell, hypothecate, convey, lease, exchange, transfer or otherwise
dispose of all or any part of the LLC property and assets.
(U) To appoint and terminate member of the "Fairness Committee".
(V) To exercise any and all other powers necessary or reasonable in order
to manage and operate the LLC and its assets, including, but not
limited to doing any act or thing, including the signing and executing
of all instruments and documents, necessary, incidental or convenient
to the proper administration of the Administrator's duties or powers
which are herein set forth.
(W) Any other powers necessary or reasonable in order to carry out the
duties herein provided for the Fiduciaries.
The power to execute any and all documents which the Special Advisor or
Successor Special Advisor Group directs the Administrator to execute or which
reflect the powers the Administrator otherwise has.
For the purposes of this Operating Agreement, the following definitions
shall apply:
"Administrator(s)" are as from time to time designated in Article IV.
"Administrator(s)' Certification" is as defined in Article IV.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person (or any partner of such
Person) or (ii) any other Person that owns, directly or indirectly, 10% or more
of such Person's (or any partner of such Person's) voting equity interests or
any executive officer or director of either of such other Persons. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person
directly or indirectly, whether through ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Business Entity" means any entity or unincorporated business of which
the LLC owns, directly or indirectly, at least thirty percent (30%).
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of the Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties at such time.
"Entities Sub-Group" is as from time to time constituted pursuant to
Article VI.
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"Fairness Committee" means a committee (i) appointed by the Special
Advisor or Successor Special Advisor Group and (ii) designated in a Loan
Facility as the entity whose approval (and the approval of a majority of its
Independent member) is required in order for the LLC to be authorized to enter
into specified transactions or take specified actions.
"Family Member" shall be construed to include only The Wingets and
their issue.
"Family Sub-Group" is as from time to time constituted pursuant to Article
VI.
"Fiduciary" means a Administrator, Special Advisor, member of the
Successor Special Advisor Group, Financial Advisor, member of the Active
Business Advisory Group, acting in such capacity.
"Incapacity" or "Incapacitated" means that an interested party has
determine that any named Fiduciary (or successor Fiduciary) has become so
mentally or physically incapacitated through illness, age or other cause that
they are probably unable to carry out one or more of the duties which they have
been entrusted with under this LLC and (i) such allegation is made in writing to
the Administrator(s) (or the any member of the successor Special Advisor Group
if the person in question is a then Administrator) and confirmed by the written
statement of two (2) registered doctors (neither of whom shall be held liable
for making or refusing to make such statement), one of whom is such person's
family or attendant physician if available, that such person is probably unable
to carry out one or more of such duties, or (ii) if the Administrator(s) (or the
successor Special Advisor in the case that the person in question is a then
Administrator) determines by any other means that the person in question is
unable to carry out one or more of such duties.
"Independent" means a person who would qualify as an "independent
director" within the meaning of the rules of the New York Stock Exchange and who
(i) shall not receive any payment or other fees for services to the LLC or any
of its Affiliates (other than for serving as a member of the Fairness Committee
of the LLC or an Affiliate) and (ii) shall not be an Affiliate, officer, member
or employee of any firm, company or other entity that has performed services for
the LLC or any of its Affiliates during the preceding three fiscal years or that
the LLC or any of its Affiliates proposes to have perform services if the amount
of compensation for such services during any fiscal year exceeded or would
exceed 5% of such firm's gross revenues during any of its three preceding fiscal
years.
"Issue" shall be construed to include any natural or legally adopted human
beings.
"Loan Document(s)" shall mean one or more documents representing the
commitment of the Companies under the Outstanding Loan Facilities. A Loan
Facility shall only be considered "Outstanding" if it has not been satisfied and
discharged or, to the extent permitted by the Loan Facility in question, subject
to a legal or covenant defeasance.
"Minor" shall mean a person under the age of eighteen years,
notwithstanding that the
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statutory age of majority may be otherwise.
"Person" means any individual, corporation, LLC, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivisions thereof.
"Power Exercise" means an action taken pursuant to the provisions of
Article VI by the Financial Advisor, Special Advisor, Active Business Advisory
Group, Entities Sub-Group and/or Family Sub-Group as therein provided for.
"Special Advisor" is as from time to time determined pursuant to Article
VI.
"Subsidiary" means any entity of which more than 50% of the total
voting power is owned or controlled, directly or indirectly, by its parent.
"Successor Special Advisor Group" is as from time to time determined
pursuant to Article VI.
"Tax Distribution" means the Administrators' determination of the
greatest amount permitted by the most restrictive Loan Document(s) as being
available to the LLC for tax distributions (the "Tax Distribution Amounts") and
taking all actions necessary and / or reasonable to cause the Companies which
generate a portion of the Tax Distribution Amounts to distribute such amounts (a
"Tax Distribution") to the LLC.
"The Wingets" refer to Larry J. Winget and Alicia J. Winget.
"Unavailable" or "Unavailability" means:
(A) (1)(a) That (i) the Administrator(s) after a diligent search and, (ii) as
far as the Administrator(s) are able to determine, given a reasonable
inquiry, no interested party has had for a period of fourteen (14) days
contact with the person in question; or (b) if the person in question is a
Fiduciary, he or she has been unwilling or unable to perform the duties
required of such Fiduciary for a period of thirty (30) days after having
been requested to do so and such unwillingness or inability is unreasonable
in light of the circumstances; and (2) in either event, any interested
party to this LLC has alleged in writing to the Administrator (or if the
person in question is the Administrator, to the Special Advisor or
Successor Special Advisor Group) that the person in question is either
unable or unwilling to so act.
(B) If any such person is Incapacitated or Unavailable, then the provisions
for succession herein set forth shall apply.
(C) Whether or not the person in question is no longer under an Incapacity
or is no longer Unavailable shall be determined by a like process as
that used in determining the Incapacity
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or Unavailability. Upon such determination, the person is question
shall reassume all of the title, powers, rights, discretion,
obligations and immunities he or she possessed before the Incapacity or
Unavailability.
(D) The person succeeding the person in question shall not be liable for
any claim whatsoever which may arise merely as a result of his or her
deciding to assume from or return to the person in question the duties
of the next succeeding person pursuant to this provision, even if such
assumption or return violates the terms of this LLC and/or was
unreasonable.
(E) The Administrator(s) and/or the Special Advisor or Successor Special
Advisor Group shall not be liable for any claim whatsoever which may
arise merely as a result of their deciding to assume from or return to
the such person the duties of a Fiduciary pursuant to this provision,
even if such assumption or return violates the terms of this LLC and/or
was unreasonable.
ARTICLE II
MANAGEMENT
SECTION 2.1 MANAGER DURING LARRY WINGET'S LIFE. As more specifically provided
for herein, unless he shall become Disabled or Unavailable, Larry J. Winget
shall be the only Manager of the LLC. Subject to the powers of the Fairness
Committee as set forth in Article III, he shall exercise all of the management
powers of the LLC (including the power of Administrator, Active Business
Advisory Group and Financial Advisor) in his capacity as Special Advisor.
SECTION 2.2 MANAGER UPON LARRY WINGET'S DEATH, DISABILITY OR UNAVAILABILITY.
As more specifically provided for herein, upon Larry J. Winget's death,
Disability or Unavailability, the Successor Special Advisor Group shall be
Manager of the LLC, subject to the powers of the Fairness Committee as set forth
in Article III, it shall exercise its management powers of the LLC in its
capacity as Successor Special Advisor Group.
The Successor Special Advisor Group shall consist of:
The Active Business Advisory Group, as herein defined.
The Financial Advisor, as herein defined.
ARTICLE III
CORPORATE OPPORTUNITIES COMMITMENT
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SECTION 3.1 FAIRNESS COMMITTEE
Pursuant to the obligations set forth in the Outstanding Loan
Facilities:
(A) The LLC will establish and maintain a Fairness Committee, at least one
of whose member shall be Independent.
(B) The Fairness Committee shall have such rights and duties and shall act
by such procedures and in such manner as the Special Advisor or
Successor Special Advisor Group shall determine from time to time,
provided that no such determination shall limit or otherwise interfere
with the rights and duties of the Fairness Committee as herein set
forth.
SECTION 3.2 AFFILIATE TRANSACTIONS AND CORPORATE OPPORTUNITIES
(A) The Fairness Committee, to the extent provided in the Outstanding Loan
Documents, shall review and approve of affiliate transactions.
The Fairness Committee, to the extent provided in the Outstanding Loan
Documents, shall review and make decisions regarding corporate opportunities.
The Fairness Committee shall have such additional rights and duties as
provided for in the Outstanding Loan Documents or requested by the Manager of
the LLC.
ARTICLE IV
FIDUCIARIES-ADMINISTRATORS, SPECIAL ADVISOR,
SUCCESSOR SPECIAL ADVISOR
AND FINANCIAL ADVISOR
SECTION 4.1 FIDUCIARIES
(A) The LLC shall be managed by the Special Advisor, Larry J. Winget, and
upon his death, Incapacity or Unavailability, by the Successor Special
Advisor Group, as further provided in Article VI (such Special Advisor
and each member of such Successor Special Advisor Group, the
Administrator(s) and the Financial Advisor named herein, each being a
"Fiduciary"). The Special Advisor and Successor Special Advisor Group
may appoint LLC officers as herein set forth.
(B) The Fiduciaries shall act promptly in fulfilling their duties under this
LLC.
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(C) No Fiduciary shall have any liability for a failure to (after using
reasonable efforts to negotiate the collection of and/or pursue other
legal and / or alternative dispute resolution methods) collect any
funds due, owing or payable to the LLC or to see to the application of
any funds after they have been distributed or paid by the LLC to the
appropriate party.
(D) The LLC hereby covenants to protect, save and keep harmless the Fiduciaries
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed upon, incurred or asserted
against them in any way relating to or arising out of this LLC or the
performance or enforcement of any of its terms or in any way relating to or
arising out of the administration of the LLC or action or inaction of the
Fiduciaries unless such actions were taken in bad faith or with wanton
disregard of the overall purposes intentions and/or clear provisions of the
LLC.
(E) Any certification executed by either (i) the Administrator(s) or (ii)
any total of two member from the Family Sub-Group and/or the Entities
Sub-Group as whether or not a Power Exercise has followed the
procedures set forth in this LLC or is otherwise authorized by this LLC
(a "Administrator(s)' Certification") may be relied upon by any third
party not having actual knowledge that the same is false or fraudulent,
and the LLC shall hold such third party harmless from any such reliance
unless such reliance was in wanton disregard of the facts.
(F) Each representation, warranty, undertaking and agreement made in the
Loan Documents on the part of any Fiduciary shall be made and intended not
as a personal representation, warranty, undertaking and agreement by or for
the purpose or with the intention of binding it personally but is made and
intended for the purpose of binding only the LLC assets held pursuant to
this LLC and shall be executed and delivered by the Administrator solely in
the exercise of the powers expressly conferred upon it as Administrator
under this LLC; and no personal liability or responsibility shall be
assumed thereunder by nor shall the Loan Documents at any time be
enforceable against the Administrator or its successor on account of the
Loan Documents or any representation, warranty, covenant, undertaking or
agreement thereunder of the Administrator, either expressed or implied, all
such personal liability, if any, being expressly waived. All liability
thereunder shall be limited solely to recourse against the assets of the
LLC assets held pursuant to this LLC.
SECTION 4.2 ADMINISTRATOR
As long as Larry J. Winget has not died and is not Incapacitated, [or,
if the same will not cause a Change of Control under any Outstanding Loan
Document, Unavailability], he alone shall be Administrator of the LLC.
Upon Larry J. Winget's death or Incapacity, [or, if the same will not cause
a Change of Control under any Outstanding Loan Document, Unavailability], the
Administrator(s) of the LLC shall be Timothy M. Bradley and Alicia J. Winget if
they shall then be (i) living and not
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Incapacitated or Unavailable and (ii) associated with the activities of this LLC
and/or the Companies; otherwise either of their successors shall be Joseph
Tignanelli and upon his death, Incapacity or Unavailability, the successor
Administrator shall be as designated by, and not removed by, the Successor
Special Advisor Group. Upon the death, resignation, Incapacity or Unavailability
of either Administrator, until replaced, the other shall succeed to the power of
both Administrators.
(C) The Administrator(s) shall not, without the prior consent of the
Special Advisor or Successor Special Advisor Group:
(1) Borrow money or incur other obligations;
(2) Dispose of the LLC's assets;
(3) Make loans to its Companies;
(4) Make investments except in cash equivalents; or
(5) Exercise any of its rights as an owner of the Companies of the
LLC.
(D) Such Administrator(s), acting in that capacity, and their successors,
shall inherently have the power:
To receive and hold the LLC principal and income, and to do all acts
necessary thereto, including, but not limited to, establishing bank accounts,
endorsing checks and other drafts, and arranging for the transfer of funds;
To promptly invest all collected funds in a money market fund which
invests solely in obligations of the United States Government (or, if consented
to by the Administrator, in Treasury obligation of specified maturity);
To keep full books of account in which all the banking transactions of the
LLC shall be recorded;
To make loan repayments and insurance payments and distribute all of the
rest of the cash distributions made to the LLC pursuant to the Loan Documents
and this Operating Agreement;
To act as the nominee or Administrator of the other Fiduciaries as herein
provided;
To take such action pursuant to a Power Exercise otherwise as specifically
provided for in this LLC, as is directed or implied by the same;
To make such Administrator(s)' Certifications as to one or more Power
Exercises as they shall be from time to time requested or required to do;
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To determine or have determined the Tax Distribution Amounts and take
all actions necessary and/or reasonable to cause the Companies who generate a
portion of the Tax Distribution Amounts to make a Tax Distribution in such a
manner so that, to the extent reasonably possible, the LLC receives its rightful
share of such amounts and upon receipt of all or any portion of the LLC's Tax
Distribution amounts, pay the same to the LLC member;
Based on a Power Exercise, to take all actions necessary and/or
reasonable to cause the Companies to make other distributions and upon receipt,
pay the same to the LLC member;
From time to time appoint (and/or remove and/or replace) one or
more individuals (who shall be one or more of the Fiduciaries) as their
individual or collective Administrator (herein, a "Administrator(s)
Representative");
To take such other actions that the LLC directly or indirectly implies
they have authority to take; and
To take such other actions that the Fiduciaries acting pursuant to the
exercise of their rights, duties, authority and obligations hereunder directly
or, by their decisions, implicitly instruct the Administrator(s) to take.
(E) Except as otherwise provided herein and subject to the powers of the
Special Advisor or Successor Special Advisor Group and/or the
Financial Advisor, as herein is provided for, the Administrator(s)
shall have the following powers and duties:
(1) Subject to any pledge made to any LLC creditor, to have custody of
the LLC's assets.
To hold in the LLC name and retain common or preferred stocks and other
equity interests; bank accounts and certificates of deposit with FDIC insured
banking institutions; insured share accounts of building and loan or savings and
loan associations; money market funds; bonds; mortgages; mortgage notes; notes;
debentures; securities (including securities of companies that are registered
with the federal securities and exchange commission under any of the acts
enforced by it and whose principal and primary activities are investments in
securities of other companies); other properties, real or personal; contracts of
annuity or insurance payable to the member of the LLC and issued by a legal
reserve life insurance company duly admitted to operate in the State; debt
issued by the U.S. Treasury; obligations, mortgages, or participation interests
in mortgages or securities issued or guaranteed by the federal home loan
mortgage corporation pursuant to the federal home loan mortgage corporation act,
title III of Public Law 91-351, 12 U.S.C. 1451 to 1459; or annuity contracts
written by any company authorized to do such business in the State; all as an
ordinarily prudent person of intelligence and integrity, who is a Administrator
of the money of others would purchase, in the exercise of reasonable care,
judgment, and diligence, under the conditions existing at the time of purchase,
having due regard for the management, reputation, and stability of the issuer
and the character of the particular securities;
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To employ investment counsel, custodians of property, brokers,
accountants, attorneys, and any other Administrators to act in their behalf;
generally to do any act or thing and execute all instruments necessary,
incidental or convenient to the proper administration of the LLC assets;
To pay the reasonable expenses of the LLC, the Administrator(s) and any
investment advisor. In this regard, the corporate Administrator and investment
advisor, if any, shall be entitled to receive compensation for their services
equal in amount to the lesser of (i) that called for in any schedule of fees
which they publish and which shall be in effect from time to time or (ii) the
most favorable fees which they charge customers similarly situated. Such
compensation may be charged to principal or to income or partly to each in the
discretion of the Administrator;
To make such elections and allocations under the tax laws permitted to
be made by the Administrator(s) as the Administrator(s) consider advisable
(whether or not the election or allocation relates to the LLC property), without
regard to, or adjustments between, principal and income or the relative
interests of the member;
To exercise pursuant to the direction of the Active Business Advisory
Group in person or by general or limited proxy all voting and other rights,
powers, and privileges and to take all steps to realize all benefits with
respect to stocks or other securities; and to enter into or oppose, alone or
with others, voting trusts, mergers, consolidations, foreclosures, liquidations,
reorganizations, or other changes in the financial structure of any subsidiary;
To execute pursuant to the direction of the Active Business Advisory
Group instruments of any kind, including instruments containing covenants and
warranties binding upon and creating a charge against the LLC property and
containing provisions excluding personal liability;
To perform all other acts necessary for the proper retention, investment
and distribution of the LLC property.
All other powers of the LLC not specifically referred to in (D), above,
or this (E), shall only be exercised by the Administrator pursuant to the
direction of the Active Business Advisory Group.
(F) Other than Larry J. Winget and Alicia J. Winget, the Administrator(s) may
be removed and replaced by the Active Business Advisory Group for any
reason; provided, that any such action shall require the vote of at least
four (4) of the Member of the Family Sub-Group (or all of them, if it has
four or fewer Member). Further, on the death, resignation, Incapacity or
Unavailability of either or both Administrator(s), the Active Business
Advisory Group may select a replacement. In either case, if they do not act
within thirty (30) days, then the Family Sub-Group shall select a
replacement who may act until the Active Business Advisory Group has
selected a replacement or terminated such Administrator.
SECTION 4.3 OFFICERS.
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From time to time the Special Advisor (or upon the death, Disability or
Unavailability of Larry J. Winget, the Successor Special Advisor Group), may
elect a Chairman, a President, one or more Vice-Presidents, a Secretary and a
Treasurer and one or more Assistant Vice-Presidents, Secretaries and Treasurers,
and such other officers and agents as it may deem necessary for the transaction
of the business of the LLC, none of whom need be the Special Advisor or a member
of the Successor Special Advisor Group (herein, the "Advisor(s)").
The same person may hold any two or more offices excepting those of
President and Vice President.
The term of office of all Officers shall be until they are replaced.
The President may execute all authorized conveyances, contracts, or
other obligations in the name of the Corporation except where the signing and
execution thereof shall be expressly delegated by the Advisor(s) to some other
Officer or agent of the LLC.
The Vice President (if any) in the order designated by the Advisor(s)
or, lacking such a designation, by the President, shall in the absence or
disability of the President perform the duties and exercise the powers of the
President and shall perform such other duties as the Advisor(s) shall prescribe.
The Secretary, at the invitation of the Advisor(s), may attend all
meetings of the Advisor(s) and all meetings of the member of the LLC and record
all votes and the minutes of all proceedings in a book to be kept for the
purpose and shall perform like duties for the standing committees when required.
He/She shall give, or cause to be given, notice of all meetings of the member of
the LLC and special meetings of the member and shall perform such other duties
as may be prescribed by the Advisor(s). He/She may execute with the President
all authorized conveyances, contracts or other obligations in the name of the
LLC except as otherwise directed by the Advisor(s). He/She shall keep in safe
custody the seal of the LLC and, when authorized by the Advisor(s), affix the
same to any instrument requiring it and, when so affixed, it shall be attested
by his/her signature or by the signature of the President, Treasurer or an
Assistant Secretary.
The Treasurer shall have custody of and keep account of all money,
funds and property of the LLC, unless otherwise determined by the Advisor(s),
and he/she shall render such accounts and present such statements to the
Advisor(s) and President as may be required of him/her. He/She shall deposit
funds of the LLC which may come into his/her hands in such bank or banks as
Advisor(s) may designate. He/She shall keep his/her bank accounts in the name of
the LLC and shall exhibit his/her books and accounts at all reasonable times to
any Advisor upon application at the office of the Corporation during business
hours. If required by the Advisor(s), he/she shall give the Corporation a bond
in such sum and with such surety or sureties as shall be satisfactory to the
Advisor(s) for the faithful performance of the duties of his/her office and for
the restoration to the LLC in case of his/her death, resignation or removal from
office of all books, papers, vouchers, money and other property of whatever kind
in his/her possession or under his/her control belonging
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to the LLC.
The Assistant Secretaries and the Assistant Treasurers (if any),
respectively, (in the order designated by Advisor(s) or lacking such
designation, by the President) in the absence of the Secretary or the Treasurer,
as the case may be, shall perform the duties and exercise the powers of such
Secretary or Treasurer and shall perform such other duties as the Advisor shall
prescribe.
ARTICLE V
DISTRIBUTIONS
SECTION 5.1 OBLIGATION TO CAUSE TAX AND OTHER DISTRIBUTIONS
(A) RESTRICTIONS ON DISTRIBUTIONS. A distribution shall not be made if, after
giving the distribution effect, one or more of the following situations would
occur:
The LLC would not be able to pay its debts as they become due in the
usual course of business.
The LLC's total assets would be less than the sum of its total
liabilities plus, unless the Operating Agreement provides otherwise, the amount
that would be needed, if the LLC was to be dissolved at the time of the
distribution, to satisfy the preferential rights of other member upon
dissolution that are superior to the rights of the member or member receiving
the distribution.
(B) EFFECT OF DISTRIBUTION. The effect of a distribution under (A) is measured
at the following times:
In the case of a distribution of the fair value of a withdrawing
member's interest, as of the earlier of the date money or other property is
transferred or debt incurred by the LLC, or the date the member ceases to be a
member.
In the case of any other distribution of indebtedness, as of the date the
indebtedness is authorized if distribution occurs within 120 days after the
date of authorization, or the date the indebtedness is distributed if it occurs
more than 120 days after the date of authorization.
In all other cases, as of the date the distribution is authorized if
the payment occurs within 120 days after the date of authorization, or the date
the payment is made if it occurs more than 120 days after the date of
authorization.
MEMBER' RIGHTS. At the time a member becomes entitled to receive a
distribution, the member has
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the status of, and is entitled to all remedies available to, a creditor of the
LLC with respect to the distribution. The LLC's indebtedness to a member
incurred by reason of a distribution made in accordance with this section is at
parity with the LLC's indebtedness to its general, unsecured creditors except as
otherwise agreed.
DISTRIBUTION OF OBLIGATION. If the LLC issues an obligation to make future
payments as payment of the fair value of a withdrawing member's interest, and
distribution of the obligation would otherwise be prohibited under Section 5.1
(a) at the time it is made, the company may issue the obligation and the
following shall apply:
(i) such obligations will be tested at the time of payment.
The portion of the obligation that could have been distributed without
violating Section 5.1(a) will not be considered a liability or debt for purposes
of determining whether distributions other than payments on the obligation may
be made under this section.
SECTION 5.2 DISTRIBUTIONS OF INCOME AND PRINCIPAL DURING LARRY J. WINGET'S
LIFETIME
During the lifetime of Larry J. Winget and subject to any distribution
limitations placed on the LLC by the Outstanding Loan Facilities:
(A) In his capacity as Administrator and Special Advisor, and subject to
the Outstanding Loan Documents, he shall have the right to:
Determine the Tax Distribution Amounts and take all actions necessary
and/or reasonable to cause the Companies which generate a portion of the Tax
Distribution Amounts to make a Tax Distribution to the LLC, and upon receipt of
all or any portion of such Tax Distributions, distribute the same to the Member;
and
Take all actions necessary and/or reasonable to cause the Companies
to make a distribution to the LLC in amounts which he determines is reasonable,
but in any case not in excess of the amount requested by the member, and upon
receipt of such amounts, pay the same to the member.
If Larry J. Winget is Incapacitated or Unavailable:
The Administrator shall, subject to the Outstanding Loan Documents,
determine the Tax Distribution Amounts and take all actions necessary and/or
reasonable to cause the Companies which generate a portion of the Tax
Distribution Amounts to make a Tax Distribution to the LLC, and upon receipt of
all or any portion of such Tax Distributions, pay the same to the member; and
The Active Business Advisory Group shall take all actions necessary and/or
reasonable to cause the Companies to make a distribution to the owner of the LLC
in amounts which they
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determine is reasonable, but in any case not in excess of the amount requested
by the Member, and upon receipt of such amounts, pay the same to the Member.
SECTION 5.3 DISTRIBUTIONS OF INCOME AND PRINCIPAL AFTER LARRY J. WINGET'S
LIFETIME AND DURING ALICIA J. WINGET'S LIFETIME
(A) On the death of Larry J. Winget, and during the lifetime of Alicia J.
Winget, Alicia Winget, in her capacity as Administrator and a member of
the Successor Special Advisor Group, and subject to the Outstanding
Loan Documents, shall alone have the right to:
Determine the Tax Distribution Amounts and take all actions necessary
and/or reasonable to cause the Companies which generate a portion of the Tax
Distribution Amounts to make a Tax Distribution to the LLC, and upon receipt of
all or any portion of such Tax Distributions, pay the same to the Member; and
Take all actions necessary and/or reasonable to cause the Companies
to make a distribution to the LLC in amounts which she determines is reasonable,
but in any case not in excess of the amount requested by the Member, and upon
receipt of such amounts, pay the same to the Member.
SECTION 5.4 DISTRIBUTIONS OF INCOME AND PRINCIPAL AFTER LARRY J. WINGET'S
LIFETIME AND ALICIA J. WINGET'S LIFETIME
Upon the death of Larry J. Winget and Alicia J. Winget:
The Administrator, subject to the Outstanding Loan Documents, shall
alone have the right to determine the Tax Distribution Amounts and take all
actions necessary and/or reasonable to cause the Companies which generate a
portion of the Tax Distribution Amounts to make a Tax Distribution to the LLC,
and upon receipt of all or any portion of such Tax Distributions, pay the same
to the Member; and
The Active Business Advisory Group shall take all actions necessary and/or
reasonable to cause the Companies to make a distribution to the LLC in amounts
which they determine is reasonable, but in any case not in excess of the amount
requested by the Member, and upon receipt of such amounts, pay the same to the
Member.
ARTICLE VI
OPERATIONS, POWERS AND DUTIES OF THE SPECIAL ADVISOR
AND SUCCESSOR SPECIAL ADVISOR GROUP
SECTION 6.1 SPECIAL ADVISOR
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The Special Advisor and the Successor Special Advisor Group shall
consist of the Financial Advisor (who shall only vote as specifically set forth
herein) and the Active Business Advisory Group.
SECTION 6.2 DURING THE LIFE, CAPACITY AND AVAILABILITY OF LARRY J. WINGET
During the life of Larry J. Winget, unless he shall resign or be
Incapacitated [or, if the same will not cause a Change of Control under any
Outstanding Loan Document, Unavailable], Larry J. Winget shall be the Special
Advisor. Acting in such capacity, he shall have the following powers and duties:
(A) The powers and duties of the Financial Advisor; and
(B) The powers and duties of the Active Business Advisory Group.
SECTION 6.3 SUCCESSOR SPECIAL ADVISOR GROUP
Upon Larry J. Winget's death, resignation or Incapacity, [or, if the
same will not cause a Change of Control under any Outstanding Loan Document,
Unavailability]:
(A) The Financial Advisor shall be as provided for in Section 6.4 below.
(B) The Active Business Advisory Group shall be as provided for in Section 6.5
below.
SECTION 6.4 UPON THE DEATH, INCAPACITY OF OR UNAVAILABILITY OF LARRY J. WINGET
- - FINANCIAL ADVISOR
Upon Larry J. Winget's death, resignation or Incapacity, [or, if the
same will not cause a Change of Control under any Outstanding Loan Document,
Unavailability]:
(A) The initial Financial Advisor of the LLC shall be Alicia J. Winget.
Upon her death, Incapacity or Unavailability, Timothy M. Bradley shall
be the Financial Advisor if he has not resigned and is then (i) living
and not Incapacitated or Unavailable, (ii) associated with the
activities of this LLC and/or Companies, and (iii) not removed by the
Active Business Advisory Group as provided for in (C) below.
(B) The only rights and obligations of the Financial Advisor acting in that
capacity shall be to:
Participate in any Power Exercise as provided for in this Article VI.
Coordinate the activities of the Fiduciaries acting in their other
capacities;
Be (unless otherwise required or permitted to vote as provided hereunder)
a non-voting
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observer of the meetings and proceedings of the Member;
Have custody of the books and records of the LLC; and its subdivisions;
Act as an arbitrator as provided for in this Article VI between the
Entities Sub-Group and the Family Sub-Group as herein provided;
Vote, as provided for in this Article VI, when all of the Member of a
Sub-Group are Unable To Vote.
Have the power to terminate the LLC and transfer the beneficial interests
of LLC to its owner;
To interpret the LLC in accordance with the LLC's clear purpose and
intention, provided that such interpretation does not violate an Outstanding
Loan Document;
Maintain LLC records and file LLC tax returns;
Take such other actions that the LLC directly or indirectly implies
they have authority to take, and
Take such other actions that the Fiduciaries acting pursuant to the
exercise of their rights, duties, authority and obligations hereunder directly
or, by their decisions, implicitly instruct the Financial Advisor to take.
(C) After the death, resignation, Incapacity or Unavailability or Alicia J.
Winget, the Financial Advisor may be removed and replaced by the Active
Business Advisory Group for any reason; provided, that any such action
shall require the vote of at least four (4) of the Member of the Family
Sub-Group (or all, if it has four or fewer Member). Further, on the death,
resignation, Incapacity or Unavailability of the Financial Advisor, the
Active Business Advisory Group shall select a replacement. In either case,
if they do not advise the Administrator of such a replacement within thirty
(30) days, then the Family Sub-Group shall select a replacement who shall
act until the Active Business Advisory Group has selected a replacement.
(D) No individual shall act as Financial Advisor unless they have first
resigned from and severed any relationship or affiliation with any
Subsidiary including as an employee, Administrator, or independent
contractor, unless such relationship or affiliation is approved by the
Active Business Advisory Group.
(E) In addition to its reasonable expenses, the Financial Advisor shall receive
as compensation:
(1) For the period that Timothy M. Bradley is Financial Advisor:
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(a) Prior to the death of Larry J. Winget, a fee based on his hourly
billing rate for services performed;
(b) After the death of Larry J. Winget, either (i) a fee based on his
hourly billing rate for services if the Financial Advisor's
services are required for an average of less than thirty (30)
hours per week (to be paid biweekly) and the Financial Advisor
shall be permitted to continue any relationship or affiliation
with the Business Entities or (ii) a salary equal to the
Financial Advisor's average earned income during the three (3)
years of his highest earned income, plus inflation. If the salary
method becomes effective at any time, then option (i) will no
longer be available and upon termination of the Financial Advisor
for any reason (other than his resignation or breach of his
duties under this Agreement), the Financial Advisor shall receive
one (1) year's salary as severance; or
(2) Without regard to who is the Financial Advisor, such amount as
is agreed upon by the Financial Advisor and the Active
Business Advisory Group as being reasonable.
(3) Nothing herein to the contrary withstanding, the compensation
of the Financial Advisor under this LLC shall be adjusted to
take into account any compensation received for the same time
period from any Affiliate of the LLC or The Wingets.
SECTION 6.5 UPON THE DEATH, INCAPACITY OF OR UNAVAILABILITY OF LARRY J. WINGET
- - ACTIVE BUSINESS ADVISORY GROUP.
Upon Larry J. Winget's death or Incapacity, [or, if the same will not
cause a Change of Control under any Outstanding Loan Document, Unavailability]:
(A) Alicia J. Winget. If Alicia J. Winget has not resigned and is not
deceased, Incapacitated or Unavailable, then (i) she shall be a member
of the Active Business Advisory Group and (ii) nothing herein to the
contrary withstanding, she shall have the right alone to direct the LLC
as to the retention, transfer, lease, transfer hypothecation, merger,
consolidation, liquidation and/or reorganization of the LLC's assets
and to invest the proceeds in income producing property; otherwise, the
Active Business Advisory Group shall exercise the powers herein
reserved to it.
(B) Two Groups. The "Active Business Advisory Group" shall consist of and
conduct its business by the vote of its two sub-groups (the Entities
Sub-Group and the Family Sub-Group) each of which Sub-Groups shall have
two votes, which shall be voted as set forth below.
(C) Entities Sub-Group.
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(1) One sub-group (the "Entities Sub-Group") shall be composed of
two (2) individuals, who at all times while serving as a
member of the Entities Sub-Group, are employed by and spend
the vast majority of their time engaged in the manufacturing,
tooling, machinery re-manufacturing, sales or financing end of
one or more businesses which account for at least twenty
percent (20%) of the total gross sales of the LLC assets (the
"Employment Requirement"); provided, that the Employment
Requirement shall not apply to Larry Joseph Winget, Jr. (but
shall apply to any other issue of The Wingets).
(2) Each of the individuals shall have one vote in Active Business
Advisory Group matters.
(3) Initially, Michael Torakis and Larry Joseph Winget, Jr. shall
compose the Entities Sub-Group so long as they are able to
vote.
(4) If
-any member of the Entities Sub-Group (an "Entities Member") becomes
Unable To Vote (as herein defined); or
-it is determined by a majority vote of each member of the
Family Sub-Group and the Entities Member who is not the
subject of the vote (each having one vote and a tie vote being
considered a nullity) that any member of the Entities
Sub-Group, other than Larry Joseph Winget, Jr., should not
continue to serve;
then each member of the Family Sub-Group and the remaining Entities Member, if
any, shall by majority vote select a successor Entities Member who meets the
Employment Requirement; provided, that if there is one or more Family Member who
meet the Employment Requirement, then any successor for Larry Joseph Winget, Jr.
shall be chosen from such eligible Family Member. In the interim, no vote on
other matters shall be taken unless absolutely necessary, in which case the
remaining Entities Member shall have the right to exercise both of the Entities
Sub-Group's votes.
(D) Family Sub-Group.
(1) One sub-group (the "Family Sub-Group") shall be drawn from the
descendants of The Wingets or a relative of either of The
Wingets (by blood, not by marriage and not more than three
times removed) who have at any time worked full time for one
or more of the Businesses for not less than a cumulative total
of five (5) years in mid or upper level management positions;
provided, that this requirement shall not apply to any of the
Children of The Wingets.
(2) Initially, Larry Joseph Winget, Jr. (even though he is also an
Entities Sub-Group Member), Adelicia Jo Jean Tignanelli, Norman
Matthew Winget, Gwendolyn May
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Cameron and Annalisa Winget (individually, a "Child" and
together, the "Children") shall be member of the Family
Sub-Group.
(3) Upon any of the Children dying, becoming Unavailable or
Incapacitated or being unwilling to serve ("Unable To Vote"),
the remaining Children (referred to herein as those "Able To
Vote") shall serve as the Family Sub-Group.
(4) (a) If any member of the Family Sub-Group resigns, a successor
shall not be selected, unless, after the resignation, there will be no
Child serving as a Member of the Family Sub-Group who is Able To Vote.
(b) The then surviving Child or Children who remain as Family
Sub-Group Member(s) may in advance, by a majority vote choose
two or more eligible descendants to become Family Sub-Group
Member to succeed them when there are no longer any Children
Able To Vote, and may designate their order of succession.
(c) If there are no Children who are Able To Vote and no
replacements have been designated under (b), then the issue of
the Children shall select two or more replacement Member
meeting the above qualifications. In the interim, no vote
shall be taken on any other matter unless absolutely
necessary, in which case the Financial Advisor shall exercise
the two votes of the Family Sub-Group.
(E) All votes which are taken of the Active Business Advisory Group shall
be presented in such a manner that the voting Member are given the
option of voting either "yes" or "no" on the matter. For purposes of
determining the number of Family Sub-Group Member considered to be
voting, any Member who fail to cast a vote, abstain from voting or make
a non-responsive declaration shall not be counted. If there is doubt as
to how a vote was cast by a Member, the Financial Advisor shall make a
determination as to how the vote was cast.
(1) If five Member of the Family Sub-Group vote, the following
shall apply as to any vote of the Active Business Advisory
Group:
(a) If a Member of the Family Sub-Group who also serves
as an Entities Sub-Group Member (the "Family Entities
Member", who shall initially be Larry Joseph Winget,
Jr.) and at least two (2) other Family Sub-Group
Member vote the same way on a matter, their decision
shall control;
(b) If the Entities Sub-Group Member who is not the
Family Entities Member (the "Non-Family Entities
Member", who shall initially be Michael G. Torakis)
and three (3) Family Sub-Group Member vote the same
way on a matter, while the Family Entities Member and
one (1) other Family Sub-Group Member vote the other
way, this shall be considered a stalemate and the
Financial Advisor shall decide the matter pursuant to
(E) below;
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(c) If the Non-Family Entities Member and at least four
(4) Family Sub-Group Member vote the same way on a
matter, their decision shall control over the Family
Entities Member who votes otherwise;
In all other cases, including if there is no Entities Family Member,
(i) if three or more votes of the Member of the Family Sub-Group are cast either
"yes" or "no", their decision shall control how both of the two (2) votes of the
Family Sub-Group are cast and (ii) any vote of the Active Business Advisory
Group shall be decided based on how a majority of the four (4) votes of the
Active Business Advisory Group are cast and (iii) any stalemate of the Family
Sub-Group or Active Business Advisory Group shall be broken by the Financial
Advisor pursuant to (E) below.
(2) If four Member of the Family Sub-Group vote, the following
shall apply as to any vote of the Active Business Advisory
Group:
(a) If the Family Entities Member and at least two (2)
other Family Sub-Group Member vote the same way on a
matter, their decision shall control;
(b) If the Non-Family Entities Member and two (2) Family
Sub-Group Member vote the same way on a matter, while
the Family Entities Member and one (1) Family
Sub-Group Member vote the other way, this shall be
considered a stalemate and the Financial Advisor
shall decide the matter pursuant to (E) below;
(c) If the Non-Family Entities Member and at least three
(3) Family Sub-Group Member vote the same way on a
matter, their decision shall control over a Family
Entities Member who votes otherwis.
In all other cases, including if there is no Entities Family Member,
(i) if three or more votes of the Member of the Family Sub-Group are cast either
"yes" or "no", their decision shall control how both of the two (2) votes of the
Family Sub-Group are cast and (ii) any vote of the Active Business Advisory
Group shall be decided based on how a majority of the four (4) votes of the
Active Business Advisory Group are cast and (iii) any stalemate of the Family
Sub-Group or Active Business Advisory Group shall be broken by the Financial
Advisor pursuant to (E) below.
(3) If three Member of the Family Sub-Group vote, the following
shall apply as to any vote of the Active Business Advisory
Group:
(a) If the Family Entities Member and at least one (1)
other Family Sub-Group Member votes the same way on a
matter, their decision shall control;
(b) If the Non-Family Entities Member and at least two
(2) Family Sub-Group Member vote the same way on a
matter, their decision shall control over a Family
Entities Member who votes otherwise;
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In all other cases, including if there is no Entities Family Member,
(i) if two or more votes of the Member of the Family Sub-Group are cast either
"yes" or "no", their decision shall control how both of the two (2) votes of the
Family Sub-Group are cast and (ii) any vote of the Active Business Advisory
Group shall be decided based on how a majority of the four (4) votes of the
Active Business Advisory Group are cast and (iii) any stalemate of the Family
Sub-Group or Active Business Advisory Group shall be broken by the Financial
Advisor pursuant to (E) below.
(4) If two Member of the Family Sub-Group vote, (i) each of them
shall have one (1) of the Family Sub-Group's two (2) votes and
(ii) any vote of the Active Business Advisory Group shall be
decided based on how a majority of the four (4) votes of the
Active Business Advisory Group are cast and (iii) any
stalemate of the Active Business Advisory Group shall be
broken pursuant to (E) below.
(5) If one Member of the Family Sub-Group votes, (i) he or she
shall have both of the Family Sub-Group's two (2) votes and
(ii) any vote of the Active Business Advisory Group shall be
decided based on how a majority of the four (4) votes of the
Active Business Advisory Group are cast and (iii) any
stalemate of the Active Business Advisory Group shall be
broken pursuant to (E) below.
(6) If the Family Sub-Group is no longer comprised of any
Children, the Family Sub-Group shall consist of at least two,
but not more than five, Member.
(F) If, under (D) above, the Active Business Advisory Group or Family
Sub-Group is unable to agree on any act to be taken or refrained from,
then the Financial Advisor shall act in an arbitrator capacity by
agreeing with one of the positions taken, but not by making an
independent decision.
(G) Any appointment of a successor Member hereunder shall be in writing, may be
made to become effective at any time or upon any event, may be for a
specified period or indefinitely, and may be for limited or general
purposes and responsibilities, all as specified in the instrument of
appointment. The appointer (or any successor to the appointer) may revoke
any such appointment before it is accepted by the appointee, and may
specify in the instrument of appointment whether it can be revoked by the
appointer. In the event that, as to any individual, two or more instruments
of appointment or revocation exist and are inconsistent, the latest by date
shall control.
(H) The Member need not only consider the best interests of the LLC member,
but may also take into account the best interests of the Business
Entities and may, if the same are reasonable, vote for or take
advantage of, a benefit that accrues to their benefit so long as the
benefit also generally benefits a group of persons of which they are
otherwise a member .
SECTION 6.6 DELEGATION OF POWERS OF MEMBER OF ENTITIES SUB-GROUP OR THE FAMILY
SUB-GROUP OF THE ACTIVE BUSINESS ADVISORY GROUP
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With respect to any decisions within either the Entities Sub-Group or
the Family Sub-Group of the Active Business Advisory Group as to which two or
more Member (of a sub-group) may vote, a Member, by written notice, may
temporarily delegate, with the consent of the delegee, any or all of that
Member's rights, powers, duties, and discretion as a Member to any other Member
having the right to vote on that issue in that sub-group, to an individual who
is eligible to become a member of that sub-group, or to the Financial Advisor.
SECTION 6.7 MEETINGS OF MEMBER OF FAMILY SUB-GROUP
(A) If requested by two or more of the Member of the Family Sub-Group, a
meeting of the Family Sub-Group or the entire Active Business Advisory
Group shall be held. If requested by one or more of the Member of the
Entities Sub-Group, a meeting of the Entities Sub-Group or the entire
Active Business Advisory Group shall be held. The Financial Advisor shall
also have the power to call a meeting if reasonably necessary.
(B) Meetings shall be either in person or by conference call. A meeting shall
generally require at least fourteen (14) days notice; however, a conference
call may be scheduled upon less than fourteen (14) days notice but at least
three (3) days notice, at the request of at least three (3) Family
Sub-Group Member or two (2) Entities Sub-Group Member or the Financial
Advisor (and all of the Member eligible to vote may agree in writing to
waive any such requirements). In any case, no vote of the Active Business
Advisory Group or any Sub- Group shall be taken unless it is preceded by a
meeting of which all Member of the Group and the Financial Advisor are
given notice, either in person or by conference call, during which there is
a reasonable opportunity of each Member to discuss the relevant facts and
issues pertaining to the vote, unless all of the Member eligible to vote
agree to waive such requirement in writing.
(C) The Financial Advisor shall immediately inform any Fiduciary or
Administrator under this LLC whose duties may be affected by the matter
voted on, of the results of the vote.
ARTICLE VII
GENERAL FIDUCIARY PROVISIONS
SECTION 7.1 RESIGNATIONS AND REMOVAL
A Fiduciary of this LLC may resign at any time by delivering thirty
(30) days written notice to that effect to the Lenders and the Administrator.
Except as to Larry J. Winget and Alicia J. Winget, the Active Business
Advisory Group may
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at any time remove the Administrator(s) and/or the Financial Advisor (subject
to Section 6.4(C)) without cause by an instrument in writing delivered to each
Administrator, the Lenders and the Financial Advisor.
A successor Fiduciary shall be appointed by the Active Business
Advisory Group (subject to the other provisions herein).
If no Successor Fiduciary has been appointed by the tenth day prior to
the effective date of the Fiduciary's resignation, the Financial Advisor shall
have the right to appoint a successor Fiduciary (subject to the other provisions
herein).
SECTION 7.2 VALIDITY OF ADMINISTRATOR'S ACTS
It shall not be necessary for anyone dealing with the Administrator or
the Financial Advisor to inquire into the validity of anything the Administrator
purports to do or to investigate the application of any money paid or any
property transferred to or upon the orders of the Administrator.
SECTION 7.3 BONDING
During the life, Capacity and Availability of Larry J. Winget and
Alicia J. Winget, no bond shall be required of them.
After the death, Incapacity or Unavailability of Larry J. Winget, a
fiduciary bond in the amount of not less than one million dollars per occurrence
(five million maximum) shall, if reasonably available, shall be required of the
Administrator(s) and the Financial Advisor other than Alicia J. Winget (to be
paid for by the LLC, unless such Fiduciary is a corporate fiduciary), unless the
same is waived by an affirmative vote of the Active Business Advisory Group.
SECTION 7.4 ACCOUNTINGS
The Administrator shall not be required to render any accountings to
any court, but it shall render an account at least annually to the Active
Business Advisory Group, the Financial Advisor and the Member(s). Unless one of
them shall object in writing within ninety (90) days, all matters and
transactions stated therein shall be final and binding upon all persons (whether
in being or not) who are then or may thereafter become interested in or entitled
to share in, either the income or principal of the LLC.
SECTION 7.5 FIDUCIARY'S LIABILITY
(A) MANAGER. The monetary liability of a Manager to the LLC or its member for
breach of:
The duty to discharge his or her duties in good faith shall only be deemed
to be violated if
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the manager has clearly not acted in good faith;
(2) The duty to act in a manner he or she reasonably believes to be in the best
interests of the LLC is not eliminated;
Provided, in any case, the duty as to the following is not eliminated:
(1) The receipt of a financial benefit to which the manager is not entitled.
(2) A knowing violation of law.
Indemnification. The LLC shall indemnify and hold harmless a manager
from and against any and all losses, expenses, claims, and demands sustained by
reason of any acts or omissions or alleged acts or omissions as a manager,
including judgments, settlements, penalties, fines, or expenses incurred in a
proceeding to which the person is a party or threatened to be made a party
because he or she is or was a manager, to the extent that he or she is not
liable for such acts as provided above.
INSURANCE. The LLC may purchase and maintain insurance on behalf of a manager
against any liability or expense asserted against or incurred by him or her in
any such capacity or arising out of his or her status as a manager, whether or
not the company could indemnify him or her against liability.
ARBITRATION. Any dispute which may arise regarding any Fiduciary's liability for
negligence, failure to perform its duties or otherwise, shall be resolved by
Arbitration according to the rules of the American Arbitration Association. If
the dispute involves more than $200,000, then three arbitrators shall be used
and their unanimous decision shall be final and unappealable unless it is
against the great weight of evidence. If the dispute involves $200,000 or less,
then one arbitrator shall be used and their decision shall be final and
unappealable unless it is against the great weight of evidence. If the dispute
involves more than $200,000 and the arbitrators are not unanimous, then their
decision may be appealed to a court of competent jurisdiction.
SECTION 7.6 MANAGER TRANSACTIONS-DISCLOSURE BY MANAGER.
The manager shall disclose:
A transaction with the LLC or a transaction connected with the conduct
or winding up of the LLC in which a manager of the LLC has a direct or indirect
interest or a manager's personal use of property of the LLC may be authorized or
ratified only by a vote of the member of the LLC.
All material facts regarding the transaction and the manager's interest
in the transaction or all material facts about the manager's personal use of the
LLC's property before the member vote on that transaction or use.
SECTION 7.7 NOTICES. Whenever, under the provisions of Michigan state statutes
or of the Articles
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of Organization or of this Operating Agreement, notice is required to be given
to any Advisor or Officer or member, it shall not be construed to mean personal
notice unless specifically allowed, but such notice may be given in writing, by
mail, addressed to such person, at his/her address as it appears on the records
of the LLC, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to Directors may also be given by telegram.
Whenever any notice is required to be given under the provisions of the
Michigan state statutes or of the Articles of Organization or of this Operating
Agreement, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
to be sufficient notice.
ARTICLE VIII
ADDITIONAL INTERPRETATIONS AND DEFINITIONS
PART A GENERAL DEFINITIONS
SECTION 8.1 SINGULAR/PLURAL
Singular references to "Administrator", "Manager", or other singular
expressions used herein shall include plural, masculine expressions shall
include feminine and neuter, and vice versa.
SECTION 8.2 LOAN DOCUMENTS
Nothing herein to the contrary withstanding, this instrument shall not
be interpreted in a manner to violate the Outstanding Loan Documents.
SECTION 8.3 INTERPRETATION/TAX BENEFITS
This instrument shall be interpreted reasonably and fairly; provided
that when specific tax benefits are available, then this instrument shall always
be interpreted (unless the context clearly requires otherwise) in such a manner
as to make such tax benefits available. In any case, the Administrator or other
persons or entities making the decision in question may rely upon (and shall be
held harmless by) a reasoned and reasonable interpretation by the Financial
Advisor in interpreting this instrument, whether or not such interpretation
would be the most favored given a strict interpretation of the wording of the
instrument.
SECTION 8.4 CALCULATION
Whenever a definition requires a calculation that the relevant
Administrator or other persons or entities making the decision in question
cannot reasonable make or requires action with which they cannot reasonably
comply, than they shall approximate the calculation or decision as best
possible. In any case, such Administrator or other persons or entities making
the decision in
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question may rely upon (and shall be held harmless by) the concurrence of such
approximate calculation or decision by the Financial Advisor.
ARTICLE IX
AMENDMENT
SECTION 9.1 IN GENERAL
(A) ARTICLES OF ORGANIZATION. This Agreement may be amended by that vote
necessary to change the Articles of Organization of the LLC.
Signed:
For the LLC:
/s/ Larry J. Winget
- ---------------------------------------
Larry Winget, Manager - Special Advisor
For the Certificate Holder, Venture Holdings Trust:
/s/ Larry J. Winget
- ---------------------------------------
Larry J. Winget, Trustee - Special Advisor
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EXHIBIT 3.20
OPERATING AGREEMENT
OF
EXPERIENCE MANAGEMENT LLC
ARTICLE A
POWERS
Sec. A.1 Subject to the Company's Articles of Organization, the Company
shall have all powers necessary or convenient to effect any purpose for which
the Company is formed, including all powers granted to corporations in section
261 of the business corporation act, Act No. 284 of the Public Acts of 1972,
being section 450.1261 of the Michigan Compiled Laws.
ARTICLE B
MANAGEMENT
Sec. B.1 The general management of the Company shall be by all of the
members unless and until officers and/or directors are appointed by the members.
Individual members may also be selected to implement the general policies and
decisions of the members.
Sec. B.2 (1) Selection, if any, of any officers, directors or
individual members to implement the general policies and decisions of the
members shall be by majority vote of the members voting in proportion to their
shares of membership interest in the Company.
(2) The members may remove 1 or more officers, directors or members who
have been selected, with or without cause. Removal shall be by majority vote of
the shares of membership interest voting.
Sec. B.3 (1) An officer, director or member shall discharge his or her
decision making and implementation duties in good faith, with the care an
ordinarily prudent person in a like position would exercise under similar
circumstances, and in a manner he or she reasonably believes to be in the best
interests of the Company.
(2) In discharging his or her duties, an officer, director or member
may rely on information, opinions, reports or statements, including, but not
limited to, financial statements or other financial data, if prepared or
presented by any of the following:
(a) One or more members or employees of the Company whom the officer,
director or member reasonably believes to be reliable and
<PAGE> 2
competent in the matter presented.
(b) Legal counsel, public accountants, engineers, or other persons as
to matters the officer, director or member reasonably believes are within the
person's professional or expert competence.
(3) An officer, director or member is not entitled to rely on the
information described in subsection (2) if he or she has knowledge concerning
the matter in question that makes reliance otherwise permitted by subsection (2)
unwarranted.
(4) An officer, director or member is not liable for any action taken
or any failure to take any action if his or her duties are performed in
compliance with this section.
(5) An officer, director or member shall account to the Company and
hold as trustee for it any profit or benefit derived without the informed
consent of the members by the officer, director or member from any transaction
connected with the conduct or winding up of the Company or from any personal use
by him or her of its property.
(6) An action against an officer, director or member for failure to
perform the duties imposed by the Act shall be commenced within 3 years after
the cause of action has accrued, or within 2 years after the time when the cause
of action is discovered or should reasonably have been discovered by the
complainant, whichever occurs first.
Sec. B.4 (1) The Company shall indemnify and hold harmless an officer,
director or member selected to implement the general policies and decisions of
the members from and against any and all losses, expenses, claims, and demands
sustained by reason of any acts or omissions or alleged acts or omissions in
such capacity, including judgments, settlements, penalties, fines, or expenses
incurred in a proceeding to which the person is a party or threatened to be made
a party because he or she is or was an officer, director or member making or
implementing policies and decisions, except that the Company may not indemnify
any person for conduct described in section 407(a), (b), or (c) of the Michigan
Limited Liability Company Act (the "Act").
(2) The members shall have the right to purchase insurance on behalf of
an officer, director or member against any liability or expense asserted against
or incurred in any such capacity or arising out of his or her status as an
officer, director or member making or implementing decisions, whether or not the
Company could otherwise indemnify against liability.
<PAGE> 3
ARTICLE C
CAPITAL ACCOUNTS/MEMBERSHIP INTERESTS
Sec. C.1 (1) Each member has contributed to the initial capital of the
Company the following property with the following agreed upon values (which
shall be the initial capital account of each of the members):
Member Property Value
Venture Holdings Trust Cash $990.
Venture Service Company Cash $ 10.
(2) The initial shares of membership interest in the Company of each
member (membership interests being based on the capital accounts), shall be as
follows:
Member Interest Shares
Venture Holdings Trust 99% 99
Venture Service Company 1% 1
(3) (a) All items of income, distribution, loss, credit and deduction
shall be allocated according to the then capital accounts of the members.
(b) Capital accounts shall be maintained in accordance with Internal
Revenue Code Regulations ("IRC Reg.") '1.704-1(b)(2)(iv) and liquidating
distributions shall be made in accordance with positive capital account
balances.
(c) A member to whom an allocation is made is not obligated
unconditionally to restore a deficit balance in such member's capital account at
the time of liquidation of such member's interest, but rather, the alternate
test for economic effect under IRC Reg. '1.704-1(b)(2)(ii)(d) shall apply so
that a member who unexpectedly receives an adjustment, allocation or
distribution described in (4), (5) or (6) thereof, shall be allocated items of
income and gain (consisting of a pro rata portion of each item of partnership
income, including gross income, and gain for such year) in an amount and manner
sufficient to eliminate such deficit balance as quickly as possible.
(d) If there is a net decrease in Company minimum gain for a
<PAGE> 4
taxable year of the Company, each member must be allocated items of Company
income and gain for that year equal to that member's share of the net decrease
in Company minimum gain pursuant to IRC Reg.
'1.704-2(f).
Sec. C.2 (1) A person may become a member of the Company by
making a contribution accepted by the Company.
(2) A person who is a member of the Company is not liable for the acts,
debts, or obligations of the Company.
Sec. C.3 A membership interest in the Company shall not be
assignable or transferable.
ARTICLE D
RECORDS
Sec. D.1 The Company shall keep at its registered office all
of the following:
(1) A current list of the full name and last known address of each
member.
(2) A copy of the Articles or restated Articles of Organization,
together with any amendments to the Articles.
(3) Copies of the Company's federal, state, and local tax returns and
reports, if any, for the 3 most recent years.
(4) Copies of any financial statements of the Company for the 3 most
recent years.
(5) Copies of this Operating Agreement.
(6) Copies of records that would enable a member to determine the
members' relative shares of the Company's distributions and their relative
voting rights.
Sec. D.2 (1) Upon written request of a member, the Company shall mail
to the member a copy of its most recent annual financial statement and its most
recent federal, state, and local income tax returns and reports. Upon reasonable
request, a member may obtain true and full information regarding the current
state of business and financial condition of the Company.
(2) Upon reasonable written request and during ordinary business hours,
a member or his or her designated representative may inspect and copy, at the
member's expense, any of the records
<PAGE> 5
required to be maintained under this Article.
(3) Upon reasonable written request, a member may obtain such other
information regarding the affairs of the Company or inspect, personally or
through a representative and during ordinary business hours, such other books
and records of the Company, as is just and reasonable.
(4) A member may have a formal accounting of the Company's affairs
whenever circumstances render it just and reasonable.
ARTICLE E
CONTRIBUTIONS
Sec. E.1 (1) Subject to the Company's Articles of Organization, the
contribution of a member to the Company may consist of any tangible or
intangible property or benefit to the Company, including cash, property,
services performed, promissory notes, contracts for services to be performed, or
other binding obligation to contribute cash or property or to perform services.
(2) A contribution of an obligation to contribute cash or property or
services to be performed may be in exchange for a present membership interest or
for a future membership interest, including a future profits interest.
ARTICLE F
DISTRIBUTIONS
Sec. F.1 Subject to the Company's Articles of Organization,
distributions of cash or other assets of the Company shall be allocated among
the members and among classes of members in accordance with their capital
accounts maintained pursuant to Article C hereof.
Sec. F.2 A member may receive distributions from the Company before the
withdrawal of the member from the Company and before the dissolution and winding
up of the Company to the extent and at the times or upon the direction of the
members, provided that:
(1) A distribution shall not be made if, after giving it effect, the
Company would not be able to pay its debts as they become due in the usual
course of business or the Company's total assets would be less than the sum of
its total liabilities plus the amount that would be needed, if the Company were
to be dissolved at the time of the distribution, to satisfy the preferential
rights of other members upon dissolution that are superior to the rights of
<PAGE> 6
the member or members receiving the distribution.
(2) The Company may base a determination that a distribution is not
prohibited under subsection (1) either on financial statements prepared on the
basis of accounting practices and principles that are reasonable under the
circumstances or on a fair valuation or other method that is reasonable under
the circumstances.
(3) The effect of a distribution under subsection (1) is measured at
the following times:
(a) In the case of a distribution of indebtedness,
as of the date the indebtedness is authorized if distribution occurs within 120
days after the date of authorization or the date the indebtedness is distributed
if it occurs more than 120 days after the date of authorization.
(b) In all other cases, as of the date the
distribution is authorized if the payment occurs within 120 days after the date
of authorization or the date the payment is made if it occurs more than 120 days
after the date of authorization.
(4) At the time a member becomes entitled to receive a distribution,
the member shall have the status of, and is entitled to all remedies available
to, a creditor of the Company with respect to the distribution. The Company's
indebtedness to a member incurred by reason of a distribution made in accordance
with this section shall be at parity with the Company's indebtedness to its
general, unsecured creditors except as otherwise agreed.
(5) The enforceability of a guaranty or other undertaking by a third
party relating to a distribution shall not be affected by the prohibition of the
distribution under subsection (1).
(6) If any claim is made to recover a distribution made contrary to
subsection (1) or if a violation of subsection (1) is raised as a defense to a
claim based upon a distribution, this section shall not prevent the person
receiving the distribution from asserting a right of rescission or other legal
or equitable rights.
Sec. F.3 A withdrawing member, within 180 days after withdrawal, shall
have the right to demand in writing a distribution of the fair value of his or
her interest. The remaining members shall have 90 days after such demand to
determine whether such distribution is to be in-kind (including an undivided
fractional share in one or more assets of the Company), in cash, or partly
in-kind and partly cash and an additional 180 days to arrange any necessary
financing and make such distribution,
<PAGE> 7
provided, in any case:
(1) A distribution shall not be made to the extent that, after giving
it effect, the Company would not be able to pay its debts as they become due in
the usual course of business or the Company's total assets would be less than
the sum of its total liabilities plus the amount that would be needed, if the
Company were to be dissolved at the time of the distribution, to satisfy the
preferential rights of other members upon dissolution that are superior to the
rights of the member or members receiving the distribution.
(2) The Company may base a determination that a distribution is not
prohibited under subsection (1) either on financial statements prepared on the
basis of accounting practices and principles that are reasonable under the
circumstances or on a fair valuation or other method that is reasonable under
the circumstances.
(3) The effect of a distribution under subsection (1) is measured,
except as provided in subsection (5), in the case of a distribution of a the
fair value of a withdrawing member's interest, as of the earlier of the date
money or other property is transferred or debt incurred by the Company, or the
date the member ceases to be a member.
(4) At the time a member becomes entitled to receive a distribution,
the member shall have the status of, and is entitled to all remedies available
to, a creditor of the Company with respect to the distribution. The Company's
indebtedness to a member incurred by reason of a distribution made in accordance
with this section shall be at parity with the Company's indebtedness to its
general, unsecured creditors except as otherwise agreed.
(5) If the Company distributes an obligation to make future payments as
payment of the fair value of a withdrawing member's interest, and distribution
of the obligation would otherwise be prohibited under subsection (1) at the time
it is made, the Company may issue the obligation and the following apply:
(a) At any time prior to the due date of the
obligation, payments of principal and interest may be made as a distribution to
the extent that a distribution may then be made under this section.
(b) At any time on or after the due date, the
obligation to pay principal and interest is considered distributed and treated
as indebtedness described in subsection (4) to the extent that a distribution
may then be made under this section.
<PAGE> 8
(c) The obligation is not considered a liability or
debt for purposes of determinations under subsection (1) except to the extent
that it is considered distributed and treated as indebtedness under this
subsection.
(6) The enforceability of a guaranty or other undertaking by a third
party relating to a distribution is not affected by the prohibition of the
distribution under subsection (1).
(7) If any claim is made to recover a distribution made contrary to
subsection (1) or if a violation of subsection (1) is raised as a defense to a
claim based upon a distribution, this section shall not prevent the person
receiving the distribution from asserting a right of rescission or other legal
or equitable rights.
Sec. F.4 A member, regardless of the nature of the member's
contribution, has no right to demand and receive a distribution from the Company
in any form other than cash, and a member may not be compelled to accept from
the Company a distribution of an asset in kind to the extent that the percentage
of the asset distributed to the member exceeds a percentage of that asset that
is equal to the percentage of the shares of membership interests held by him or
her in the Company.
ARTICLE G
VOTING
G.1 (1) The members of the Company shall vote in proportion to their
shares of membership interest in the Company.
(2) As used in this Agreement, a "majority in interest", or a similar
phrase, shall refer to a majority of the outstanding shares of membership
interests in capital and profits.
(3) Meetings may be conducted:
(a) Without notice, by actual meeting or telephonic communications, at
any time or place within the State of Michigan, at which time there need be
present or represented only a majority in interest of the outstanding shares and
a vote of a majority of those voting shall be necessary to take any action;
provided, that if such meeting is held without notice, then the vote of a
majority in interest of the outstanding shares shall be required to take any
action and the members not present shall be notified in writing within 10 days
of such meeting of any resolutions passed at such meeting.
<PAGE> 9
(b) With three (3) days notice given by any member, by actual meeting
or telephonic communications, at any time or place within the State of Michigan,
at which time there need be present or represented only forty percent (40%) of
the membership interests outstanding and a vote of a majority of those voting
shall be necessary to take any action.
The foregoing shall not modify any provision in this Agreement or the
Articles of Organization requiring a specific number of shares of membership
interests to pass a measure, including, but not limited to, the requirements for
continuing the Company after a dissolution event or for admitting a new member.
(4) All of the members shall at all times have the right to vote on the
following:
(a) The dissolution of the Company pursuant to section 801(c) of the
Act.
(b) Merger of the Company pursuant to sections 701 through 706 of the
Act.
(c) A transaction involving an actual or potential conflict of interest
between a member and the Company.
(d) An amendment to the Articles of Organization.
(e) The sale, exchange, lease, or other transfer of all or
substantially all of the assets of the Company other than in the ordinary course
of business.
Sec. G.2 Each Member shall be entitled to one vote in person or by
proxy for each share of membership interest having voting power held by such
Member, but no proxy shall be voted on after three (3) months from its date,
unless the proxy provides for a longer period. If the Articles of Organization
provide for more or less than one vote for any share of membership interest, on
any matter, every reference in this Article to a majority or other proportion of
interests shall refer to such majority or other proportion of the total votes of
all shares of membership interests.
ARTICLE H
SHARES
Sec. H.1. Every holder of a share of membership interest in the Company
shall be entitled to have a certificate signed by, or in the name of the Company
by two or more members certifying the
<PAGE> 10
number of shares of membership interest owned by him/her in the Company. All
certificates shall note that there are restrictions on assignment which are
fully set forth in the Articles of Organization and the Operating Agreement.
Certificates may be issued for partly paid shares and in such case upon the face
or back of the certificates issued to represent any such partly paid shares, the
total amount paid thereon shall be specified.
If the Company shall be authorized to issue more than one class of interests or
more than one series of any class, the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
interest or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights shall be set forth in full or summarized on
the face or back of the certificate which the Company shall issue to represent
such class or series of shares, provided that, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificates
which the Company shall issue to represent such class or series of shares, a
statement that the Company will furnish without charge to each member who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of interests or series thereof
and the qualifications, limitations or restrictions of such preferences and/or
rights.
Sec. H.2. Where a certificate is countersigned (1) by a transfer agent
other than the Company or its employee, or, (2) by a registrar, other than the
Company or its employee, any other signature on the certificate may be a
facsimile. In case any member, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such member, transfer agent or registrar before such certificate is
issued, it may be issued, by the Company with the same effect as if he/she were
such member, transfer agent or registrar at the date of issue.
Sec. H.3. The members may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by the
Company alleged to have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate or shares to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the members may, in their discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his/her legal representative, to advertise the
same in such manner as it shall require and/or to give the Company a bond in
such sum as it may direct as indemnity against any claim
<PAGE> 11
that may be made against the Company with respect to the certificate alleged to
have been lost, stolen, or destroyed.
Sec. H.4. In order that the Company may determine the members entitled
to notice of or to vote at any meeting of members or any adjournment thereof, or
to express consent to Company action in writing without a meeting, or entitled
to receive payment of any distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
interests orE for the purpose of any other lawful action, the members may fix,
in advance, a record date, which shall not be more than sixty (60) days nor less
than ten (10) days before the date of such meeting, nor more than sixty (60)
days prior to any other action. A determination of members of record entitled to
notice of or to vote at a meeting of members shall apply to any adjournment of
the meeting; provided, however, that the members may fix a new record date for
the adjourned meeting. Absent member action, the record date shall be ten (10)
days before the date of such meeting.
Sec. H.5. The Company shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares of membership
interest to receive distributions, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares of membership interest, and shall not be bound to recognize any equitable
or other claim interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of organization.
Sec. H.6. Distributions upon the shares of membership interests of the
Company, subject to the provisions of the Articles of Organization, if any, may
be declared by the members at any regular or special meeting, pursuant to the
law.E Distributions may be paid in cash, in property, or in shares of membership
interests (such shares only to be distributed pro rata) subject to the
provisions of the Articles of Organization, this Operating Agreement and the
Act.
Sec. H.7. Before payment of any distribution, there may be set aside
out of any funds of the Company available for distributions such sum or sums as
the members from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing distributions, or
for repairing or maintaining any property of the Company, or for such other
purpose as the members shall think conducive to the interest of the Company, and
the members may modify or abolish any such reserve in the manner in which it was
created.
<PAGE> 12
This Operating Agreement executed to be effective as of December 1, 1997.
VENTURE HOLDINGS TRUST
BY: /s/ Michael G. Torakis
---------------------------------
ITS:
VENTURE SERVICE COMPANY
BY: /s/ James E. Butler, Jr.
---------------------------------
ITS:
<PAGE> 1
EXHIBIT 3.21
BY-LAWS
OF
VENTURE EUROPE, INC.
ARTICLE I
SHARES
Sec. 1.1. Every holder of shares in the Corporation shall be entitled to have a
certificate signed by, or in the name of the Corporation by, the President and
the Secretary of the Corporation, certifying the number of shares owned by such
holder in the Corporation.
Certificates may be issued for partly paid shares and in such case upon the face
or back of the certificates issued to represent any such partly paid shares, the
total amount paid thereon shall be specified.
So long as the Corporation is an electing S corporation, the Corporation shall
not be authorized to issue more than one class of stock. If the Corporation
shall be authorized to issue more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
Corporation shall issue to represent such class or series of shares, provided
that, except as otherwise provided in the Michigan Business Corporation Act, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificates which the Corporation shall issue to represent such class or
series of shares, a statement that the Corporation will furnish without charge
to each Stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
Sec. 1.2. Where a certificate is countersigned (1) by a transfer agent other
than the Corporation or its employee, or, (2) by a registrar, other than the
Corporation or its employee, any other signature on the certificate may be a
facsimile. In case any Officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such Officer, transfer agent or registrar before such certificate is
issued, it may be issued, by the Corporation with
<PAGE> 2
the same effect as if he/she were such Officer, transfer agent or registrar at
the date of issue.
Sec. 1.3. The Board of Directors may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate or shares to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his/her legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost, stolen, or destroyed.
Sec. 1.4. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by prior
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Sec. 1.5. In the order that the Corporation may determine, the Stockholders
entitled to notice of or to vote at any meeting of Stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or<-1- 95> for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty (60) days nor less than ten
(10) days before the date of such meeting, nor more than sixty (60) days prior
to any other action. A determination of Stockholders of record entitled to
notice of or to vote at a meeting of Stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting. Absent Board of Director action, the
record date shall be ten (10) days before the date of such meeting.
Sec. 1.6. The Corporation shall be entitled to recognize the exclusive right of
a person registered on its books as the owner of shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim interest in such share or shares on the
part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Michigan.
<PAGE> 3
Sec. 1.7. Dividends upon the capital stock of the Corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to the law.<-1-
95> Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Articles of Incorporation and the
Michigan Business Corporation Act.
Sec. 1.8. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the Directors shall think conducive to the interest of the
Corporation, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
ARTICLE II
STOCKHOLDERS
Sec. 2.1. All meetings of the Stockholders for the election of Directors shall
be by waiver of notice and consent or shall be held at such place either within
or without the State of Michigan as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting. Meetings of
Stockholders for any other purpose may be held at such time and place, within or
without the State of Michigan as shall be stated in the notice of the meeting or
in a duly executed waiver of notice thereof.
Sec. 2.2. Annual meetings of Stockholders, if actually held, shall be held on
such date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a Board of Directors, and transact such other business as may
properly be brought before the meeting.
Sec. 2.3. When required by law, written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each Stockholder entitled
to vote at such meetings not less than ten (10) nor more than ninety (90) days
before the date of the meeting.
Sec. 2.4. Special meetings of the Stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Articles of Incorporation, may
be held by waiver of notice and consent or may be called by the Chairman of the
Board and shall be called by the Chairman of the Board or Secretary at the
request in writing of any two (2) of the Board of Directors, or at the request
in writing of Stockholders owning not less than ten (10%) percent of the entire
capital stock of the Corporation issued and outstanding and
<PAGE> 4
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Sec. 2.5. When required by law, written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be given not less than three (3) nor more than sixty
(60) days before the date of the meeting, to each Stockholder entitled to vote
at such a meeting.
Sec. 2.6. Business transacted at any special meeting of Stockholders shall be
limited to the purposes stated in the notice unless all of said Stockholders
agree to do otherwise.
Sec. 2.7. Except as otherwise provided by statute or by the Articles of
Incorporation, the holders of fifty (50%) percent of the stock issued and
outstanding and entitled to vote thereafter present in person or represented by
proxy, shall constitute a quorum at all meetings of the Stockholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the Stockholders, the Stockholders entitled to
vote thereat present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. Such adjourned
meeting at which a quorum shall be present or represented shall constitute the
meeting as originally notified. If the adjournment is for more than sixty (60)
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Stockholder of
record entitled to vote at the meeting.
Sec. 2.8. When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the
questions is one upon which by express provision of the statutes or of the
Articles of Incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
Sec. 2.9. Each Stockholder shall be entitled to one vote in person or by proxy
for each share of capital stock having voting power held by such Stockholder,
but no proxy shall be voted on after three (3) months from its date, unless the
proxy provides for a longer period. If the Articles of Incorporation provide for
more or less than one vote for any share, on any matter, every reference in this
Article to a majority or other proportion of stock shall refer to such majority
or other proportion of the total votes of all shares of stock. At all elections
of Directors of the Corporation, each Stockholder having voting power shall be
entitled to exercise the right of cumulative voting, if any, as provided in the
Articles of Incorporation.
Sec. 2.10. Whenever the vote of Stockholders at a meeting thereof
<PAGE> 5
is required or permitted to be taken for or in connection with any corporate
action, by any provision of the statutes, the meeting and vote of Stockholders
may be dispensed with if all of the Stockholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to the
corporate action taken; or if the Articles of Incorporation authorized the
action to be taken with the written consent of the holders of less than all of
the stock who would have been entitled to vote upon the action if a meeting were
held, then on the written consent of the Stockholders having not less than the
percentage of the number of votes as may be authorized in the Articles of
Incorporation; provided that in no case shall the written consent be by the
holders of stock having less than the minimum percentage of the vote required by
statute for the proposed corporate action, and provided that prompt notice must
be given to all Stockholders of the taking of corporate action without a meeting
and by less that unanimous written consent.
Sec. 2.11. The Officer who has charge of the stock ledger of the Corporation
shall prepare and make, at least ten (10) days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of shares registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Stockholder who is
present.
ARTICLE III
DIRECTORS
PART A - BOARD OF DIRECTORS
Sec. 3.1. The number of Directors which shall constitute the whole Board shall
consist of from one (1) to nine (9) Directors as is determined initially by the
Incorporators and thereafter from time to time by the Stockholders of the
Corporation.
Sec. 3.2. Vacancies and newly created Directorships resulting from any increase
in the authorized number of Directors may be filled by a majority of the
Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no Directors in office, then an election of
<PAGE> 6
Directors may be held in the manner provided by statute.
Sec. 3.3. The business of the Corporation shall be managed by its Board of
Directors which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Articles of Incorporation
or by these By-Laws directed or required to be exercised or done by the
Stockholders.
Sec. 3.4. A Director of the Corporation who is either present at a meeting of
the Board of Directors at which action on any corporate matter is taken, or who
is absent but has notice of such action by certified mail, shall be presumed to
have assented to the action taken unless his/her dissent shall be entered in the
minutes of the meeting or unless he/she shall file his/her written dissent to
such action with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by certified mail to the
Secretary of the Corporation immediately after the adjournment of the meeting or
within seven (7) days after written notification of such action by certified
mail. The objection shall be deemed made when mailed by certified mail. Such
right to dissent shall not apply to a Director who voted in favor of such
action.
Sec. 3.5. The Board of Directors of the Corporation may hold meetings, both
regular and special, either within or without the State of Michigan.
Sec. 3.6. The first meeting of each newly elected Board of Directors shall be
held at such time and place as shall be fixed by the vote of the Stockholders at
the annual meeting and no notice of such meeting shall be necessary to the newly
elected Directors in order (legally) to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the Stockholders to fix
the time or place of such first meeting of the newly elected Board of Directors,
or in the event such meeting is not held at the time and place so fixed by the
Stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors, or as shall be specified in a written waiver signed by all
of the Directors.
Sec. 3.7. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as shall from time to time be determined by the
Board.
Sec. 3.8. Special meetings of the Board may be called by the Chairman of the
Board on one day's notice to each Director, either personally or by mail or by
telegram; special meetings shall be called by the President or Secretary in like
manner and on like notice on the written request by two (2) of the Directors.
Sec. 3.9. At all meetings of the Board, a majority of the Directors shall
constitute a quorum for the transaction of business and the act of a majority of
the Directors present at any meeting
<PAGE> 7
at which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided, if a quorum shall not be present at any
meeting of the Board of Directors, the Directors present thereafter may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Sec. 3.10. Unless otherwise restricted by the Articles of Incorporation or these
By-Laws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting,
if all members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee.
Sec. 3.11. Members of the Board of Directors may participate in a Board meeting
by means of a telephone conference call or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this section shall constitute presence in
person at such meeting.
Sec. 3.12. When called for by a vote of the Stockholders, the Board of Directors
shall present at each annual meeting and at any special meeting of the
Stockholders a full and clear statement of the business and condition of the
Corporation.
Sec. 3.13. No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
The Corporation may lend money to, or guarantee any obligation of, or otherwise
assist any Officer or other employee of the Corporation or of its subsidiary,
including any Officer or employee who is a Director of the Corporation or its
subsidiary, whenever, in the judgment of the Directors, such loans, guaranty or
assistance may reasonably be expected to benefit the Corporation. The loan,
guaranty or other assistance may be with or without interest, and may be
unsecured, or secured in such manner as the Board of Directors shall approve,
including, without limitation, a pledge of shares of stock of the Corporation.
Nothing in this section contained shall be deemed to deny, limit or restrict the
powers of guaranty or warranty of any Corporation at common law or under any
statute.
Sec. 3.14. The Board of Directors may authorize any Officer or Officers, agent
or agents, to enter into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
No contract or transaction between a Corporation and one or more of its
Directors or Officers, or between a Corporation and any other
<PAGE> 8
Corporation, partnership, association, or other organization in which one or
more of its Directors or Officers are Directors or Officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the Director or Officer is present at or participates in the meeting of the
Board or committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if:
(A) The material facts as to his/her relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of Directors or
the committee, and the Board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the disinterested
Directors, even though the disinterested Directors be less than a quorum; or
(B) The material facts as to his/her relationship, interest and as to the
contract or transaction are disclosed or are known to the Stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the Stockholders; or
(C) The contract or transaction is fair as to the Corporation as of the time it
is authorized, approved or ratified, by the Board of Directors, a committee
thereof, or the Stockholders.
Common or interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
Sec. 3.15. The Directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
Director. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefrom.<-1- 95>
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
PART B - COMMITTEES
Sec. 3.16. The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, to consist of two or more of the
Directors of the Corporation. The Board may designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee, to the extent
provided in the resolution, and as otherwise restricted by the Michigan Business
Corporation Act, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; provided, however, that in the absence or disqualification of any
<PAGE> 9
member of such committee or committees, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he/she or they
constituted a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Sec. 3.17. Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required.
Sec. 3.18. A Director of the Corporation shall not be personally liable to the
Corporation or its Stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability for (i) any breach of the Director's
duty of loyalty to the Corporation or its Stockholders, (ii) acts or omissions
not in good faith or that involve intentional misconduct or a knowing violation
of law, (iii) a violation of Section 551(1) of the Michigan Business Corporation
Act, or (iv) any transaction from which the Director derived any improper
personal benefit.
Any repeal or modification of the foregoing paragraph by the Stockholders of the
Corporation shall not adversely affect any right or protection of a Director of
the Corporation existing at the time of such repeal or modification.
ARTICLE IV
OFFICERS
Sec. 4.1. The Board of Directors, within twenty-one (21) days after the annual
election of the Directors in each year, shall elect a President of the
Corporation and shall also elect a Secretary and a Treasurer, who need not be
members of the Board. The Board at that time or from time to time may elect one
or more Vice Presidents, Assistant Secretaries and Assistant Treasurers who may
or may not be members of the Board. The same person may hold any two or more
offices excepting those of President and Vice President, but no Officer shall
execute, acknowledge or verify any instrument in more than one capacity. The
Board may also appoint such other Officers and agents as it may deem necessary
for the transaction of the business of the Corporation.
Sec. 4.2. The term of office of all Officers_ shall be one year or until their
respective successors are chosen, but any Officer may be removed from office,
with or without cause, at any meeting of the Board of Directors by the
affirmative vote of a majority of the Directors then in office. The Board of
Directors shall have power to fill any vacancies in any Offices occurring from
whatever reason.
<PAGE> 10
Sec. 4.3. The salaries and other compensation of all Officers of the Corporation
shall be fixed by the Board of Directors.
Sec. 4.4. The Chairman of the Board shall be the Chief Executive Officer of the
Corporation and shall have responsibility for the general and active management
of the business of the Corporation, and shall see that all orders and
resolutions of the Board are carried into effect. He/She shall execute all
authorized conveyances, contracts, or other obligations in the name of the
Corporation except where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other Officer or agent of the
Corporation.
He shall preside at all meetings of the Stockholders and Directors and shall be
ex officio a member of all standing committees of the Board.
Sec. 4.5. The President shall be the Chief Operating Officer of the Corporation
and shall have responsibility for the general and active management of the
business of the Corporation, and shall see that all orders and resolutions of
the Board are carried into effect. He/She shall execute all authorized
conveyances, contracts, or other obligations in the name of the Corporation
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other Officer or agent of the Corporation.
Sec. 4.6. The Vice President (if any) in the order designated by the Board of
Directors or, lacking such a designation, by the President, shall in the absence
or disability of the President perform the duties and exercise the powers of the
President and shall perform such other duties as the Board of Directors shall
prescribe.
Sec. 4.7. The Secretary shall attend all meetings of the Board and all meetings
of the Stockholders and record all votes and the minutes of all proceedings in a
book to be kept for the purpose and shall perform like duties for the standing
committees when required. He/She shall give, or cause to be given, notice of all
meetings of the Stockholders and special meetings of the Board of Directors and
shall perform such other duties as may be prescribed by the Board of Directors
or by the President, under whose supervision he/she shall act. He/She shall
execute with the President all authorized conveyances, contracts or other
obligations in the name of the Corporation except as otherwise directed by the
Board of Directors. He/She shall keep in safe custody the seal of the
Corporation and, when authorized by the Board, affix the same to any instrument
requiring it and, when so affixed, it shall be attested by his/her signature or
by the signature of the Treasurer or an Assistant Secretary.
The Secretary shall keep a register of the post office address of each
shareholder. Said address shall be furnished to the Secretary by such
shareholder and the responsibility for keeping said address
<PAGE> 11
current shall be upon the shareholder. The Secretary shall have general charge
of the stock transfer books of the Corporation.
Sec. 4.8. The Treasurer shall have custody of and keep account of all money,
funds and property of the Corporation, unless otherwise determined by the Board
of Directors, and he/she shall render such accounts and present such statements
to the Directors and President as may be required of him/her. He/She shall
deposit funds of the Corporation which may come into his/her hands in such bank
or banks as the Board of Directors may designate. He/She shall keep his/her bank
accounts in the name of the Corporation and shall exhibit his/her books and
accounts at all reasonable times to any Director of the Corporation upon
application at the office of the Corporation during business hours. If required
by the Board of Directors, he/she shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board for the
faithful performance of the duties of his/her office and for the restoration to
the Corporation in case of his/her death, resignation or removal from office of
all books, papers, vouchers, money and other property of whatever kind in
his/her possession or under his/her control belonging to the Corporation.
Sec. 4.9. The Assistant Secretaries and the Assistant Treasurers (if any),
respectively, (in the order designated by the Board of Directors or lacking such
designation, by the President) in the absence of the Secretary or the Treasurer,
as the case may be, shall perform the duties and exercise the powers of such
Secretary or Treasurer and shall perform such other duties as the Board of
Directors shall prescribe.
ARTICLE V
NOTICES
Sec. 5.1. Whenever, under the provisions of the statutes or of the Articles of
Incorporation or of these By-Laws, notice is required to be given to any
Director or Stockholder, it shall not be construed to mean personal notice
unless specifically allowed, but such notice may be given in writing, by mail,
addressed to such Director or Stockholder, at his/her address at it appears on
the records of the Corporation, with postage thereon prepaid, and such notice
shall be deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to Directors may also be given by telegram.
Sec. 5.2. Whenever any notice is required to be given under the provisions of
the statutes or of the Articles of Incorporation or of these By-Laws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.
<PAGE> 12
ARTICLE VI
INDEMNIFICATION
Sec. 6.1. To the extent permitted by Michigan law from time to time in effect
and subject to the provisions of Section 3 of this Article, the Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (whether or not by or
in the right of the Corporation) by reason of the fact that he/she is or was a
Director, Officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a Director, Officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him/her in connection with
such action, suit or proceeding if he/she acted in good faith and in a manner
he/she reasonably believed to be in or not opposed to the best interest of the
Corporation, or its Stockholders, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his/her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself create a presumption that the person did not act in good faith and in a
manner which he/she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Sec. 6.2. To the extent permitted by Michigan law from time to time in effect
and subject to the provisions of the following Section of this Article, the
Corporation shall have power to indemnify any person who was or is a party to or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he/she is or was a Director, Officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a Director, Officer, employee or agent of another Corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him/her in connection with the defense
or settlement of such action or suit if he/she acted in good faith and in a
manner he/she reasonably believed to be in or not opposed to the best interests
of the Corporation or its Stockholders and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his/her duty of the Corporation unless and only to the extent that the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all circumstances of the
case, such person
<PAGE> 13
is fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
Sec. 6.3. Any indemnification under Sections 1 and 2 of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the Director,
Officer, employee or agent is proper in the circumstances because he/she has met
the applicable standard of conduct set forth in said Sections 1 or 2. Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable and a
quorum of disinterested Directors so directs, by independent legal counsel
(compensated by the Corporation) in a written opinion, or (3) by the
Stockholders.
Sec. 6.4. If a Director, Officer, employee or agent of a Corporation has been
successful on the merits or otherwise as a party to any action, suit or
proceeding referred to in Sections 1 or 2 of this Article, or with respect to
any claim, issue or matter therein (to the extent that a portion of his/her
expenses can be reasonably allocated thereto), he/she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him/her in connection therewith.
Sec. 6.5. Expenses incurred in defending a civil, criminal, administrative or
investigative action, suit or proceeding, as authorized by the Board of
Directors, whether a disinterested quorum exists or not, shall be indemnified
upon receipt of an undertaking by or on behalf of the Director, Officer,
employee or agent to repay such amount unless it shall ultimately be determined
that he/she is entitled to be indemnified by the Corporation as authorized in
this Article.
Sec. 6.6. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any agreement, vote of Stockholders or disinterested Directors, or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a Director, Officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Sec. 6.7. The Corporation may purchase and maintain insurance on behalf of any
person who is or was a Director, Officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against
him/her and incurred by him/her in any such capacity, or arising out of his/her
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of this Article or of Sections
561 to 569 of the Michigan Business
<PAGE> 14
Corporation Act.
ARTICLE VII
MISCELLANEOUS
Sec. 7.1. These By-Laws may be altered, amended or repealed or new By-Laws may
be adopted by the Stockholders or by the Board of Directors, unless such power
is reserved exclusively to the Stockholders by the Articles of Incorporation, at
any regular meeting of the Stockholders or of the Board of Directors or at any
special meeting of the Stockholders or of the Board of Directors if notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such special meeting.
<PAGE> 1
EXHIBIT 3.22
BY-LAWS
OF
VENTURE EU CORPORATION
ARTICLE I
SHARES
Sec. 1.1. Every holder of shares in the Corporation shall be entitled to have a
certificate signed by, or in the name of the Corporation by, the Chairman of the
Board and the Secretary of the Corporation, certifying the number of shares
owned by such holder in the Corporation.
Certificates may be issued for partly paid shares and in such case upon the face
or back of the certificates issued to represent any such partly paid shares, the
total amount paid thereon shall be specified.
So long as the Corporation is an electing S corporation, the Corporation shall
not be authorized to issue more than one class of stock. If the Corporation
shall be authorized to issue more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
Corporation shall issue to represent such class or series of shares, provided
that, except as otherwise provided in the Michigan Business Corporation Act, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificates which the Corporation shall issue to represent such class or
series of shares, a statement that the Corporation will furnish without charge
to each Stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
Sec. 1.2. Where a certificate is countersigned (1) by a transfer agent other
than the Corporation or its employee, or, (2) by a registrar, other than the
Corporation or its employee, any other signature on the certificate may be a
facsimile. In case any Officer, transfer agent or registrar who has signed
1
<PAGE> 2
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such Officer, transfer agent or registrar before such certificate
is issued, it may be issued, by the Corporation with the same effect as if
he/she were such Officer, transfer agent or registrar at the date of issue.
Sec. 1.3. The Board of Directors may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate or shares to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his/her legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost, stolen, or destroyed.
Sec. 1.4. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by prior
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Sec. 1.5. In the order that the Corporation may determine, the Stockholders
entitled to notice of or to vote at any meeting of Stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) days nor less than ten (10) days before
the date of such meeting, nor more than sixty (60) days prior to any other
action. A determination of Stockholders of record entitled to notice of or to
vote at a meeting of Stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting. Absent Board of Director action, the record date shall be ten
(10) days before the date of such meeting.
Sec. 1.6. The Corporation shall be entitled to recognize the exclusive right of
a person registered on its books as the owner of shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim interest in such share or shares on the
part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Michigan.
2
<PAGE> 3
Sec. 1.7. Dividends upon the capital stock of the Corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to the law._
95> Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Articles of Incorporation and the
Michigan Business Corporation Act.
Sec. 1.8. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the Directors shall think conducive to the interest of the
Corporation, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
ARTICLE II
STOCKHOLDERS
Sec. 2.1. All meetings of the Stockholders for the election of Directors shall
be by waiver of notice and consent or shall be held at such place either within
or without the State of Michigan as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting. Meetings of
Stockholders for any other purpose may be held at such time and place, within or
without the State of Michigan as shall be stated in the notice of the meeting or
in a duly executed waiver of notice thereof.
Sec. 2.2. Annual meetings of Stockholders, if actually held, shall be held on
such date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a Board of Directors, and transact such other business as may
properly be brought before the meeting.
Sec. 2.3. When required by law, written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each Stockholder entitled
to vote at such meetings not less than ten (10) nor more than ninety (90) days
before the date of the meeting.
Sec. 2.4. Special meetings of the Stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Articles of Incorporation, may
be held by waiver of notice and consent or may be called by the Chairman of the
Board and shall be called by the Chairman of the Board or
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Secretary at the request in writing of any two (2) of the Board of Directors, or
at the request in writing of Stockholders owning not less than ten (10%) percent
of the entire capital stock of the Corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Sec. 2.5. When required by law, written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be given not less than three (3) nor more than sixty
(60) days before the date of the meeting, to each Stockholder entitled to vote
at such a meeting.
Sec. 2.6. Business transacted at any special meeting of Stockholders shall be
limited to the purposes stated in the notice unless all of said Stockholders
agree to do otherwise.
Sec. 2.7. Except as otherwise provided by statute or by the Articles of
Incorporation, the holders of fifty (50%) percent of the stock issued and
outstanding and entitled to vote thereafter present in person or represented by
proxy, shall constitute a quorum at all meetings of the Stockholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the Stockholders, the Stockholders entitled to
vote thereat present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. Such adjourned
meeting at which a quorum shall be present or represented shall constitute the
meeting as originally notified. If the adjournment is for more than sixty (60)
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Stockholder of
record entitled to vote at the meeting.
Sec. 2.8. When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the
questions is one upon which by express provision of the statutes or of the
Articles of Incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
Sec. 2.9. Each Stockholder shall be entitled to one vote in person or by proxy
for each share of capital stock having voting power held by such Stockholder,
but no proxy shall be voted on after three (3) months from its date, unless the
proxy provides for a longer period. If the Articles of Incorporation provide for
more or less than one vote for any share, on any matter, every reference in this
Article to a majority or other proportion of stock shall refer to such majority
or other proportion of the total votes of all shares of stock. At all elections
of Directors of the Corporation,
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each Stockholder having voting power shall be entitled to exercise the right of
cumulative voting, if any, as provided in the Articles of Incorporation.
Sec. 2.10. Whenever the vote of Stockholders at a meeting thereof is required or
permitted to be taken for or in connection with any corporate action, by any
provision of the statutes, the meeting and vote of Stockholders may be dispensed
with if all of the Stockholders who would have been entitled to vote upon the
action if such meeting were held shall consent in writing to the corporate
action taken; or if the Articles of Incorporation authorized the action to be
taken with the written consent of the holders of less than all of the stock who
would have been entitled to vote upon the action if a meeting were held, then on
the written consent of the Stockholders having not less than the percentage of
the number of votes as may be authorized in the Articles of Incorporation;
provided that in no case shall the written consent be by the holders of stock
having less than the minimum percentage of the vote required by statute for the
proposed corporate action, and provided that prompt notice must be given to all
Stockholders of the taking of corporate action without a meeting and by less
that unanimous written consent.
Sec. 2.11. The Officer who has charge of the stock ledger of the Corporation
shall prepare and make, at least ten (10) days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of shares registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Stockholder who is
present.
ARTICLE III
DIRECTORS
PART A - BOARD OF DIRECTORS
Sec. 3.1. The number of Directors which shall constitute the whole Board shall
consist of from one (1) to nine (9) Directors as is determined initially by the
Incorporators and thereafter from time to
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time by the Stockholders of the Corporation.
Sec. 3.2. Vacancies and newly created Directorships resulting from any increase
in the authorized number of Directors may be filled by a majority of the
Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute.
Sec. 3.3. The business of the Corporation shall be managed by its Board of
Directors which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Articles of Incorporation
or by these By-Laws directed or required to be exercised or done by the
Stockholders.
Sec. 3.4. A Director of the Corporation who is either present at a meeting of
the Board of Directors at which action on any corporate matter is taken, or who
is absent but has notice of such action by certified mail, shall be presumed to
have assented to the action taken unless his/her dissent shall be entered in the
minutes of the meeting or unless he/she shall file his/her written dissent to
such action with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by certified mail to the
Secretary of the Corporation immediately after the adjournment of the meeting or
within seven (7) days after written notification of such action by certified
mail. The objection shall be deemed made when mailed by certified mail. Such
right to dissent shall not apply to a Director who voted in favor of such
action.
Sec. 3.5. The Board of Directors of the Corporation may hold meetings, both
regular and special, either within or without the State of Michigan.
Sec. 3.6. The first meeting of each newly elected Board of Directors shall be
held at such time and place as shall be fixed by the vote of the Stockholders at
the annual meeting and no notice of such meeting shall be necessary to the newly
elected Directors in order (legally) to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the Stockholders to fix
the time or place of such first meeting of the newly elected Board of Directors,
or in the event such meeting is not held at the time and place so fixed by the
Stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors, or as shall be specified in a written waiver signed by all
of the Directors.
Sec. 3.7. Regular meetings of the Board of Directors may be held without notice
at such time and
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at such place as shall from time to time be determined by the Board.
Sec. 3.8. Special meetings of the Board may be called by the Chairman of the
Board on one day's notice to each Director, either personally or by mail or by
telegram; special meetings shall be called by the President or Secretary in like
manner and on like notice on the written request by two (2) of the Directors.
Sec. 3.9. At all meetings of the Board, a majority of the Directors shall
constitute a quorum for the transaction of business and the act of a majority of
the Directors present at any meeting at which there is a quorum shall be the act
of the Board of Directors, except as may be otherwise specifically provided, if
a quorum shall not be present at any meeting of the Board of Directors, the
Directors present thereafter may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Sec. 3.10. Unless otherwise restricted by the Articles of Incorporation or these
By-Laws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting,
if all members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee.
Sec. 3.11. Members of the Board of Directors may participate in a Board meeting
by means of a telephone conference call or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this section shall constitute presence in
person at such meeting.
Sec. 3.12. When called for by a vote of the Stockholders, the Board of Directors
shall present at each annual meeting and at any special meeting of the
Stockholders a full and clear statement of the business and condition of the
Corporation.
Sec. 3.13. No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
The Corporation may lend money to, or guarantee any obligation of, or otherwise
assist any Officer or other employee of the Corporation or of its subsidiary,
including any Officer or employee who is a Director of the Corporation or its
subsidiary, whenever, in the judgment of the Directors, such loans, guaranty or
assistance may reasonably be expected to benefit the Corporation. The loan,
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guaranty or other assistance may be with or without interest, and may be
unsecured, or secured in such manner as the Board of Directors shall approve,
including, without limitation, a pledge of shares of stock of the Corporation.
Nothing in this section contained shall be deemed to deny, limit or restrict the
powers of guaranty or warranty of any Corporation at common law or under any
statute.
Sec. 3.14. The Board of Directors may authorize any Officer or Officers, agent
or agents, to enter into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
No contract or transaction between a Corporation and one or more of its
Directors or Officers, or between a Corporation and any other Corporation,
partnership, association, or other organization in which one or more of its
Directors or Officers are Directors or Officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the Director
or Officer is present at or participates in the meeting of the Board or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:
(A) The material facts as to his/her relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested Directors, even though the disinterested
Directors be less than a quorum; or
(B) The material facts as to his/her relationship, interest and as to the
contract or transaction are disclosed or are known to the Stockholders
entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the Stockholders; or
(C) The contract or transaction is fair as to the Corporation as of the time it
is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the Stockholders.
Common or interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
Sec. 3.15. The Directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
Director. No such payment shall preclude any Director from serving
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the Corporation in any other capacity and receiving compensation therefrom.<-1-
95> Members of special or standing committees may be allowed like compensation
for attending committee meetings.
PART B - COMMITTEES
Sec. 3.16. The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, to consist of two or more of the
Directors of the Corporation. The Board may designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee, to the extent
provided in the resolution, and as otherwise restricted by the Michigan Business
Corporation Act, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; provided, however, that in the absence or disqualification of any
member of such committee or committees, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he/she or they
constituted a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Sec. 3.17. Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required.
Sec. 3.18. A Director of the Corporation shall not be personally liable to the
Corporation or its Stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability for (i) any breach of the Director's
duty of loyalty to the Corporation or its Stockholders, (ii) acts or omissions
not in good faith or that involve intentional misconduct or a knowing violation
of law, (iii) a violation of Section 551(1) of the Michigan Business Corporation
Act, or (iv) any transaction from which the Director derived any improper
personal benefit.
Any repeal or modification of the foregoing paragraph by the Stockholders of the
Corporation shall not adversely affect any right or protection of a Director of
the Corporation existing at the time of such repeal or modification.
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ARTICLE IV
OFFICERS
Sec. 4.1. The Board of Directors, within twenty-one (21) days after the annual
election of the Directors in each year, shall elect a President of the
Corporation and shall also elect a Secretary and a Treasurer, who need not be
members of the Board. The Board at that time or from time to time may elect one
or more Vice Presidents, Assistant Secretaries and Assistant Treasurers who may
or may not be members of the Board. The same person may hold any two or more
offices excepting those of President and Vice President, but no Officer shall
execute, acknowledge or verify any instrument in more than one capacity. The
Board may also appoint such other Officers and agents as it may deem necessary
for the transaction of the business of the Corporation.
Sec. 4.2. The term of office of all Officers shall be one year or until their
respective successors are chosen, but any Officer may be removed from office,
with or without cause, at any meeting of the Board of Directors by the
affirmative vote of a majority of the Directors then in office. The Board of
Directors shall have power to fill any vacancies in any Offices occurring from
whatever reason.
Sec. 4.3. The salaries and other compensation of all Officers of the Corporation
shall be fixed by the Board of Directors.
Sec. 4.4. The Chairman of the Board shall be the Chief Executive Officer of the
Corporation and shall have responsibility for the general and active management
of the business of the Corporation, and shall see that all orders and
resolutions of the Board are carried into effect._ He/She shall execute
all authorized conveyances, contracts, or other obligations in the name of the
Corporation except where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other Officer or agent of the
Corporation.
He shall preside at all meetings of the Stockholders and Directors and shall be
ex officio a member of all standing committees of the Board.
Sec. 4.5. The President shall be the Chief Operating Officer of the Corporation
and shall have responsibility for the general and active management of the
business of the Corporation, and shall see that all orders and resolutions of
the Board are carried into effect._ He/She shall execute all authorized
conveyances, contracts, or other obligations in the name of the Corporation
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some
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other Officer or agent of the Corporation.
Sec. 4.6. The Vice President (if any) in the order designated by the Board of
Directors or, lacking such a designation, by the President, shall in the absence
or disability of the President perform the duties and exercise the powers of the
President and shall perform such other duties as the Board of Directors shall
prescribe.
Sec. 4.7. The Secretary shall attend all meetings of the Board and all meetings
of the Stockholders and record all votes and the minutes of all proceedings in a
book to be kept for the purpose and shall perform like duties for the standing
committees when required. He/She shall give, or cause to be given, notice of all
meetings of the Stockholders and special meetings of the Board of Directors and
shall perform such other duties as may be prescribed by the Board of Directors
or by the President, under whose supervision he/she shall act. He/She shall
execute with the President all authorized conveyances, contracts or other
obligations in the name of the Corporation except as otherwise directed by the
Board of Directors. He/She shall keep in safe custody the seal of the
Corporation and, when authorized by the Board, affix the same to any instrument
requiring it and, when so affixed, it shall be attested by his/her signature or
by the signature of the Treasurer or an Assistant Secretary.
The Secretary shall keep a register of the post office address of each
shareholder._ Said address shall be furnished to the Secretary by such
shareholder and the responsibility for keeping said address current shall be
upon the shareholder. The Secretary shall have general charge of the stock
transfer books of the Corporation.
Sec. 4.8. The Treasurer shall have custody of and keep account of all money,
funds and property of the Corporation, unless otherwise determined by the Board
of Directors, and he/she shall render such accounts and present such statements
to the Directors and President as may be required of him/her. He/She shall
deposit funds of the Corporation which may come into his/her hands in such bank
or banks as the Board of Directors may designate. He/She shall keep his/her bank
accounts in the name of the Corporation and shall exhibit his/her books and
accounts at all reasonable times to any Director of the Corporation upon
application at the office of the Corporation during business hours. If required
by the Board of Directors, he/she shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board for the
faithful performance of the duties of his/her office and for the restoration to
the Corporation in case of his/her death, resignation or removal from office of
all books, papers, vouchers, money and other property of whatever kind in
his/her possession or under his/her control belonging to the Corporation.
Sec. 4.9. The Assistant Secretaries and the Assistant Treasurers (if any),
respectively, (in the order
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designated by the Board of Directors or lacking such designation, by the
President) in the absence of the Secretary or the Treasurer, as the case may be,
shall perform the duties and exercise the powers of such Secretary or Treasurer
and shall perform such other duties as the Board of Directors shall prescribe.
ARTICLE V
NOTICES
Sec. 5.1. Whenever, under the provisions of the statutes or of the Articles of
Incorporation or of these By-Laws, notice is required to be given to any
Director or Stockholder, it shall not be construed to mean personal notice
unless specifically allowed, but such notice may be given in writing, by mail,
addressed to such Director or Stockholder, at his/her address at it appears on
the records of the Corporation, with postage thereon prepaid, and such notice
shall be deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to Directors may also be given by telegram.
Sec. 5.2. Whenever any notice is required to be given under the provisions of
the statutes or of the Articles of Incorporation or of these By-Laws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE VI
INDEMNIFICATION
Sec. 6.1. To the extent permitted by Michigan law from time to time in effect
and subject to the provisions of Section 3 of this Article, the Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (whether or not by or
in the right of the Corporation) by reason of the fact that he/she is or was a
Director, Officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a Director, Officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and
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reasonably incurred by him/her in connection with such action, suit or
proceeding if he/she acted in good faith and in a manner he/she reasonably
believed to be in or not opposed to the best interest of the Corporation, or its
Stockholders, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his/her conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself create a
presumption that the person did not act in good faith and in a manner which
he/she reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Sec. 6.2. To the extent permitted by Michigan law from time to time in effect
and subject to the provisions of the following Section of this Article, the
Corporation shall have power to indemnify any person who was or is a party to or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he/she is or was a Director, Officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a Director, Officer, employee or agent of another Corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him/her in connection with the defense
or settlement of such action or suit if he/she acted in good faith and in a
manner he/she reasonably believed to be in or not opposed to the best interests
of the Corporation or its Stockholders and except that no indemnification shall
be made in respect of any_ claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his/her duty of the Corporation unless and only to the extent
that the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Sec. 6.3. Any indemnification under Sections 1 and 2 of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the Director,
Officer, employee or agent is proper in the circumstances because he/she has met
the applicable standard of conduct set forth in said Sections 1 or 2. Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable and a
quorum of disinterested Directors so directs, by independent legal counsel
(compensated by the Corporation) in a written opinion, or (3) by the
Stockholders.
Sec. 6.4. If a Director, Officer, employee or agent of a Corporation has been
successful on the merits
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or otherwise as a party to any action, suit or proceeding referred to in
Sections 1 or 2 of this Article, or with respect to any claim, issue or matter
therein (to the extent that a portion of his/her expenses can be reasonably
allocated thereto), he/she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him/her in connection
therewith.
Sec. 6.5. Expenses incurred in defending a civil, criminal, administrative or
investigative action, suit or proceeding, as authorized by the Board of
Directors, whether a disinterested quorum exists or not, shall be indemnified
upon receipt of an undertaking by or on behalf of the Director, Officer,
employee or agent to repay such amount unless it shall ultimately be determined
that he/she is entitled to be indemnified by the Corporation as authorized in
this Article.
Sec. 6.6. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any agreement, vote of Stockholders or disinterested Directors, or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a Director, Officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Sec. 6.7. The Corporation may purchase and maintain insurance on behalf of any
person who is or was a Director, Officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against
him/her and incurred by him/her in any such capacity, or arising out of his/her
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of this Article or of Sections
561 to 569 of the Michigan Business Corporation Act.
ARTICLE VII
MISCELLANEOUS
Sec. 7.1. These By-Laws may be altered, amended or repealed or new By-Laws may
be adopted by the Stockholders or by the Board of Directors, unless such power
is reserved exclusively to the Stockholders by the Articles of Incorporation, at
any regular meeting of the Stockholders or of the Board of Directors or at any
special meeting of the Stockholders or of the Board of Directors if notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such special meeting.
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EXHIBIT 4.1
- --------------------------------------------------------------------------------
VENTURE HOLDINGS TRUST
11% SENIOR NOTES DUE 2007
------------------------
INDENTURE
DATED AS OF MAY 27, 1999
------------------------
THE HUNTINGTON NATIONAL BANK
TRUSTEE
------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.07
(c) 7.06;10.02
(d) 7.06
314(a) 4.03;10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01
(b) 7.05,10.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a) (last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.12
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
(b) N.A.
(c) 10.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
</TABLE>
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<TABLE>
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................1
Section 1.01. Definitions................................................................................1
Section 1.02. Other Definitions.........................................................................26
Section 1.03. Incorporation by Reference of Trust Indenture Act.........................................27
Section 1.04. Rules of Construction.....................................................................28
ARTICLE 2. THE NOTES.............................................................................................28
Section 2.01. Form and Dating...........................................................................28
Section 2.02. Execution and Authentication..............................................................29
Section 2.03. Registrar and Paying Agent................................................................29
Section 2.04. Paying Agent to Hold Money in Trust.......................................................30
Section 2.05. Holder Lists..............................................................................30
Section 2.06. Transfer and Exchange.....................................................................30
Section 2.07. Replacement Notes.........................................................................42
Section 2.08. Outstanding Notes.........................................................................43
Section 2.09. Treasury Notes............................................................................43
Section 2.10. Temporary Notes...........................................................................43
Section 2.11. Cancellation..............................................................................44
Section 2.12. Defaulted Interest........................................................................44
ARTICLE 3. REDEMPTION AND PREPAYMENT AND SATISFACTION AND DISCHARGE..............................................44
Section 3.01. Notices to Trustee........................................................................44
Section 3.02. Selection of Notes to Be Redeemed.........................................................44
Section 3.03. Notice of Redemption......................................................................45
Section 3.04. Effect of Notice of Redemption............................................................46
Section 3.05. Deposit of Redemption Price...............................................................46
Section 3.06. Notes Redeemed in Part....................................................................46
Section 3.07. Optional Redemption.......................................................................46
Section 3.08. Mandatory Redemption......................................................................47
Section 3.09. Offer to Purchase by Application of Excess Proceeds.......................................47
Section 3.10 Satisfaction and Discharge................................................................49
ARTICLE 4. COVENANTS.............................................................................................50
Section 4.01. Payment of Notes..........................................................................50
Section 4.02. Maintenance of Office or Agency...........................................................50
Section 4.03. Reports...................................................................................51
Section 4.04. Compliance Certificate....................................................................51
Section 4.05. Taxes.....................................................................................52
Section 4.06. Stay, Extension and Usury Laws............................................................52
Section 4.07. Restricted Payments.......................................................................52
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries............................58
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock................................59
Section 4.10. Limitation on Foreign Indebtedness........................................................63
</TABLE>
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<TABLE>
<S> <C>
Section 4.11. Asset Sales...............................................................................64
Section 4.12. Transactions with Affiliates..............................................................66
Section 4.13. Liens.....................................................................................67
Section 4.14. Business Activities.......................................................................68
Section 4.15. Corporate Existence.......................................................................68
Section 4.16. Change of Control.........................................................................68
Section 4.17. Additional Guarantors.....................................................................69
Section 4.18. Designation of Restricted and Unrestricted Subsidiaries...................................69
Section 4.19. Limitation on Amendments to Agreements....................................................70
Section 4.20. Payments for Consent......................................................................70
Section 4.21. Corporate Opportunities...................................................................70
ARTICLE 5. SUCCESSORS............................................................................................71
Section 5.01. Merger, Consolidation, or Sale of Assets..................................................71
Section 5.02. Successor Corporation Substituted.........................................................73
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................74
Section 6.01. Events of Default.........................................................................74
Section 6.02. Acceleration..............................................................................76
Section 6.03. Other Remedies............................................................................77
Section 6.04. Waiver of Past Defaults...................................................................77
Section 6.05. Control by Majority.......................................................................77
Section 6.06. Limitation on Suits.......................................................................77
Section 6.07. Rights of Holders of Notes to Receive Payment.............................................78
Section 6.07. Collection Suit by Trustee................................................................78
Section 6.08. Trustee May File Proofs of Claim..........................................................78
Section 6.09. Priorities................................................................................79
Section 6.10. Undertaking for Costs.....................................................................79
ARTICLE 7 TRUSTEE...............................................................................................79
Section 7.01. Duties of Trustee.........................................................................80
Section 7.02. Rights of Trustee.........................................................................80
Section 7.03. Individual Rights of Trustee..............................................................81
Section 7.04. Trustee's Disclaimer......................................................................81
Section 7.05. Notice of Defaults........................................................................81
Section 7.06. Reports by Trustee to Holders of the Notes................................................82
Section 7.07. Compensation and Indemnity................................................................82
Section 7.08. Replacement of Trustee....................................................................83
Section 7.09. Successor Trustee by Merger, etc..........................................................84
Section 7.10. Eligibility; Disqualification.............................................................84
Section 7.11. Preferential Collection of Claims Against Trust...........................................84
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................84
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance..................................84
</TABLE>
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<TABLE>
<S> <C>
Section 8.02. Legal Defeasance and Discharge............................................................84
Section 8.03. Covenant Defeasance.......................................................................85
Section 8.04. Conditions to Legal or Covenant Defeasance................................................85
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions.......................................................................87
Section 8.06. Repayment to Trust........................................................................87
Section 8.07. Reinstatement.............................................................................87
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER......................................................................88
Section 9.01. Without Consent of Holders of Notes.......................................................88
Section 9.02. With Consent of Holders of Notes..........................................................89
Section 9.03. Compliance with Trust Indenture Act.......................................................90
Section 9.04. Revocation and Effect of Consents.........................................................90
Section 9.05. Notation on or Exchange of Notes..........................................................90
Section 9.06. Trustee to Sign Amendments, etc...........................................................91
ARTICLE 10. SUBSIDIARY GUARANTEES................................................................................91
Section 10.01. Guarantee................................................................................91
Section 10.02. Limitation on Guarantor Liability........................................................92
Section 10.03. Execution and Delivery of Subsidiary Guarantee and Supplemental
Indenture......................................................................................92
ARTICLE 11. MISCELLANEOUS........................................................................................93
Section 11.01. Trust Indenture Act Controls.............................................................93
Section 11.02. Notices..................................................................................93
Section 11.03. Communication by Holders of Notes with Other Holders of Notes............................94
Section 11.04. Certificate and Opinion as to Conditions Precedent.......................................94
Section 11.05. Statements Required in Certificate or Opinion............................................95
Section 11.06. Rules by Trustee and Agents..............................................................95
Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders...................................................................................95
Section 11.08. Governing Law............................................................................95
Section 11.09. No Adverse Interpretation of Other Agreements............................................96
Section 11.10. Successors...............................................................................96
Section 11.11. Severability.............................................................................96
Section 11.12. Counterpart Originals....................................................................96
Section 11.13. Table of Contents, Headings, etc.........................................................96
</TABLE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
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Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
Exhibit G SPECIAL OPINION OF TAX COUNSEL
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<PAGE> 8
INDENTURE dated as of May 27, 1999 between the Venture Holdings Trust
(the "Trust"), and The Huntington National Bank, as trustee (the "Trustee").
The Trust and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 11% Senior
Notes due 2007 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"1997 Senior Notes" means the 9 1/2% Senior Notes due 2005 issued under
that certain Indenture dated as of July 1, 1997 among the Trust and certain of
the Guarantors and The Huntington National Bank, as Trustee, as the same may be
amended from time-to-time.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness or Disqualified Stock of any other Person
existing at the time such other Person is merged with or into or became
a Restricted Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Restricted
Subsidiary of, such specified Person; provided, however, that
Indebtedness of such Person that is redeemed, defeased, retired or
otherwise repaid at the time of or immediately upon consummation of the
transaction by which such Person becomes or merges with or into the
Trust or a Subsidiary of the Trust shall not be Acquired Debt; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person, provided, however, that any such
Indebtedness that is redeemed, defeased, retired or otherwise repaid at
the time of or immediately upon consummation of the transaction by
which such asset is acquired shall not be Acquired Debt.
"Acquisition" means the purchase of other acquisition of any Person or
substantially all the assets of any Person or line of business of such Person by
any other Person, whether by purchase, merger, consolidation, or other transfer,
and whether or not for consideration.
"Additional Notes" means up to $50.0 million aggregate principal amount
of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.
<PAGE> 9
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings. No Person in whom a Receivables
Subsidiary makes an Investment in connection with a Qualified Receivables
Transaction will be deemed to be an Affiliate of the Trust or any of its
Subsidiaries solely by reason of such Investment.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than sales of inventory in the ordinary course
of business consistent with either past practices or accepted business
practices in the industry; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the Trust and
its Restricted Subsidiaries taken as a whole shall be governed by the
provisions of Sections 4.16 and 5.01 hereof and not by the provisions
of Section 4.11 hereof; and
(2) the issuance of Equity Interests in any of the Trust's
Restricted Subsidiaries or the sale of Equity Interests in any of their
Restricted Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed
to be Asset Sales:
(1) any single transaction or series of related transactions
that involves assets having a fair market value of less than $1.0
million;
(2) a transfer of assets between or among the Trust and its
Restricted Subsidiaries;
(3) an issuance or transfer of Equity Interests by a
Restricted Subsidiary to the Trust or to another Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of
equipment, inventory, accounts receivable or other assets (including,
without limitation, the sale, lease, conveyance or other disposition of
damaged, worn-out or other obsolete property if such property is no
longer necessary for the proper conduct of the business of the Trust or
such Restricted Subsidiary) in the ordinary course of business;
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<PAGE> 10
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof.
(7) sales of Receivables to a Receivables Subsidiary for the
fair market value thereof, including cash in an amount at least equal
to 80% of the book value thereof as determined in accordance with GAAP,
it being understood that, for the purposes of this clause (7), notes
received in exchange for the transfer of Receivables will be deemed
cash if the Receivables Subsidiary or other payor is required to repay
said notes as soon as practicable from available cash collections less
amounts required to be established as reserves pursuant to contractual
agreements with entities that are not Affiliates of the Trust or any of
the Guarantors entered into as part of a Qualified Receivables
Transaction; and
(8) transfers of Receivables (or a fractional undivided
interest therein) by a Receivables Subsidiary in connection with a
Qualified Receivables Transaction.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Beneficiary" means (i) any beneficiary of the Trust while it is a
trust or (ii) any holders of the Equity Interests of a successor entity to the
Trust; provided that for any tax calculation or tax distribution herein, a
Beneficiary shall be any Person ultimately liable for the payment of taxes with
respect to the Trust's income.
"Board of Directors" means:
(1) either the board of directors, general partners or
managers of the Trust's Subsidiaries, or any duly authorized committee
thereof; or
(2) in the case of the Trust, the Special Advisor of the
Trust; provided that (a) in the event the Special Advisor's rights,
duties and powers are assumed by the Successor Special Advisor Group,
"Board of Directors" means the Successor Special Advisor Group of the
Trust and (b) in the case of a successor entity to Venture Holdings
Trust, "Board of Directors" means the board of directors, general
partners or managers of the successor entity.
"Business Day" means any day other than a Legal Holiday.
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<PAGE> 11
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation (other than non-voting
non-convertible Indebtedness) that confers on a Person the right to
receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, including, without limitation, the
beneficial interests of a trust.
"Cash Equivalents" means:
(1) cash;
(2) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof);
(3) time deposits and certificates of deposit and commercial
paper issued by the parent corporation of any domestic commercial bank
of recognized standing having capital and surplus in excess of $250
million;
(4) commercial paper issued by others rated at least A-1 or
the equivalent thereof by Standard & Poor's Corporation or at least P-1
or the equivalent thereof by Moody's Investors Service, Inc.;
(5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (1)
above entered into with any bank meeting the qualifications specified
in clause (3) above;
(6) any money market deposit accounts including those of the
Trustee issued or offered by a domestic commercial bank having capital
and surplus in excess of $250 million;
(7) investments in money market funds which invest
substantially all their assets in securities of the type described in
clauses (1), (2), (3) and (4) above and in the case of (1), (2) and (3)
maturing within one year after the date of acquisition.
"Cedel" means Cedel Bank, SA.
4
<PAGE> 12
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Trust and its Restricted Subsidiaries,
taken as a whole, to any "person" (as that term is used in Section
13(d)(3) of the Exchange Act) other than a Principal or a Related Party
of a Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Trust;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than the Principals and their
Related Parties, becomes the Beneficial Owner, directly or indirectly,
of more than 40% of the Capital Stock of the Trust or the total voting
power in the aggregate normally entitled to vote in the election of
directors, managers, or trustees, as applicable, of the transferee(s)
or surviving entity or entities, measured by voting power rather than
number of shares, but only if the Principals and their Related Parties
are the Beneficial Owners, directly or indirectly, of less than a
majority of the total voting power in the aggregate normally entitled
to vote in the election of directors, managers, or trustees, as
applicable, of the Trust or the transferee(s) or surviving entity or
entities, measured by voting power rather than number of shares; or
(4) during any period of 12 consecutive months after the Issue
Date, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of the Trust (together with any new
directors whose election by such Board or whose nomination for election
by the equity holders of the Trust, (A) with respect to Venture
Holdings Trust was made pursuant to the terms of the Venture Trust
Instrument, and (B) with respect to Venture Holdings Corporation or
another successor to the Trust, or their respective successors, after
the occurrence of a Trust Contribution, (x) was approved by the
Beneficiary(ies) of Venture Holdings Trust on or before the date of the
Trust Contribution, or (y) was approved by a majority of the directors
of the Trust whose appointment, election or nomination to the Board of
Directors was approved in accordance with the preceding clause (x) or
by this clause (y)) cease for any reason to constitute a majority of
the Board of Directors of the Trust then in office.
Notwithstanding anything in this definition to the contrary, a
"Change of Control" shall not be deemed to have occurred solely as a
result of a transaction pursuant to which the Trust is reorganized or
reconstituted as a corporation or a Trust Contribution occurs in
accordance with Section 5.01 hereof and no event which is otherwise a
"Change of Control" shall have occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
5
<PAGE> 13
(1) Michigan single business tax expense, to the extent
deducted in determining Consolidated Net Income; plus
(2) Trust Tax Distributions; plus
(3) provision for taxes based on income or profits of such
Person and their Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(4) consolidated interest expense of such Person and their
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(5) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period (calculated in
accordance with GAAP)) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period (calculated in
accordance with GAAP)) of such Person and their Restricted Subsidiaries
for such period to the extent that such depreciation, amortization and
other non-cash expenses were deducted in computing such Consolidated
Net Income.
Notwithstanding the preceding, the provision for taxes based
on the income or profits of, and the depreciation and amortization and
other non-cash charges of, a Restricted Subsidiary of the Trust
(collectively, the "Add-Backs") shall be added (without duplication) to
Consolidated Net Income to compute Consolidated Cash Flow only (1) in
the same proportion as the Net Income of such Restricted Subsidiary was
included in calculating the Consolidated Net Income of the Trust and
(2) only to the extent that such proportional amount of such Add-Backs
would be permitted at the date of determination to be dividended,
distributed or otherwise paid, directly or indirectly to the Trust by
such Restricted Subsidiary without prior approval (that has not been
obtained) and not in violation of the terms of its charter or any other
agreements, instruments, judgments, decrees, orders, statutes, rules
and governmental regulations applicable to that Restricted Subsidiary
or its stockholders and such dividend, distribution or other payment is
not subject to the right of any Person to the right of repayment,
avoidance, set off or similar right; provided that, if such dividend,
distribution or other payment does not meet such requirements at such
date, such Add-Backs shall be added to Consolidated Net Income to
compute Consolidated Cash Flow but only if such dividend, distribution
or other payment was actually made during the applicable period without
the required prior approval of any Person or governmental authority and
was not made in violation of such Restricted
6
<PAGE> 14
Subsidiary's charter or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders and such dividend,
distribution or other payment is not subject to the right of any Person
to the right of repayment, avoidance, set-off or similar right.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and their
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders; provided, that if such declaration or payment is not
permitted at such date, such Net Income shall nevertheless be included
if such declaration and payment were made during the applicable period
without the prior required approval of any Person or governmental
authority and were not made in violation of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental resolution applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(4) Trust Tax Distributions to the extent not already deducted
shall be excluded; and
(5) the cumulative effect of a change in accounting principles
shall be excluded.
In addition, solely for purposes of the covenant described
under Section 4.07 hereof, Consolidated Net Income shall include,
without duplication of amounts included above, (A) the amount of
dividends or other distributions paid in cash to the specified Person
or a Restricted Subsidiary thereof by an Unrestricted Subsidiary but
only to the extent of the Consolidated Net Income of such Unrestricted
Subsidiary for the period beginning on the first day of the fiscal
quarter commencing immediately after such Unrestricted Subsidiary
became an Unrestricted Subsidiary and ending on the last day of the
fiscal quarter for which financial statements are available immediately
preceding the date of such dividend or other distribution and (B) Net
Income of a Restricted Subsidiary earned by such Restricted Subsidiary
during the period beginning on the first day of the first fiscal
quarter commencing after the Issue Date and ending on the last day of
the Trust's fiscal quarter for which financial statements are available
immediately preceding
7
<PAGE> 15
the date of determination to the extent that (x) such Net Income was
previously excluded from Consolidated Net Income by reason of clause
(2) of this definition and (y) as of such date of determination, such
Restricted Subsidiary may declare and pay dividends or similar
distributions without any prior governmental approval (that has not
been obtained) and not in violation of its charter or any other
agreement, covenant, instrument, decree, order, statute, rule or
governmental regulating applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Worth" means, with respect to any specified Person as
of any date, the sum of:
(1) the consolidated equity of the holders of Capital Stock or
the trust principal of such Person and its consolidated Restricted
Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance
sheet as of such date with respect to any series of Preferred Stock
(other than Disqualified Stock) that by its terms is not entitled to
the payment of dividends unless such dividends may be declared and paid
only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person
upon issuance of such Preferred Stock.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Trust.
"Credit Agreement" means that certain Credit Agreement, dated as of May
27, 1999, by and among the Trust, the lenders referred to therein and The First
National Bank of Chicago, as agent, providing for up to $575 million of
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith from time to time,
and in each case as amended, modified, renewed, refunded, replaced or refinanced
from time to time, including, without limitation, any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder in a manner not in
violation of the Indenture) or adding Restricted Subsidiaries as additional
borrowers or guarantors thereunder.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement), commercial paper facilities or other
issues of debt securities, in each case with, or issued to, banks or other
institutional lenders (including QIBs or "accredited investors," as defined in
Rule 501(a) (1), (2), (3) or (7) under the Securities Act) providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables), letters of credit or other
evidences of indebtedness, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
8
<PAGE> 16
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock governed by this Indenture
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes hereunder mature.
Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Trust to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Trust may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of Capital Stock of the Trust for
cash.
"Euroclear" means Morgan Guaranty Trust of New York, Brussels office,
as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset which exceeds $15 million
or (ii) any condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such property or asset, or confiscation or requisition
of use of such property or asset, which impairs the value of such property or
asset in an amount exceeding $15 million as determined in good faith by the
Fairness Committee of the Trust.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
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<PAGE> 17
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Trust and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date, until such amounts are repaid.
"Fairness Committee" means a committee duly established pursuant to the
Venture Trust Instrument and the bylaws of each other Guarantor, Restricted
Subsidiary and any successor to Venture Holdings Trust without whose approval
(and without the approval of a majority of its Independent members) the Trust, a
Guarantor or a Restricted Subsidiary shall not be authorized to enter into any
transaction or take any action which pursuant to the terms of this Indenture
requires approval of the Fairness Committee.
"Fixed Charges" means, with respect to any specified Person and their
Restricted Subsidiaries for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and their
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and their
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or one of their Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of
their Restricted Subsidiaries, whether or not such Guarantee or Lien is
called upon; plus
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of Preferred Stock of such
Person or any of their Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of the Trust (other
than Disqualified Stock) or to the Trust or a Restricted Subsidiary of
the Trust, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person and its Restricted
Subsidiaries, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person and its Restricted Subsidiaries for any period, the ratio of the
Consolidated Cash Flow of such Person
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<PAGE> 18
for such period to the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, calculated on a Pro Forma Basis. In the event that
the specified Person or any of their Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems Preferred Stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving Pro Forma Effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of Preferred Stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable Reference Period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) Vemco, Inc., Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company, Venture Mold &
Engineering Corporation, Venture Service Company, Venture Europe, Inc., Venture
EU Corporation, Venture Holdings Company LLC and Experience Management LLC; and
(2) any other subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of the Indentures;
and their respective successors and assigns.
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"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements, interest rate exchange
agreements and currency exchange agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency or commodity
values, including, without limitation, any arrangement whereby,
directly or indirectly, such Person is entitled to receive from time to
time periodic payments calculated by applying either a fixed or
floating rate of interest on a stated notional amount in exchange for
periodic payments made by such Person calculated by applying a fixed or
floating rate of interest on the same notional amount.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, without duplication, with respect to any
specified Person, any indebtedness of such Person, whether or not contingent, in
respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of the specified Person prepared in accordance
with GAAP. In addition, the term "Indebtedness" includes all
Indebtedness of others secured by a Lien on any asset of the specified
Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
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(1) the accreted value thereof, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent" means, with respect to the Trust or any of its Restricted
Subsidiaries, a Person who would qualify as an "independent director" within the
meaning of the rules of the New York Stock Exchange and who (i) shall not
receive any payment or other fees for services to the Trust or any of its
Affiliates (other than for serving as a member of the Fairness Committee of the
Trust or of a Subsidiary of the Trust) and (ii) shall not be an Affiliate,
officer, member or employee of any firm, company or other entity that has
performed services for the Trust or any of its Affiliates during the proceeding
three fiscal years or that the Trust or any of its Affiliates proposes to have
perform services if the amount of compensation for such services during any
fiscal year exceeded or would exceed 5% of such firm's gross revenues during any
of its three preceding fiscal years.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $125.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means Banc One Capital Markets, Inc. and Goldman,
Sachs & Co.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, and is not also a QIB.
"Investments" means, without duplication, with respect to any Person,
all direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers, employees, independent contractors or other third parties
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Trust or any Restricted Subsidiary of
the Trust sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Trust such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Trust, the Trust shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof.
"Issue Date" means the date of the first issuance of the Notes under
this Indenture.
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<PAGE> 21
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Trust and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in (except in connection with any Qualified Receivables Transaction)
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction (except in
connection with any Qualified Receivables Transaction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 4 of the Registration Rights Agreement.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for
taxes on such gain or loss, realized in connection with: (a) any Asset
Sale; or (b) the disposition of any securities by such Person or any of
their Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of their Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash or Cash Equivalent proceeds
received by the Trust or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable
(including, without limitation, Trust Tax Distributions in respect thereof) as a
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, and amounts required to
be applied to the repayment of Indebtedness, other than Indebtedness under a
Credit Facility that is not expressly subordinated by its terms to any other
Indebtedness of the Trust or such Restricted Subsidiary, secured by a Lien on
the asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
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<PAGE> 22
(1) as to which neither the Trust nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender, other than, in each case,
pursuant to an Investment in an Unrestricted Subsidiary not in
violation of the Indenture;
(2) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or
both any holder of any other Indebtedness of the Trust or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness
or cause the payment thereof to be accelerated or payable prior to its
stated maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Trust or
any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness, in all cases whether now
outstanding or hereafter created, assumed or incurred in connection therewith
and including without limitation, interest accruing subsequent to the filing of
the petition in bankruptcy at the rate provided in the relevant document,
whether or not an allowed claim.
"Officer" means, with respect to any Person, the Manager, the General
Partner, the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary, or
any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Trust by two Officers of the Trust, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Trust, that meets the requirements of Section 11.05
hereof.
"Operating Expense or Cost Reduction" means, with respect to the
calculation of a Fixed Charge Coverage ratio on a Pro Forma Basis, an operating
expense or cost reduction with respect to an Acquisition, which, in the good
faith estimate of management, will be realized as a result of such Acquisition,
provided that the forgoing eliminations of operating expenses and realizations
of cost reductions shall be of the types permitted to be given effect to in
accordance with Article 11 of regulation S-X under the Exchange Act as in effect
on the Issue Date and such reduction is subject to negative comfort by the
Trust's independent public accountants.
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"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Trust, any
Subsidiary of the Trust or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to DTC, shall include Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Business" means the business conducted (or proposed to be
conducted) by the Trust and its Restricted Subsidiaries as of the Issue Date and
any and all businesses that in the good faith judgment of the Board of Directors
of the Trust are reasonably related businesses.
"Permitted Investments" means:
(1) any Investment in the Trust or in a Restricted Subsidiary
of the Trust;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Trust or any Restricted Subsidiary
of the Trust in a Person (other than a Receivables Subsidiary), if as a
result of such Investment:
(a) such Person becomes a Restricted Subsidiary of
the Trust; 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
Trust or a Restricted Subsidiary of the Trust;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under Section 4.11 hereof.
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Trust;
(6) Hedging Obligations;
(7) loans or advances to employees, officers, independent
contractors and other third parties of the Trust and its Restricted
Subsidiaries in the ordinary course of business for bona fide business
purposes;
(8) Investments in securities of trade creditors or customers
received pursuant to any plan or reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers;
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(9) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (9)
not to exceed $25 million; and
(10) the acquisition by a Receivables Subsidiary in connection
with a Qualified Receivables Transaction of Equity Interests of a trust
or other Person established by such Receivables Subsidiary to effect
such Qualified Receivables Transaction; and any other Investment by the
Trust or a Subsidiary of the Trust in a Receivables Subsidiary or any
Investment by a Receivables Subsidiary in any other Person, in
connection with a Qualified Receivables Transaction, provided that each
such other Investment is in the form of a note or other instrument that
the Receivables Subsidiary or other Person is required to repay as soon
as practicable from available cash collections less amounts required to
be established as reserves pursuant to contractual agreements with
entities that are not Affiliates of the Trust entered into as part of a
Qualified Receivables Transaction.
"Permitted Liens" means:
(1) Liens of the Trust and any Guarantor securing Indebtedness
and other Obligations under Credit Facilities that are not expressly
subordinated by their terms to any other Indebtedness of the Trust or
such Guarantor that was permitted by the terms of this Indenture to be
incurred;
(2) Liens in favor of the Trust or the Guarantors;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Trust or any
Restricted Subsidiary of the Trust; provided that such Liens were not
incurred in contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with the Trust or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition
thereof by the Trust or any Restricted Subsidiary of the Trust,
provided that such Liens were not incurred in contemplation of such
acquisition;
(5) Liens to secure the performance of bids, trade contracts
(other than advanced money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (5) of the second paragraph of Section
4.09 hereof covering only the assets acquired with such Indebtedness;
(7) Liens existing on the Issue Date;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly
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instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP
shall have been made therefor;
(9) statutory liens of carriers, warehousemen, mechanics,
materialmen, landlords, repairmen or other like Liens arising by
operation of law in the ordinary course of business, provided that (i)
the underlying obligations are not overdue for a period of more than 60
days, or (ii) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Trust in accordance with GAAP;
(10) easements, rights-of-way, zoning, similar restrictions
and other similar encumbrances or title defects which, singly or in the
aggregate, do not in any case materially detract from the value of the
property subject thereto (as such property is used by the Trust or any
of its Restricted Subsidiaries) or interfere with the ordinary conduct
of the business of the Trust or any of its Restricted Subsidiaries;
(11) Liens arising by operation of law in connection with
court orders and judgments, only to the extent, for an amount and for a
period not resulting in an Event of Default with respect thereto;
(12) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security legislation;
(13) Liens securing the Notes;
(14) leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct
of the business of the Trust or any of its Restricted Subsidiaries or
materially detracting from the value of the relative assets of the
Trust or any Restricted Subsidiary;
(15) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by
the Trust or any of its Subsidiaries in the ordinary course of
business;
(16) Liens securing Refinancing Indebtedness incurred to
refinance any Indebtedness that was previously so secured in a manner
no more adverse to the Holders of the Notes than the terms of the Liens
securing such refinanced Indebtedness, provided that the Indebtedness
secured is not increased and the lien is not extended to any additional
assets or property unless the Notes are equally and ratably secured by
such additional assets or the additional assets were acquired after the
Issue Date;
(17) additional Liens incurred in the ordinary course of
business of the Trust or any Subsidiary of the Trust with respect to
obligations that do not exceed $5.0 million at any one time
outstanding;
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(18) Liens on assets of a Restricted Subsidiary that is not a
Guarantor securing Indebtedness of such Restricted Subsidiary that was
permitted to be incurred under clause (14) of the second paragraph of
Section 4.09 hereof; and
(19) Liens on assets of a Receivables Subsidiary incurred in
connection with a Qualified Receivables Transaction.
"Permitted Preferred Stock" means any Preferred Stock of the Trust or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, amend, restate, refinance, renew, replace or refund
other Preferred Stock of the Trust or any of its Restricted Subsidiaries (other
than intercompany Preferred Stock); provided that:
(1) the liquidation preference of such Permitted Preferred
Stock does not exceed the liquidation preference of the Preferred Stock
so extended, refinanced, renewed, replaced or refunded (plus all
accrued dividends thereon and the amount of all expenses and premiums
incurred in connection therewith);
(2) such Permitted Preferred Stock has a final maturity date
(or redemption date, as applicable) later than the final maturity date
(or redemption date, as applicable) of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Preferred Stock being extended, refinanced, renewed,
replaced, or refunded;
(3) if the Preferred Stock being extended, refinanced,
renewed, replaced, defeased or refunded is Disqualified Stock, such
Permitted Preferred Stock has a redemption, maturity, repurchase or
other required payment (other than dividend payments) no earlier than
the earliest redemption, maturity, repurchase or other required payment
(other than dividend payments) of the Preferred Stock being extended,
refinanced, renewed, replaced, defeased or refunded;
(4) such Preferred Stock is issued either by the Trust or by
the Subsidiary who is the issuer on the Preferred Stock being extended,
refinanced, renewed, replaced, or refunded; and
(5) Permitted Preferred Stock constituting Disqualified Stock
may only be issued if the Preferred Stock being extended, refinanced,
renewed, replaced or refunded constitutes Disqualified Stock.
"Permitted Refinancing Indebtedness" means any Indebtedness or
Preferred Stock (other than Disqualified Stock) of the Trust or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, amend, restate, refinance, renew, replace, defease or refund
other Indebtedness of the Trust or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value or liquidation
preference, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount (or accreted value, if applicable)
of the Indebtedness so extended, refinanced, renewed,
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replaced, defeased or refunded (plus all accrued interest thereon and
the amount of all expenses and premiums incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the
Holders of the Notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(4) such Indebtedness is incurred or such Preferred Stock is
issued either by the Trust or by the Subsidiary who is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, or government or other entity.
"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 or any other payments of such
Person over the holders of other Capital Stock issued by such Person.
"Principals" means Larry J. Winget.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Pro Forma Basis" or "Pro Forma Effect" means, for purposes of
calculating the Fixed Charge Coverage Ratio, giving pro forma effect to certain
transactions such that:
(1) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Calculation
Date shall be assumed to have occurred on the first day of the
Reference Period and any Operating Expense or Cost Reduction with
respect to such Acquisition shall be deducted from such calculation;
(2) transactions giving rise to the need to calculate the
Fixed Charge Coverage Ratio shall be assumed to have occurred on the
first day of the Reference Period;
(3) the incurrence of any Indebtedness or issuance of any
Disqualified Stock during the Reference Period or subsequent to the
Reference Period and on or prior to the
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Calculation Date (and the application of the proceeds therefrom,
including to refinance or retire other Indebtedness) shall be assumed
to have occurred on the first day of such Reference Period (except
that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based on the average daily
balance during the Reference Period);
(4) the Fixed Charges of such Person attributable to interest
on any Indebtedness or dividends on any Disqualified Stock bearing a
floating interest (or dividend) rate shall be computed on a Pro Forma
Basis as if the average rate in effect from the beginning of the
Reference Period to the Calculation Date had been the applicable rate
for the entire period, unless such Person or any of its Restricted
Subsidiaries is a party to a Hedging Obligation (which shall remain in
effect for the 12-month period immediately following the Calculation
Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be
used;
(5) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be
excluded; and
(6) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date.
"QIB" means a "Qualified Institutional Buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Trust or any of its Subsidiaries pursuant to
which the Trust or any of its Subsidiaries sells, conveys or otherwise transfers
to (i) a Receivables Subsidiary (in the case of a transfer by the Trust or any
of its Subsidiaries) and (ii) any other Person (in the case of a transfer by a
Receivables Subsidiary), or grants a security interest in, any Receivables,
whether now existing or arising in the future, of the Trust or any of its
Subsidiaries.
"Receivables Debt" means Indebtedness (i) as to which neither the Trust
nor any of its Subsidiaries (other than the Receivables Subsidiary) (a) provides
any credit support that would constitute Indebtedness or (b) is directly or
indirectly liable (as a guarantor or otherwise); and (ii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of any of the Trust or any of its Subsidiaries (other than
the Receivables Subsidiary); provided that, notwithstanding the foregoing, the
Trust and any of its Subsidiaries that sell Receivables to the Receivables
Subsidiary shall be allowed to provide such representations, warranties,
covenants and indemnities as are customarily required in such transactions so
long as no such representations, warranties, covenants or indemnities constitute
a Guarantee of payment or recourse against credit losses.
"Receivables" means accounts receivable and all other assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all
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guarantees or other obligations in respect of such accounts receivable, proceeds
of such accounts receivable and all other assets that are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts receivable.
"Receivables Facility" means one or more receivables financing
facilities, as amended from time to time, pursuant to which the Trust or any of
its Subsidiaries sells its accounts receivable to a Receivables Subsidiary.
"Receivables Subsidiary" means a Subsidiary of the Trust, created
primarily to purchase or finance the receivables of the Trust and/or its
Subsidiaries pursuant to a Receivables Facility, so long as it: (a) has no
Indebtedness other than Receivables Debt; (b) is not party to any agreement,
contract, arrangement or understanding with any of the Trust or any other
Subsidiary of the Trust unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Trust or such
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of any of the Trust or a Guarantor; (c) is a Person with respect
to which neither the Trust nor any of its Subsidiaries has any direct obligation
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and (d) has not
Guaranteed or otherwise directly provided credit support for any Indebtedness of
any of the Trust or any of its Subsidiaries. Notwithstanding the foregoing, the
Trust and the Guarantors may make capital contributions in the form of
Receivables transferred to the Receivables Subsidiary for non-cash consideration
to the extent necessary or desirable to prevent a disruption of purchases of
Receivables or to avoid a default under the Receivables Facility. If, at any
time, such Receivables Subsidiary would fail to meet the foregoing requirements
as a Receivables Subsidiary, it shall thereafter cease to be a Receivables
Subsidiary for purposes of this Indenture and any Indebtedness of such
Receivables Subsidiary shall be deemed to be incurred by a Subsidiary of the
Trust as of such date (and, if such Indebtedness is not permitted to be incurred
as of such date under Section 4.09 hereof, the Trust shall be in default of such
provision).
"Reference Period" with regard to any Person means the four full fiscal
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Notes or this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Trust and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time, and, with respect to any Additional Notes, one or more registration
rights agreements between the Trust and the other parties thereto, as such
agreement(s) may be amended, modified or supplemented from time to time,
relating to rights given by the Trust to the purchasers of Additional Notes to
register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Permanent Global Note
in the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend.
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"Related Party" means Larry J. Winget's estate or legal representative,
members of his immediate family and all lineal descendants of Larry J. Winget
and all spouses of such lineal descendants (or any trust(s) or entity(ies) whose
sole beneficiaries or holders of Equity Interests, or the holders of a majority
of the outstanding Voting Stock are any one or more of the foregoing).
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer or other employee to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration" means the Shelf Registration as defined in the
Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
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"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such Person
or one or more Subsidiaries of such Person (or any combination
thereof).
"Subsidiary Guarantee" means a Guarantee by a Subsidiary on a senior
basis of the Trust's payment obligations under the Notes and this Indenture in
the form attached hereto as Exhibit E.
"Tax Distribution Amount" means, in respect of any period after the
Issue Date during which the Trust is a Pass-Through Entity for federal income
tax purposes, an amount, determined in good faith by the Trust's independent
public accountants, which shall be a nationally recognized accounting firm,
equal to the sum of (x) the amount of intangibles tax actually imposed on each
Beneficiary of the Trust in respect of Trust Tax Distributions for such period
and (y) (a) the sum of the highest marginal federal income tax rate and highest
state and local income tax rate applicable to a Beneficiary of the Trust on
income of the Investee Companies which are Pass-Through Entities for federal,
state or local income tax purposes for such period, expressed as a percentage,
multiplied by (b) such Investee Companies' taxable income for such period
computed taking into account, without limitation, the deduction for single
business and franchise tax actually imposed on such Investee Companies; provided
that (i) the foregoing shall be determined by giving effect to the deduction of
relevant state and local income and intangibles taxes for purposes of
determining federal income taxes, such deduction to be computed based on the
state and local income tax rates applicable in clause (y) (a) hereof and the
amount of intangibles tax determined under clause (x) hereof, and (ii) the
foregoing shall be appropriately reduced by the amount of cumulative tax losses
of such Investee Companies from any previous period (to the extent not
previously utilized in computing the Tax Distribution Amounts) since the Issue
Date and any investment tax credits and other tax credits of such Investee
Companies since the Issue Date.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trust" means (1) Venture Holdings Trust, a trust organized under the
laws of the State of Michigan, (2) Venture Holdings Corporation (after the
occurrence of a Trust Contribution) or (3) any successor Person to Venture
Holdings Trust or Venture Holdings Corporation (after the occurrence of a Trust
Contribution) in accordance with Section 5.01 hereof.
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<PAGE> 32
"Trustee" means the party named as such in the recitals hereto until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Trust that is
designated by the Board of Directors of the Trust as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Trust or any Restricted Subsidiary of the Trust
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Trust or such Restricted
Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Trust;
(3) is a Person with respect to which neither the Trust nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results other than
an Investment made in such Subsidiary not in violation of the
Indenture; and
(4) is not guaranteeing or otherwise directly or indirectly
providing credit support for any Indebtedness of the Trust or any of
its Restricted Subsidiaries.
Any designation of a Subsidiary of the Trust as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing
with the Trustee a certified copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the preceding conditions and was permitted by
the covenant described above under Section 4.07 hereof. If, at any
time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Trust as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under the
covenant described under Section 4.09 hereof, the Trust shall be in
default of such covenant. The Board of Directors of the Trust may at
any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted
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<PAGE> 33
Subsidiary of the Trust of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if
(1) such Indebtedness is permitted under Section 4.09 hereof calculated
on a Pro Forma Basis as if such designation had occurred at the
beginning of the Reference Period; and (2) no Default or Event of
Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"Venture Trust Instrument" means the Agreement, dated December 28,
1987, as amended and restated on February 16, 1994, as amended, among Larry J.
Winget, as Trustee, and Larry J. Winget, as Settlor, Beneficiary and Special
Advisor, as such agreement may be amended in accordance with the terms of this
Indenture.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Preferred Stock at any date, the number of years obtained by
dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, or liquidation
preference, as applicable, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount, or liquidation
preference, as applicable, of such Indebtedness or Preferred Stock, as
the case may be, of such Indebtedness.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined
in
Term Section
---- -------
<S> <C>
"Acceleration Notice"........................................................... 6.02
"Actual Tax Amount"............................................................. 4.07
"Add-Backs"..................................................................... 1.01
"Affiliate Transaction"......................................................... 4.12
"Asset Sale Offer".............................................................. 3.09
"Authentication Order".......................................................... 2.02
"Business Opportunity" ......................................................... 4.21
"Change of Control Offer"....................................................... 4.16
"Change of Control Payment"..................................................... 4.16
"Change of Control Payment Date"................................................ 4.16
"Commencement Date"............................................................. 4.07
"Covenant Defeasance"........................................................... 8.03
"Distributed Amounts"........................................................... 4.07
</TABLE>
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<TABLE>
<CAPTION>
Defined
in
Term Section
---- -------
<S> <C>
"DTC"........................................................................... 2.03
"Entity-in-Issue" .............................................................. 4.07
"Event of Default".............................................................. 6.01
"Excess Proceeds"............................................................... 4.11
"incur"......................................................................... 4.09
"Investee Companies" ........................................................... 4.04
"Legal Defeasance".............................................................. 8.02
"Offer Amount".................................................................. 3.09
"Offer Period".................................................................. 3.09
"Pass-Through Entity" .......................................................... 4.04
"Paying Agent".................................................................. 2.03
"Payment Default"............................................................... 6.01
"Permitted Debt"................................................................ 4.09
"Purchase Date"................................................................. 3.09
"Registrar"..................................................................... 2.03
"Restricted Payments"........................................................... 4.07
"Tax Income" ................................................................... 4.07
"Trust Contribution"............................................................ 5.01
"Trust Tax Distributions" ...................................................... 4.04
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Trust
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
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Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Trust, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
hereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes
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<PAGE> 36
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Permanent Global Notes that are held by
Participants through Euroclear or Cedel Bank.
Section 2.02. Execution and Authentication.
An Officer shall sign the Notes for the Trust by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture. The Trustee shall, upon a written order
of the Trust signed by one Officer (an "Authentication Order"), authenticate
Notes for original issue up to the aggregate principal amount stated in
paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at
any time may not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Trust.
Section 2.03. Registrar and Paying Agent.
The Trust shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Trust may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Trust may change any
Paying Agent or Registrar without notice to any Holder. The Trust shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Trust fails to appoint or maintain another entity as Registrar
or Paying Agent, the Trustee shall act as such. The Trust or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Trust initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Trust initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
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Section 2.04. Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Trust in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Trust at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Trust or a Subsidiary) shall have
no further liability for the money. If the Trust or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Trust, the Trustee shall serve as
Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Trust shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Trust shall otherwise comply with TIA ss. 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Trust for Definitive Notes if (i) the Trust delivers to the Trustee notice
from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Trust within 120 days after the date of such notice from the Depositary or (ii)
the Trust in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06, Section
2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and
shall be, a Global Note. A Global Note may not be exchanged for another Note
other than as provided in this Section 2.06(a), however, beneficial interests in
a Global Note may be transferred and exchanged as provided in Section 2.06(b),
(c) or (f) hereof.
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(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same
Global Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order
from a Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in
(1) above. Upon consummation of an Exchange Offer by the Trust in
accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter
of Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any Restricted Global
Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(ii) above
and the Registrar receives the following:
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(A) if the transferee will take delivery in
the form of a beneficial interest in the 144A Global Note,
then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item
(1) thereof;
(B) if the transferee will take delivery in
the form of a beneficial interest in the Regulation S Global
Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transferee will take delivery in
the form of a beneficial interest in the IAI Global Note,
then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications and
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in
a Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may
be exchanged by any Holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder of the
beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Trust;
(B) such transfer is effected pursuant to
the Shelf Registration in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof; or
(2) if the Holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to
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a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global
Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note has not yet been issued, the Trust shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the aggregate principal amount
of beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes
to Restricted Definitive Notes. If any Holder of a beneficial interest
in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Note, then, upon receipt by the Registrar
of the following documentation:
(A) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance
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with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Trust or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Trust shall execute and the
Trustee shall authenticate and deliver to the Person designated
in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in
such authorized denomination or denominations as the Holder of
such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall
bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A Holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not
(1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Trust;
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(B) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the Holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such Holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global
Notes to Unrestricted Definitive Notes. If any Holder of a beneficial
interest in an Unrestricted Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Trust shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination
or denominations as the Holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
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(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred
to the Trust or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase
or cause to be increased the aggregate principal amount of, in
the case of clause (A) above, the appropriate Restricted Global
Note, in the case of clause (B) above, the 144A Global Note, in
the case of clause (C) above, the Regulation S Global Note, and
in all other cases, the IAI Global Note.
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<PAGE> 44
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Trust;
(B) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications
in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such
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<PAGE> 45
Definitive Notes to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and increase
or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time
when an Unrestricted Global Note has not yet been issued, the Trust shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted
Definitive Notes. Any Restricted Definitive Note may be transferred to
and registered in the name of Persons who take delivery thereof in the
form of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
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(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Trust;
(B) any such transfer is effected pursuant to the
Shelf Registration in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item
(1)(d) thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Trust to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the
Unrestricted Definitive Notes pursuant to the instructions from the
Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Trust shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in
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Rule 144) of the Trust, and accepted for exchange in the Exchange Offer and (ii)
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Trust shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF
ANY, REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT PRIOR TO SUCH
TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES A LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THE NOTES),
(C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (D) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (E) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON CERTIFICATES AND
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AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), AS LONG AS THE REGISTRAR
RECEIVES A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTION SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
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(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Trust's order or at the Registrar's
request.
(ii) No service charge shall be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Trust may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.11, 4.16
and 9.05 hereof).
(iii) The Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part.
(iv) All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes or
Definitive Notes shall be the valid obligations of the Trust,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon
such registration of transfer or exchange.
(v) The Trust shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between
an interest payment record date and the next succeeding interest
payment date.
(vi) Prior to due presentment for the registration of
a transfer of any Note, the Trustee, any Agent and the Trust may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Trust shall be affected by notice
to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Trust and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Trust shall issue and
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the Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Trust, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Trust to protect the Trust,
the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Trust may charge for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Trust and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Trust or an Affiliate of the
Trust holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Trust, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that
date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Trust, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Trust, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Trust
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Trust considers
appropriate for temporary Notes and as shall be reasonably acceptable to
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the Trustee. Without unreasonable delay, the Trust shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Trust at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Trust. The Trust may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Trust defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Trust shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Trust shall fix or cause to be fixed each such special
record date and payment date, provided that no such special record date shall be
less than 10 days prior to the related payment date for such defaulted interest.
At least 15 days before the special record date, the Trust (or, upon the written
request of the Trust, the Trustee in the name and at the expense of the Trust)
shall mail or cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be
paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT AND SATISFACTION AND DISCHARGE
Section 3.01. Notices to Trustee.
If the Trust elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes issued under this Indenture are to be
redeemed at any time, the Trustee shall select Notes for redemption as follows:
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(1) if the Notes are listed, in compliance with the requirements
of the principal national securities exchange on which the Notes are
listed; or
(2) if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate.
In the event of partial redemption by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption. The Trustee shall
promptly notify the Trust in writing of the Notes selected for redemption and,
in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes selected shall be in amounts
of $1,000 or whole multiples of $1,000; except that if all of the Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Trust shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note in principal amount equal to
the unredeemed portion of the original Note shall be issued in the name of
the Holder thereof upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Trust defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
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At the Trust's request, the Trustee shall give the notice of
redemption in the Trust's name and at its expense; provided, however, that
the Trust shall have delivered to the Trustee, at least 45 days prior to
the redemption date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to a redemption date, the Trust shall deposit
immediately available funds with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date. The Trustee or the Paying Agent shall promptly return
to the Trust any money deposited with the Trustee or the Paying Agent by the
Trust in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
If the Trust complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Trust to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Trust shall
issue and, upon the Trust's written request, the Trustee shall authenticate for
the Holder at the expense of the Trust a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in Section 3.07(b), the Trust shall not have
the option to redeem the Notes pursuant to this Section 3.07 prior to June 1,
2003. Thereafter, the Notes will be subject to redemption at any time at the
option of the Trust, in whole or in part, upon not less than 30 nor more than 60
days' written notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on June 1st of the years
indicated below:
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<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003 105.500%
2004 103.667%
2005 101.833%
2006 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of Section 3.07(a), at any time on
or before June 1, 2002, the Trust may redeem up to 35% of the aggregate
principal amount of Notes originally issued under this Indenture at a redemption
price equal to 111.000% of the aggregate principal amount thereof plus accrued
and unpaid interest and Liquidated Damages thereon, if any to the redemption
date, with the net cash proceeds from a public Equity Offering; provided that:
(1) at least 65% in aggregate principal amount of each of the
Notes originally issued remain outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Trust and
its Subsidiaries); and
(2) such redemption shall occur within 120 days of the date of
the closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Trust shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.11 hereof, the Trust shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
ten Business Days after the termination of the Offer Period (the "Purchase
Date"), the Trust shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.11 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
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Upon the commencement of an Asset Sale Offer, the Trust shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.11 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Trust defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Trust, a depositary, if appointed by the
Trust, or a Paying Agent at the address specified in the notice at least three
days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Trust, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trust shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trust so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Trust shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Trust in accordance with the
terms of this
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Section 3.09. The Trust, the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Trust for
purchase, and the Trust shall promptly issue a new Note, and the Trustee, upon
written request from the Trust shall authenticate and mail or deliver such new
Note to such Holder, in a principal amount equal to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Trust to the Holder thereof. The Trust shall publicly announce
the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
Section 3.10 Satisfaction and Discharge
This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated hereunder (except lost,
stolen or destroyed Notes that have been replaced or paid) have been delivered
to the Trustee for cancellation; or
(b) all Notes authenticated under this Indenture that have not been
delivered to the Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will become due and
payable within one year and the Trust or any Guarantor has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on such Notes not delivered to the Trustee for cancellation
for principal, premium and Liquidated Damages, if any, and accrued interest to
the date of maturity or redemption;
(2) no Default or Event of Default under Article 6 hereof shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit shall not result in a breach or
violation of, or constitute a default under, any other instrument to which
the Trust or any Guarantor is a party or by which the Trust or any Guarantor
is bound;
(3) the Trust or the Guarantors have paid or caused to be paid all
sums payable by them under this Indenture; and
(4) the Trust has delivered irrevocable instructions to the Trustee
under the relevant Indenture to apply the deposited money toward the payment
of such Notes at maturity or the redemption date or upon delivery for
cancellation, as the case may be.
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In addition, the Trust must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Trust shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Trust or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Trust
in immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Trust shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Trust shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on such payment for the
intervening period.
Section 4.02. Maintenance of Office or Agency.
The Trust shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an agent of
the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Trust in respect of the Notes and this Indenture may be served. The
Trust 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 Trust shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Trust may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Trust of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Trust shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Trust hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Trust in accordance with Section 2.03.
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Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Trust shall furnish to the Holders of
Notes, within fifteen days after the time periods specified in the SEC's rule
and regulations:
(1) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Trust were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report thereon by the Trust's certified independent
accountants; and
(2) all current reports that would be required to be filed
with the SEC on Form 8-K if the Trust were required to file such
reports. In addition, following consummation of the Exchange Offer,
whether or not required by the rules and regulations of the SEC, the
Trust shall file a copy of all such information and reports with the
SEC for public availability within the time periods specified in the
SEC's rules and regulations (unless the SEC shall not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. The Trust shall at all times comply
with TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, the Trust and the
Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
If the Trust has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Trust
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Trust.
Section 4.04. Compliance Certificate.
(a) The Trust and any Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Trust and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Trust has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Trust has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Trust 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
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reason of which payments on account of the principal of or interest, if any, on
the Notes is prohibited or if such event has occurred, a description of the
event and what action the Trust is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) shall be accompanied by a
written statement of the Trust's independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Trust has violated any
provisions of Sections 4.07, 4.09, 4.10 and 4.11 hereof, but only with respect
to financial and accounting matters at year end, or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Trust shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Trust is taking or proposes to take with respect
thereto.
Section 4.05. Taxes.
The Trust shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Trust and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Trust and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Trust's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation
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involving the Trust or any of its Restricted Subsidiaries), or to the
direct or indirect holders of the Trust's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Trust or to the Trust or a Restricted
Subsidiary of the Trust);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Trust) any Equity Interests of the Trust or
any direct or indirect parent of the Trust;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Subsidiary
Guarantees, except a payment of interest or principal at the Stated
Maturity thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in clauses (1) through (4) above being
collectively referred to as "Restricted Payments");
unless, at the time of and after giving effect to such Restricted
Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(2) the Trust would, at the time of such Restricted Payment
and after giving Pro Forma Effect thereto as if such Restricted Payment
had been made at the beginning of the applicable Reference Period, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Trust and its
Restricted Subsidiaries after the Issue Date, excluding Restricted
Payments permitted by clauses (2), (3), (4), (5) and (6) of the next
succeeding paragraph, is less than the sum, without duplication, of:
(a) $20 million; plus
(b) 50% of the Consolidated Net Income of the Trust
for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the
Issue Date to the end of the Trust's most recently ended
fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less
100% of such deficit); plus
(c) 100% of the aggregate net cash proceeds received
by the Trust since the Issue Date as a contribution to its
common equity capital or from the issue or sale of Equity
Interests of the Trust (other than Disqualified Stock) or from
the issue or sale of convertible or exchangeable Disqualified
Stock or
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convertible or exchangeable debt securities of the Trust that
have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock
or debt securities) sold to a Subsidiary of the Trust); plus
(d) to the extent that any Restricted Investment that
was made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash
return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (ii) the initial
amount of such Restricted Investment; plus
(e) in the event that any Unrestricted Subsidiary is
designated as a Restricted Subsidiary in accordance with the
provisions of this Indenture, the lesser of (i) the aggregate
fair market value of all outstanding Investments owned by the
Trust and its Restricted Subsidiaries in such Subsidiary at
the time of such designation or (ii) the aggregate amount of
Restricted Investments made in such Unrestricted Subsidiary
since the Issue Date.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the Trust or any
Guarantor or of any Equity Interests of the Trust in exchange for, or
out of the net cash proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Trust) of, Equity Interests of the
Trust (other than Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (3) (c) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other
acquisition of Indebtedness of the Trust or any Guarantor with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend or other distribution by a
Subsidiary of the Trust to the holders of its Equity Interests on a pro
rata basis;
(5) (a) so long as the Trust is treated for federal, state or
local tax purposes as an entity described in Section 1361(c)(2),
1361(d) or 1361(e) of the Code, an S Corporation, a partnership or an
entity that is disregarded as an entity separate from its owner(s)
(each a "Pass-Through Entity"), the Trust shall be permitted to
distribute to the Beneficiary(ies) of the Trust (or pay compensation to
the Beneficiary(ies) of the Trust in lieu of such distributions) all
amounts distributed to the Trust by Subsidiaries or other Persons in
which the Trust has a direct investment (collectively, "Investee
Companies")
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in cash as described below, calculated before giving effect to such
payments (such payments to be referred to hereinafter as "Trust Tax
Distributions"):
(1) on (or within 15 days prior to) each April 15,
June 15, September 15 and January 15 an amount not to exceed
the minimum federal and state estimated quarterly income and
intangible tax payments required to be made on such date by
each Beneficiary of the Trust in order to prevent underpayment
of each such Beneficiary's estimated income tax pursuant to
the rules set forth in Section 6654(b) and 6654(d)(1) of the
Code, or their successors or supplements, and any similar
provision of applicable state income and intangible tax law
for any state with respect to which the Investee Companies
qualify as Pass-Through Entities for state law purposes, such
amount to be calculated as though each such Beneficiary's only
income and loss in each such quarter relating to a required
estimated payment was an amount equal to the sum of the
taxable income and loss of the Investee Companies which are
Pass-Through Entities. The foregoing amounts may be paid so
long as (I) each such Investee Company is and was a
Pass-Through Entity for such quarter, as provided in the Code
or the Treasury Regulations promulgated thereunder, (II) no
Default or Event of Default exists and is continuing or would
thereby occur, (III) special tax counsel to the Trust delivers
to the Trustee, prior to the payment in respect of such
quarter, an opinion substantially in the form attached hereto
as Exhibit G regarding the classification of the Trust and
each such Investee Company as a Pass-Through Entity for
federal income tax purposes (or, if Larry J. Winget is
disabled or unavailable as described in the Venture Trust
Instrument, such special tax counsel delivers to the Trustee,
prior to the payment in respect of such quarter, an opinion
substantially in the form attached hereto as Exhibit G), (IV)
the Trust has not received a private ruling or a National
Office Technical Advice Memorandum from the Internal Revenue
Service or, in respect of distributions made for state income
tax purposes, a similar ruling from any applicable state or
local taxing authority, that the Trust is not a Pass-Through
Entity, or there has been a final "determination" (as used in
Section 1313 of the Code) or similar state determination to
the same effect, and (V) the Trust and its Investee Companies
have complied with the terms of clauses (b), (c) and (d)
below. The amount that is distributable pursuant to this
clause (5)(a) by each Investee Company which is a Pass-Through
Entity in respect of each of the quarters described above
shall be that proportion of the amount of the Trust Tax
Distribution for each such quarter which such Investee
Company's Tax Income for such quarter bears to the aggregate
Tax Income of all the Investee Companies which are
Pass-Through Entities in such quarter. For purposes of the
foregoing, "Tax Income" shall mean one-quarter of an Investee
Company's actual taxable income for the year prior to that
with respect to which the calculations described above are
being made. For purposes hereof, any references herein to the
taxable income or loss of a Pass-Through Entity that is
disregarded as an entity separate from its owner for tax
purposes shall mean the taxable income or loss of such
Pass-Through Entity as if it was a pass-through corporation
which was not disregarded as a separate entity for tax
purposes; and
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(2) no later than September 15 of each year, the
Trust shall cause its tax advisors, which shall be a
nationally recognized accounting firm, to determine the actual
amount of federal and state income tax liability of each
Beneficiary of the Trust for the previous calendar year
computed as if the only income and loss of each such
Beneficiary in such year was an amount equal to the sum of the
taxable income and loss of the Investee Companies which are
Pass-Through Entities (the "Actual Tax Amount"). If (A) the
Actual Tax Amount, as determined by such tax advisor, is less
than the aggregate estimated amounts paid pursuant to clause
(1) above in respect of such year (the "Distributed Amounts")
and/or (B) if the Actual Tax Amount is at any time finally
determined by the Internal Revenue Service or a court of
competent jurisdiction to be less than that determined by such
tax advisors, the Trust shall cause the Beneficiary(ies) of
the Trust, within 75 days after such difference is determined,
to reimburse to the Trust, with no obligation on the part of
the Trust to each such Beneficiary with respect to such
reimbursement, the excess of the Distributed Amounts over the
Actual Tax Amount, as finally determined by the tax advisors,
the Internal Revenue Service or court of competent
jurisdiction, as the case may be, or the excess of the Actual
Tax Amount, as determined by the tax advisors, over the Actual
Tax Amount as determined by the Internal Revenue Service or
court, as the case may be (in either case, which excess amount
may be offset by any amounts then or subsequently owed to each
such Beneficiary by reason of clause (1) above). If the excess
of the Distributed Amounts over the Actual Tax Amount, as
finally determined by the tax advisors, is reimbursed to the
Trust after June 14 of such year, such excess shall bear
interest from June 15 to the date preceding the date it is
paid to the Trust at an interest rate equal to the overpayment
rate established under Section 6621(a)(1) of the Code or its
successor and supplements. If the Actual Tax Amount, as
determined by the tax advisors, the Internal Revenue Service
or court, as the case may be, is greater than the Distributed
Amounts, each of the Investee Companies which are Pass-Through
Entities shall distribute to the Trust (and the Trust shall
then distribute to its Beneficiary(ies)) its share of the
excess of the Actual Amount over the Distributed Amounts,
within 75 days after such difference is determined. If any
payment is made (i) in contravention of clause (1) above and
paid to the Beneficiary(ies) of the Trust pursuant to this
clause(5)(a) or (ii) in contravention of the limitations
contained in the immediately preceding sentence and paid to
the Beneficiary(ies) of the Trust pursuant to the immediately
preceding sentence, the Trust shall cause the Beneficiary(ies)
of the Trust to reimburse to each of the Investee Companies
making such prohibited payment the amount of such prohibited
payment;
(b) in the event of the death, disability or unavailability of
Larry J. Winget as provided in the Venture Trust Instrument (such date,
a "Commencement Date"), the Trust shall notify the Trustee of the
occurrence of such Commencement Date no later than 10 days following
such date and shall apply for a private ruling from the Internal
Revenue Service to the effect that (1) each of the Investee Companies
which was a Pass-Through Entity immediately prior to such death,
disability or unavailability, as the case
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may be, qualifies, despite such death, disability or unavailability, as
a Pass-Through Entity and (2) the Trust qualifies as a Pass-Through
Entity;
(c) if at any time the Trust or an Investee Company receives
notification from the Internal Revenue Service that any Investee
Company does not qualify as a Pass-Through Entity (x) no further
distributions shall be made pursuant to clause (a)(1) above by such
Investee Company, and (y) the Trust shall cause the Beneficiary(ies) of
the Trust either (A) to reimburse the Trust all amounts paid by that
Investee Company pursuant to clause (a)(1) and clause (a)(2) above with
respect to all periods as to which that Investee Company did not
qualify as a Pass-Through Entity, with no obligation on the part of the
Trust to any such Beneficiary with respect to such reimbursement, and
the Trust shall then pay such reimbursement to that Investee Company,
or (B) to reimburse such Investee Company such payments directly,
within 75 days after such requirement for reimbursement is determined;
provided that no such reimbursement shall be required to the extent to
which such distribution would otherwise have been permitted, after
taking into account interest, penalties and additions to tax imposed on
such Investee Company as a result of its failure to qualify as a
Pass-Through Entity. If the Trust or any Investee Company at any time
receives notification from the Internal Revenue Service that the Trust
is not a Pass-Through Entity or if the Trust or the Investee Companies
fail to receive a favorable response to a ruling request described in
clause (b) within 360 days after the Commencement Date with respect to
the status of the Trust or any Investee Company as a Pass-Through
Entity (in either the case of a notification or a response to a ruling
request, the "Entity-in-Issue") the Trust shall, and shall cause its
Beneficiaries to, take the actions described in clauses (x) and (y) of
the preceding sentence with respect to the Entity-in-Issue (unless such
Internal Revenue Service response indicates that the Internal Revenue
Service is not ruling as to those issues and the Trust has obtained a
favorable opinion of independent tax counsel that the Entity-in-Issue
is a Pass-Through Entity); and
(d) no Trust Tax Distribution may be made to the extent such
distribution would cause the aggregate cumulative amount of Trust Tax
Distributions to exceed the aggregate cumulative Tax Distribution
Amounts for periods completed after the Issue Date; and
(6) repurchases of subordinated Indebtedness with the proceeds
of Asset Sales to the extent that (a) such proceeds have been offered
to Holders of the Notes pursuant to an Asset Sale Offer, (b) such
holders declined to participate in such Asset Sale Offer, and (c) the
Trust is required to offer to repurchase or redeem such subordinated
Indebtedness with such Asset Sale Proceeds.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued to or by
the Trust or such Restricted Subsidiary, as the case may be, pursuant
to the Restricted Payment. The fair market value of any assets or
securities that are required to be valued by this covenant shall be
determined by the relevant Fairness Committee whose resolution with
respect thereto shall be delivered to the Trustee. The
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Fairness Committee's determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm
of national standing if the fair market value exceeds $10.0 million.
Not later than the date of making any Restricted Payment, the Trust
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which
the calculations required by this Section 4.07 were computed, together
with a copy of any fairness opinion or appraisal required by this
Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Trust or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any Indebtedness owed to the Trust or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Trust or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the Trust or
any of its Restricted Subsidiaries.
However, the preceding restrictions shall not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the Issue Date and
any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing
Indebtedness, as in effect on the Issue Date;
(2) Credit Facilities, provided that such Credit Facilities
are no more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in the
Credit Agreement as in effect on the Issue Date;
(3) this Indenture, the Notes and the Subsidiary Guarantees;
(4) applicable law;
(5) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Trust or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than
the Person, or the
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property or assets of the Person, so acquired, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(6) customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of the preceding
paragraph;
(8) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(9) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(10) Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien;
(11) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, assets
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(12) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business; and
(13) Indebtedness or other contractual requirements of a
Receivables Subsidiary in connection with a Qualified Receivables
Transaction, provided that such restrictions apply only to such
Receivables Subsidiary; and
(14) Indebtedness incurred by a Restricted Subsidiary that is
not a Guarantor in compliance with Section 4.10 hereof.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Trust shall not issue any Disqualified Stock and shall not permit
any of its Restricted Subsidiaries to issue any shares of Preferred Stock;
provided, however, that the Trust may incur Indebtedness (including Acquired
Debt) and issue Disqualified Stock, and the Trust and the Guarantors may incur
Indebtedness and issue Preferred Stock and any other Restricted Subsidiary may
incur Acquired Debt, if the Fixed Charge Coverage Ratio for the Trust's most
recently ended four full fiscal quarters for which financial statements are
publicly available immediately preceding the date on which such additional
Indebtedness is
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incurred or such Disqualified Stock or Preferred Stock is issued would have been
at least 2.0 to 1, determined on a Pro Forma Basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Preferred Stock or Disqualified Stock had been issued,
as the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant shall not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Trust and/or one or more Restricted
Subsidiaries of additional Indebtedness and letters of credit under
Credit Facilities in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of
the Trust and the Restricted Subsidiaries, without duplication,
thereunder) not to exceed $625.0 million less (x) the aggregate
principal amount of Receivables Debt outstanding under clause (2) below
and (y) the aggregate amount of all Net Proceeds of Asset Sales applied
by the Trust or any of its Restricted Subsidiaries to repay any
Indebtedness under a Credit Facility or Receivables Debt under
Receivables Facilities and effect a corresponding commitment reduction
thereunder pursuant to Section 4.11 hereof; provided, that Restricted
Subsidiaries that are not Guarantors shall not directly or indirectly
incur Indebtedness and letters of credit in an aggregate principal
amount outstanding under this clause (1) in excess of $50.0 million;
provided, further, that the aggregate principal amount of Indebtedness,
letters of credit and Receivables Debt under Receivables Facilities
which may be incurred under this clause (1) and clause (2) below shall
not be reduced below $100.0 million in the aggregate at any one time
outstanding by reason of subclause (y) above and subclause (y) of
clause (2) below;
(2) the incurrence by Receivables Subsidiaries of Receivables
Debt under Receivables Facilities in an aggregate principal amount at
any time outstanding pursuant to this clause (2) not to exceed $625
million less (x) the aggregate principal amount of Indebtedness and
letters of credit (determined as described in clause (1) above)
outstanding under clause (1) above and (y) the aggregate amount of all
Net Proceeds of Asset Sales applied to reduce commitments with respect
to Receivables Debt or Indebtedness under a Credit Facility pursuant to
the covenant described in Section 4.11 hereof; provided, that the
aggregate principal amount of Indebtedness, letters of credit and
Receivable Debt under Receivables Facilities which may be incurred
pursuant to this clause (2) and clause (1) above shall not be reduced
below $100.0 million in the aggregate at any one time outstanding by
reason of subclause (y) above and subclause (y) of clause (1) above;
(3) the incurrence by the Trust and its Restricted
Subsidiaries of the Existing Indebtedness;
(4) the incurrence by the Trust and the Guarantors of
Indebtedness represented by the Notes to be issued on the Issue Date
and the related Subsidiary Guarantees and the
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New Notes (as defined in the Registration Rights Agreement) to be
issued pursuant to the Registration Rights Agreement and the related
Subsidiary Guarantees;
(5) the incurrence by the Trust or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Trust or such Subsidiary, in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (5), not to exceed $50.0 million at
any time outstanding;
(6) (a) the incurrence by the Trust or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under the first paragraph of this
covenant or clauses (3), (4), (5), (6), or (14) of this paragraph and
(b) the incurrence by the Trust or any of its Restricted Subsidiaries
of Permitted Preferred Stock in exchange for, or the net proceeds of
which are used to refund, refinance or replace Preferred Stock (other
than intercompany Preferred Stock) that was permitted by this Indenture
to be incurred under the first paragraph of this covenant;
(7) the incurrence by the Trust or any of its Restricted
Subsidiaries of intercompany Indebtedness or Preferred Stock between or
among the Trust and any of its Restricted Subsidiaries; provided,
however, that:
(a) if the Trust or any Guarantor is the obligor on
such Indebtedness, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, in the case of the
Trust, or the Subsidiary Guarantee, in the case of a
Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness or Preferred
Stock being held by a Person other than the Trust or a
Restricted Subsidiary thereof and (ii) any sale or other
transfer of any such Indebtedness or Preferred Stock to a
Person that is not either the Trust or a Restricted Subsidiary
thereof; shall be deemed, in each case, to constitute an
incurrence of such Indebtedness or Preferred Stock by the
Trust or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (7);
(8) the incurrence by the Trust or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred solely for the
purpose of (a) fixing or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (b) hedging currency or commodity risks of the Trust and
its Restricted Subsidiaries incurred by the Trust or such Restricted
Subsidiaries in the ordinary course of their business;
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(9) the guarantee by the Trust or any of the Guarantors of
Indebtedness of the Trust or a Guarantor that was permitted to be
incurred by another provision of this covenant;
(10) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional
shares of the same class of Disqualified Stock shall not be deemed to
be an incurrence of Indebtedness or an issuance of Disqualified Stock
for purposes of this covenant; provided, in each such case, that the
amount thereof is included in Fixed Charges of the Trust as accrued;
(11) Indebtedness of the Trust or any Restricted Subsidiary
represented by performance bonds and letters of credit for the account
of the Trust or such Restricted Subsidiary, as the case may be, in
order to provide security for workers' compensation claims and payment
obligations in connection with self-insurance, in each case, that are
incurred in the ordinary course of business in accordance with
customary industry practice in amounts, and for the purposes, customary
in the Trust's industry;
(12) Indebtedness of the Trust or any Restricted Subsidiary
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred in
connection with the disposition of any business, assets or Subsidiary,
other than guarantees of Indebtedness incurred by any Person acquiring
all or any portion of such business, assets or Restricted Subsidiary
for the purpose of financing such acquisition; provided that the
maximum aggregate liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds actually received or to be
received by the Trust and the Restricted Subsidiary in connection with
such dispositions;
(13) Indebtedness of the Trust or any Restricted Subsidiary
solely in respect of bankers acceptances, and appeal bonds (to the
extent that any such incurrence does not result in the incurrence of
any obligation to repay any obligation relating to borrowed money of
others), all in the ordinary course of business in accordance with
customary industry practices, in amounts and for the purposes customary
in the Trust's industry; provided that the aggregate principal amount
outstanding of such Indebtedness (including any Indebtedness issued to
refinance, refund or replace such Indebtedness) shall at no time exceed
$5.0 million;
(14) the incurrence by any Restricted Subsidiary that is not a
Guarantor of Indebtedness in accordance with Section 4.10 hereof;
(15) the guarantee by any Restricted Subsidiary that is not a
Guarantor of Indebtedness of a Restricted Subsidiary that is not a
Guarantor that was permitted to be incurred under this Indenture; and
(16) the incurrence by the Trust or any of the Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any
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time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (16), not to exceed $35.0 million.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, incur any Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of the
Trust or such Restricted Subsidiaries unless such Indebtedness is also
contractually subordinated in right of payment to the Notes on substantially
identical terms; provided, however, that no Indebtedness of the Trust or its
Restricted Subsidiaries shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Trust or its Restricted
Subsidiaries solely by virtue of being unsecured.
For purposes of determining compliance with Section 4.09 hereof, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (16) above,
or is entitled to be incurred pursuant to the first paragraph of this covenant,
the Trust shall be permitted to classify such item of Indebtedness on the date
of its incurrence in any manner that complies with this covenant. Indebtedness
under Credit Facilities outstanding on the date on which Notes are first issued
and authenticated under this Indenture shall be deemed to have been incurred on
such date in reliance on the exception provided by clause (1) of the definition
of Permitted Debt.
Section 4.10. Limitation on Foreign Indebtedness
The Trust shall not permit any Restricted Subsidiary of the Trust that
is not a Guarantor to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) other than Permitted Debt unless:
(1) after giving effect to the incurrence of such Indebtedness
and the receipt of the application of the proceeds thereof:
(a) if, as a result of the incurrence of such
Indebtedness such Restricted Subsidiary shall become subject
to any restriction or limitation on the payment of dividends
or the making of other distributions,
(i) the Fixed Charge Coverage Ratio of Restricted
Subsidiaries that are not Guarantors (determined on a Pro
Forma Basis for the last four fiscal quarters for which
financial statements are available at the date of
determination) is greater than 2.75 to 1; and
(ii) the Trust's Fixed Charge Coverage Ratio
(determined on a pro forma basis for the last four fiscal
quarters of the Trust for which financial statements are
available at the date of determination) is greater than 2.0 to
1; or
(b) in any other case, the Trust's Fixed Charge
Coverage Ratio (determined on a Pro Forma Basis for the last
four fiscal quarters of the Trust for which financial
statements are available at the date of determination) is
greater than 2.0 to 1; and
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(2) no Default or Event of Default shall have occurred and be
continuing a the time or as a consequence of the incurrence of such
Indebtedness.
In the event that any Indebtedness incurred pursuant to clause (1)(b)
of the foregoing paragraph is proposed to be amended, modified or otherwise
supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Trust shall not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred pursuant
to the terms of clause (1)(a) of the foregoing paragraph.
In calculating the Fixed Charge Coverage Ratio of the Restricted
Subsidiaries that are not Guarantors, Fixed Charges with respect to Indebtedness
that is solely owed to and held by the Trust or a Restricted Subsidiary shall be
excluded.
All calculations required under the prior two paragraphs hereof shall
be made in a manner consistent with the calculations required under Section 4.09
hereof.
Section 4.11. Asset Sales.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Trust (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued
or sold or otherwise disposed of;
(2) with respect to any single transaction or series of
related transactions that involves assets having a fair market value of
more than $10.0 million, such fair market value is determined by the
Trust's Board of Directors and evidenced by a resolution of the Board
of Directors set forth in an Officers' Certificate delivered to the
Trustee; and
(3) at least 85% of the consideration therefor received by the
Trust or such Restricted Subsidiary is in the form of cash or Cash
Equivalents, provided, however, that more than 15% of the total
consideration may consist of consideration other than cash or Cash
Equivalents if (A) the portion of such consideration that does not
consist of cash or Cash Equivalents consists of assets of a type
ordinarily used in the operation of a Permitted Business to be used by
the Trust or a Restricted Subsidiary in the conduct of a Permitted
Business or Capital Stock of a Restricted Subsidiary engaged in a
Permitted Business (or a Person which becomes such a Restricted
Subsidiary as a result of the receipt of such consideration), (B) the
terms of such Asset Sale have been approved by a majority of the
members of the Board of Directors of the Trust and (C) if the value of
the assets being disposed of by the Trust or such Restricted Subsidiary
in such transaction (as determined in good faith by such members of the
Board of Directors) is at least $10.0 million, the Board of Directors
of the Trust has received a written opinion of a nationally recognized
investment banking firm (or other nationally recognized valuation
expert) to the effect that such Asset Sale is fair, from a financial
point of view, to the Trust and the
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Trust has delivered a copy of such opinion to the Trustee. For purposes
of this provision (3), each of the following shall be deemed to be
cash:
(a) any liabilities (as shown on the Trust's or such
Restricted Subsidiary's most recent balance sheet), of the
Trust or any Restricted Subsidiary (other than contingent
liabilities (except to the extent that a reserve or other
liability in respect thereof is reflected in accordance with
GAAP on the most recent balance sheet of the Trust or such
Restricted Subsidiary) and liabilities that are by their terms
subordinated to the Notes or any Subsidiary Guarantee) that
are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Trust or such
Restricted Subsidiary from further liability; and
(b) any securities, notes or other obligations
received by the Trust or any such Restricted Subsidiary from
such transferee that within 60 days of such Asset Sale are
converted by the Trust or such Restricted Subsidiary into cash
or Cash Equivalents (to the extent of the cash or Cash
Equivalents received in that conversion).
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Trust or Restricted Subsidiary may apply such Net Proceeds at its
option:
(1) to repay Indebtedness under Credit Facilities that are not
expressly subordinated by their terms to any other Indebtedness of the
Trust or such Guarantor and, if the Indebtedness repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure;
(4) to acquire other long-term assets that are used or useful
in a Permitted Business; or
(5) to make and consummate an Asset Sale Offer (as described
below).
Pending the final application of any such Net Proceeds, the Trust or
such Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs shall constitute "Excess Proceeds." When
(i) the aggregate amount of Excess Proceeds exceeds $10.0 million or (ii) the
Trust or any Restricted Subsidiary is required to make an offer to purchase or
redeem any Indebtedness which is pari passu with the Notes and which contains
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with asset sale proceeds, then in each such case, the
Trust shall make an Asset Sale Offer to all Holders of Notes issued thereunder
and all holders of other Indebtedness
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that is pari passu with such Notes containing provisions similar to those set
forth in this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase the maximum principal amount of such
Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and shall be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Trust or any
Restricted Subsidiary may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness tendered. Upon
completion of each Asset Sale Offer pursuant to this Indenture, the amount of
Excess Proceeds shall be reset at zero for purposes of such Indenture. The Trust
shall commence an Asset Sale Offer within ten (10) Business Days after the
amount of Excess Proceeds exceeds $10 million, such Asset Sale Offer shall
remain open for at least twenty (20) Business Days and the Trust shall complete
such Asset Sale Offer within thirty (30) Business Days after it is commenced.
All cash or Cash Equivalents received by the Trust or a Restricted
Subsidiary from an Event of Loss shall be used, invested, used for prepayment of
Indebtedness, or used to repurchase Notes, all of the foregoing within the
periods and as otherwise provided in the prior three paragraphs.
The Trust shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Asset Sale
covenant, the Trust shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Asset Sale covenant by virtue of such compliance.
Section 4.12. Transactions with Affiliates.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable to the Trust or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Trust
or such Restricted Subsidiary with an unrelated Person; and
(2) the Trust delivers to the Trustee:
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(a) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the
Board of Directors of the Trust or such Restricted Subsidiary,
as the case may be (or a resolution of the Board of Directors
of the Trust in the case of Venture Industries Canada, Ltd.)
and a resolution of the Independent members of the Fairness
Committee of the Trust or Restricted Subsidiary (or a
resolution of the Independent members of the Fairness
Committee of the Trust in the case of Venture Canada), set
forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this covenant; and
(b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $15.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal,
investment banking firm or other qualified independent
financial advisor of national standing.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of the prior paragraph:
(1) any transaction with officers or directors of the Trust or
any Restricted Subsidiary in the ordinary course of business and
consistent with the past practice of the Trust or such Restricted
Subsidiary;
(2) transactions between or among the Trust and/or its
Restricted Subsidiaries;
(3) payment of reasonable directors fees to Persons who are
not otherwise Affiliates of the Trust;
(4) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Trust;
(5) Restricted Payments that are permitted by Section 4.07
hereof;
(6) performance of all agreements in existence on the Issue
Date and any modification thereto or any transaction contemplated
thereby (including pursuant to any modification thereto) in any
replacement agreement therefor so long as such modification or
replacement is not more disadvantageous to the Holders in any material
respect than the original agreement as in effect on the Issue Date; and
(7) transactions between a Receivables Subsidiary and any
Person in which the Receivables Subsidiary has an Investment.
The Trust and each of its Restricted Subsidiaries (other than Venture
Industries Canada, Ltd.) shall have or shall establish and maintain a Fairness
Committee, at least one of whose members shall be Independent.
Section 4.13. Liens.
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The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness or trade payables on any asset
now owned or hereafter acquired, except Permitted Liens, unless the Trust or the
Guarantors provide, and cause their Restricted Subsidiaries to provide,
concurrently therewith, that the Notes are equally and ratably secured.
Section 4.14. Business Activities.
The Trust shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Trust and its Restricted Subsidiaries taken as a
whole.
Section 4.15. Corporate Existence.
Subject to Article 5 hereof, the Trust shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its existence
as a grantor trust pursuant to the laws of the state of Michigan, and the
corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Trust or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Trust and its
Subsidiaries; provided, however, that the Trust shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors of the
Trust shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Trust and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
Section 4.16. Change of Control.
If a Change of Control occurs, each Holder of Notes shall have the
right to require the Trust to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of that Holder's Notes pursuant to a "Change of
Control Offer." In the Change of Control Offer, the Trust shall offer a Change
of Control Payment in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the date of purchase. Within 20 days following any Change of
Control, the Trust shall mail a notice to each Holder describing the transaction
or transactions that constitute the Change of Control and offering to repurchase
Notes on the Change of Control Payment Date specified in such notice, which date
shall be no earlier than 20 Business Days and no later than 55 Business Days
from the date such notice is mailed, pursuant to the procedures required by this
Indenture and described in such notice. The Trust shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of this Indenture,
the Trust shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Change of
Control provision by virtue of such conflict.
On the Change of Control Payment Date, the Trust shall, to the extent
lawful:
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(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof
so tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased
by the Trust.
The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof.
The provisions described above that require the Trust to make a Change
of Control Offer following a Change of Control shall be applicable regardless of
whether any other provisions of this Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Trust repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Trust shall not be required to make a Change of Control Offer upon
a Change of Control if a third party makes a Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Trust, and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Section 4.17. Additional Guarantors
All future domestic Restricted Subsidiaries (other than Receivables
Subsidiaries) shall become Guarantors of the Notes. In addition, the Trust shall
not permit any of its Restricted Subsidiaries, directly or indirectly, to
Guarantee or pledge any assets to secure the payment of any other Indebtedness
of the Trust or any Guarantor unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture providing for the Guarantee of
the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be
senior to or pari passu with such Restricted Subsidiary's Guarantee of or pledge
to secure such other Indebtedness.
Notwithstanding the preceding paragraph, any Subsidiary Guarantee of
the Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged under the circumstances in Section 5.01
hereof. A form of the Subsidiary Guarantees is attached as Exhibit E hereto.
Section 4.18. Designation of Restricted and Unrestricted Subsidiaries
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The Board of Directors of the Trust may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments
(without duplication) owned by the Trust and its Restricted Subsidiaries in the
Subsidiary so designated shall be deemed to be an Investment made as of the time
of such designation and shall either reduce the amount available for Restricted
Payments under the first paragraph of Section 4.07 hereof or reduce the amount
available for future Investments under one or more clauses of the definition of
Permitted Investments, as the Trust shall determine. That designation shall only
be permitted if such Investment would be permitted at that time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
Section 4.19. Limitation on Amendments to Agreements
So long as the Trust is Venture Holdings Trust and is an obligor under
the Indentures, (i) the Trust shall not engage in any business activity except
for agreements related to its outstanding Indebtedness; (ii) the Trust shall not
own any property other than (A) the stock or membership interest of its
subsidiaries, (B) insurance on the life of the Beneficiary, or (C) amounts
allowed to be distributed by it under the terms of its outstanding indebtedness
or required to be used by the Trust to service such outstanding Indebtedness and
its other Obligations incurred in the ordinary course in accordance with past
practice; and (iii) the Venture Trust Instrument shall not be amended, modified
or changed in any manner except that the Trust may make amendments,
modifications or changes which individually or in the aggregate are not adverse
to the interests of the Holders of the Notes. Without limiting the foregoing,
amendments to the Venture Trust Instrument reasonably necessary to conform to
the requirements of Section 1361(c)(2), 1361(d) or 1361(e) of the Code, or their
successors or supplements, shall not be deemed adverse to the interests of the
Holders of the Notes. The Trust shall not amend, modify or in any way alter the
Corporate Opportunity Agreement in any manner adverse to the Trust or any of its
Restricted Subsidiaries.
Section 4.20. Payments for Consent
The Trust shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.21. Corporate Opportunities
Larry J. Winget shall agree pursuant to the Corporate Opportunity
Agreement for the benefit of the Holders of the Notes that if any corporate
opportunity, business opportunity, proposed transaction, acquisition,
disposition, participation, interest, or other opportunity to acquire an
interest in any business or prospect in the same business or in any business
reasonably
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related to the business of the Trust or any of its Subsidiaries or in
any machinery or equipment useful in the business of the Trust or any of its
Subsidiaries (a "Business Opportunity") comes to his attention or shall be made
available to him or any of his Affiliates, a complete and accurate description
of such Business Opportunity, including all of the terms and conditions thereof
and the identity of all other Persons involved in the Business Opportunity,
shall be promptly presented in writing to the Board of Directors of each of the
Trust and each Guarantor and the Fairness Committee of the Trust and each
Guarantor and the Trust and each Guarantor shall be entitled to pursue and take
advantage of such Business Opportunity, either directly or through a wholly
owned Restricted Subsidiary, and Larry J. Winget shall not, nor shall any of his
Affiliates (other than the Trust or any wholly owned Restricted Subsidiary of
the Trust), pursue or take advantage of a Business Opportunity unless majorities
of the Board of Directors of the Trust and each Guarantor and the Fairness
Committee of the Trust and each Guarantor (including majorities of the Trust's
and each Guarantor's disinterested directors, if any, and Independent members of
the Fairness Committee) have determined that it is not in the interests of the
Trust or such Guarantor to pursue or take advantage of such Business
Opportunity.
Notwithstanding the foregoing, Business Opportunities (1) relating to
the purchase of machinery and equipment or real estate and not constituting a
business within the meaning of Section 11.01 (d) of Regulation S-X of the
Commission or (2) relating to the sale of goods and services by an Affiliate in
the ordinary course of business as conducted as of the Issue Date shall not be
subject to the Corporate Opportunity Agreement.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
(a) The Trust may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Trust is the surviving entity);
or (2) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Trust (computed on a
consolidated basis), in one or more related transactions, to another Person;
unless:
(i) either: (a) the Trust is the continuing entity;
or (b) the Person formed by or surviving any such consolidation or
merger (if other than the Trust) or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made is
organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such
consolidation or merger (if other than the Trust) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of the Trust under the
Notes, the Indenture and the Registration Rights Agreements pursuant to
agreements reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default
or Event of Default exists; and
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(iv) the Trust or the Person formed by or surviving
any such consolidation or merger (if other than the Trust), or to which
such sale, assignment, transfer, conveyance or other disposition shall
have been made:
(A) shall have a Consolidated Net Worth
immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Trust immediately preceding the
transaction; and
(B) shall, on the date of such transaction
after giving Pro Forma Effect thereto and any related
financing transactions as if the same had occurred at the
beginning of the applicable Reference Period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
The foregoing clause (iv) will not apply to a sale, assignment,
transfer, conveyance or other disposition of assets between or among the Trust
and any of the Guarantors.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Trust's interest in which constitutes all or
substantially all of the properties and assets of the Trust shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Trust.
Notwithstanding anything contained in this Indenture to the contrary,
the Trust is permitted to contribute or otherwise transfer all of the Equity
Interests of the Subsidiaries then held by the Trust (other than the Equity
Interests of the Subsidiary which is to receive such contribution from the
Trust) to Venture Holdings Corporation or other successor to the Trust (a "Trust
Contribution"), provided that (A) any successor or surviving entity is organized
and existing under the laws of the United States, any state thereof or the
District of Columbia, (B) such contribution or reorganization is not materially
adverse to Holders of the Notes; it being understood, however, that such
contribution or reorganization shall not be considered materially adverse to
Holders of the Notes solely because the successor or surviving entity is subject
to income taxation as a corporate entity, (C) immediately after giving effect to
such transaction, no Default or Event of Default exists, (D) the actions
comprising such contribution or reorganization (e.g., the contribution of
Capital Stock of the Subsidiaries, or the issuance of Capital Stock of the
entity in exchange for assets of or Equity Interests in the Trust or in exchange
for stock of a entity holding such Equity Interests, or the merger or
consolidation of such entities) shall not themselves directly result in material
income tax liability to the successor or surviving entity, (E) the successor or
surviving entity has assumed all obligations of the Trust, pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee, under
the Notes and the Indenture and (F) Holders of the Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of such
contribution or reorganization and shall be subject to federal income tax with
respect to the Notes on the same amounts, in the same manner, and at the same
time as would have been the case if such contribution or reorganization had not
occurred. If the successor or surviving entity after a Trust Contribution is not
a Pass-Through Entity, the Trust's ability to make Trust Tax Distributions must
terminate prior to such contribution or reorganization (except with respect to
Trust Tax Distributions in respect of taxable periods
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ending on or prior to the date such contribution or reorganization is effective
for relevant tax purposes), other than Trust Tax Distributions in respect of
Beneficiaries' income tax liability that results from the actions comprising
such contribution or reorganization. The Trust shall deliver to the Trustee
prior to such contribution or reorganization an Officers' Certificate covering
clauses (A) through (F) and the preceding sentence of this paragraph, stating
that such contribution or reorganization and such supplemental indenture comply
with the Indenture, and an opinion of counsel covering clauses (A), (D), (E) and
(F) above and the preceding sentence of this paragraph.
(b) A Guarantor may not consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person), another Person, other than the
Trust or another Guarantor, unless:
(i) immediately after giving effect to that
transaction, no Default or Event of Default exists; and
(ii) either: (a) the Person formed by or surviving
any such consolidation or merger assumes all the obligations of that
Guarantor under the Indenture, its Subsidiary Guarantee and the
Registration Rights Agreement, pursuant to a supplemental indenture
satisfactory to the Trustee or (b) the Net Proceeds of such sale or
other disposition are applied in accordance with Section 4.11 hereof.
The Subsidiary Guarantee of a Guarantor shall be released from its
obligations under the Subsidiary Guarantee:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or
after giving effect to such transaction) a Subsidiary of the Trust, if
the Guarantor applies the Net Proceeds of that sale or other
disposition are applied in accordance with Section 4.11 hereof; or
(2) in connection with any sale of all of the Capital Stock of
that Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Subsidiary of the Trust, if the Guarantor
applies the Net Proceeds of that sale in accordance with Section 4.11
hereof; or
(3) if the Trust properly designates that Guarantor as an
Unrestricted Subsidiary; provided, however, that any such termination
shall occur only to the extent that all obligations of such Guarantor
under all of its guarantees of, and under all of its pledges of assets
or other security interests which secure, any Indebtedness of the
Trust, the Guarantors or any other Restricted Subsidiary shall also
terminate upon such sale, disposition or designation.
Section 5.02. Successor Corporation Substituted.
(a) Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Trust in accordance
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with Section 5.01 hereof, the successor corporation or limited liability company
formed by such consolidation or into or with which the Trust is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Trust" shall refer instead to the
successor corporation or limited liability company and not to the Trust), and
may exercise every right and power of the Trust under this Indenture with the
same effect as if such successor Person had been named as the Trust herein;
provided, however, that the predecessor Trust shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale or other disposition of all (other than the Equity Interests of the
Subsidiary which is to receive such contribution from the Trust) of the Trust's
assets that meets the requirements of Section 5.01 hereof.
(b) In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transactions) a
Subsidiary of the Trust, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the Capital
Stock of such Guarantor) or the Person acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.11 hereof. Upon delivery by the Trust to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Trust in accordance with the
provisions of this Indenture, including without limitation Section 4.11 hereof,
the Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in Article 10.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Trust defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days;
(b) the Trust defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;
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(c) the Trust or any Restricted Subsidiary fails to comply with any of
the provisions of Section 4.11 or 4.16 hereof;
(d) the Trust or any Restricted Subsidiary fails to observe or perform
any other covenant, representation, warranty or other agreement in this
Indenture or the Notes for 60 days after notice to the Trust by the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes,
including Additional Notes, if any, then outstanding voting as a single class or
Larry J. Winget fails to observe and perform any covenant or agreement contained
in the Corporate Opportunity Agreement;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness in an aggregate principal amount of $15.0 million for money
borrowed by the Trust or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Trust or any of its Restricted Subsidiaries), whether
such Indebtedness or guarantee now exists, or is created after the date of this
Indenture, which default (1) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default or (2)
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
payment default or the maturity of which has been so accelerated, aggregates
$15.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Trust or any
of its Restricted Subsidiaries and such judgment or judgments are not covered by
insurance and remain undischarged for a period (during which execution shall not
be effectively stayed or bonded) of 60 days, provided that the aggregate of all
such undischarged judgments exceeds $10.0 million;
(g) any Subsidiary Guarantee is terminated for any reason not permitted
by this Indenture, or any Guarantor or any Person acting on behalf of any
Guarantor denies such Guarantor's obligations under its respective Subsidiary
Guarantee;
(h) the Trust, any Guarantors or any of its Significant Subsidiaries or
group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit
of its creditors, or
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(v) generally is not paying its debts as they
become due; or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Trust, any
Guarantor or any Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Trust, any
Guarantor or any Significant Subsidiary or for all or substantially
all of the property of the Trust or any of its Subsidiaries; or
(iii) orders the liquidation of the Trust, any
Guarantor or any Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Trust or any
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes may declare all the Notes to
be due and payable by notice in writing to the Trust and the Trustee specifying
the respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice") and the same shall become immediately due and payable.
Notwithstanding the foregoing, if an Event of Default specified in Sections
6.01(h) or (i) hereof occurs, with respect to the Trust or any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce this
Indenture or the Notes except as provided in this Indenture. Subject to Article
9 hereof, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Trust with the
intention of avoiding payment of the premium that the Trust would have had to
pay if the Trust then had elected to redeem the Notes pursuant to Section 3.07
hereof, an equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law, upon the acceleration of the Notes. If
an Event of Default occurs prior to June 1, 2003 by reason of any willful action
(or inaction) taken (or not taken) by or on behalf of the Trust with the
intention of avoiding the prohibition on redemption of the Notes prior to such
date, then, upon acceleration of the Notes, an additional premium shall also
become and be immediately due and payable in an amount, for each of the years
beginning on June 1 of the years set forth below, as set forth below (expressed
as a percentage of the principal amount of the Notes on the date of payment that
would otherwise be due but for the provisions of this sentence):
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<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1999 112.833%
2000 111.000%
2001 109.166%
2002 107.333%
</TABLE>
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any,
Liquidated Damages, 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 Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
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(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on a Note, on or after the respective due dates
expressed in such Note (including in connection with an offer to purchase), or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.07. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Trust for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.08. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Trust
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
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it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.09. 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, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
Third: to the Trust or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.10. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
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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 circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Trust. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
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(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Trust shall be sufficient if
signed by an Officer of the Trust.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Trust or any Affiliate
of the Trust with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Trust's use of the proceeds from the Notes or any money paid
to the Trust or upon the Trust's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
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If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Trust and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Trust shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
Section 7.07. Compensation and Indemnity.
The Trust shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Trust shall reimburse the Trustee promptly upon
request for all reasonable disbursements, advances and expenses incurred or made
by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Trust shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Trust (including this
Section 7.07) and defending itself against any claim (whether asserted by the
Trust or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Trust promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Trust shall not
relieve the Trust of its obligations hereunder. The Trust shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Trust shall pay the reasonable fees and expenses of such
counsel. The Trust need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The obligations of the Trust under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
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To secure the Trust's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Trust. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Trust in writing. The Trust may remove the Trustee
if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Trust shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Trust.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Trust, or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
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 Trust. Thereupon, the resignation
or removal of the retiring Trustee shall
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become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. The successor Trustee shall mail
a notice of its succession to Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Trust's obligations under Section 7.07 hereof
shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11. Preferential Collection of Claims Against Trust.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Trust may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Trust's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Trust shall, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Trust shall be
deemed to have paid and
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discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Trust, shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages on such Notes when such payments are
due, (b) the Trust's obligations with respect to such Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen
Notes and the maintenance of an office or agency for payment and money for
security payments held in trust, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Trust's obligations in connection
therewith and (d) this Article 8. Subject to compliance with this Article 8,
the Trust may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Trust's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Trust shall, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.04, 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, 4.19, 4.20 and 4.21 hereof
and Section 5.01 hereof with respect to the outstanding Notes on and after the
date the conditions set forth in Section 8.04 are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Trust may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Trust's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(c) through 6.01(g) hereof shall not
constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
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(a) the Trust must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the Trust
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Trust has received
from, or there has been published by, the Internal Revenue Service a ruling or
(B) since the date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Trust
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness, all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Sections 6.01(h) or 6.01(i)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Trust or any of its
Subsidiaries is a party or by which the Trust or any of its Subsidiaries is
bound;
(f) the Trust shall have delivered to the Trustee an Opinion of Counsel
(which may be subject to customary exceptions) to the effect that on the 91st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Trust shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Trust with the intent
of preferring the Holders over any other creditors of the Trust or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Trust; and
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(h) the Trust shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Trust acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Trust shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Trust from time to time upon the request of the
Trust any money or non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Trust.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Trust, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be paid to the
Trust on its request or (if then held by the Trust) shall be discharged from
such trust; and the Holder of such Note shall thereafter look only to the Trust
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Trust as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Trust cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Trust.
Section 8.07. Reinstatement.
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If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Trust's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Trust makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Trust shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Trust, the
Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related definitions) in a manner that does not materially adversely affect any
Holder;
(c) to provide for the assumption of the Trust's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Trust or such
Guarantor pursuant to Article 5 or Article 10 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to allow any Guarantor to execute a Supplemental Indenture and/or a
Subsidiary Guarantee with respect to the Notes;
(g) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof.
Upon the request of the Trust accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the
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Trust and the Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Trust and the
Trustee may amend or supplement this Indenture (including Section 3.09, 4.11 and
4.16 hereof) and the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture, the
Subsidiary Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes, including
Additional Notes, if any, voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Trust accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Trust in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Trust shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Trust to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Indenture
or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority
in aggregate principal amount of the Notes, including Additional Notes, if any,
then outstanding voting as a single class may waive compliance in a particular
instance by the Trust with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
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(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the Notes
(except as provided above with respect to Sections 3.09, 4.11 and 4.16 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes including Additional Notes, if
any, and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or interest on the Notes; or
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(h) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms of
this Indenture; or
(i) make any change to the preceding amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
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The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Trust in exchange
for all Notes may issue and the Trustee shall, upon receipt of an Authentication
Order, authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Trust
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental Indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
11.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBSIDIARY GUARANTEES
Section 10.01.Guarantee.
Subject to this Article 10, each Guarantor that becomes party to this
Indenture hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Trust hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Trust to the Holders
or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
Each Guarantor that becomes party to this Indenture hereby agrees that
their obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Trust, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor that becomes party to this Indenture
hereby waives diligence, presentment, demand of
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payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Trust, any right to require a proceeding first against the Trust,
protest, notice and all demands whatsoever and covenant that this Subsidiary
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Trust, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Trust or the Guarantors,
any amount paid by either to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor that becomes party to this Indenture agrees that it
shall not be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each such Guarantor further agrees that, as
between the Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Guarantee.
Section 10.02. Limitation on Guarantor Liability.
Each Guarantor that becomes party to this Indenture, and by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of
all such parties that the Subsidiary Guarantee of such Guarantor not constitute
a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Subsidiary Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and each Guarantor
hereby irrevocably agrees that the obligations of such Guarantor will, after
giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 10, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.
Section 10.03.Execution and Delivery of Subsidiary Guarantee and Supplemental
Indenture.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor that becomes party to this Indenture hereby agrees that a notation of
such Subsidiary Guarantee substantially in the form included in Exhibit E shall
be endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee and that such Guarantor shall become party to, and
bound by the terms of, this Indenture by execution on behalf of such Guarantor
by
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its President or one of its Vice Presidents of a Supplemental Indenture in
the form of Exhibit F hereto.
Each Guarantor hereby agrees that its Subsidiary 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 Subsidiary Guarantee.
If an Officer whose signature is on a Supplemental Indenture or on a
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed or at the
time the Trustee accepts delivery of the executed Subsidiary Guarantee and
Supplemental Indenture, the Subsidiary Guarantee shall be valid nevertheless.
In the event that the Trust creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.17 hereof,
the Trust shall cause such Subsidiaries to execute Supplemental Indentures to
this Indenture in the form of Exhibit F hereto and Subsidiary Guarantees in the
form of Exhibit E hereto in accordance with Section 4.17 hereof and this Article
10, to the extent applicable.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 11.02. Notices.
Any notice or communication by the Trust or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Trust:
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
Telecopier No.: (810) 294-1960
Attention: Chief Financial Officer
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With a copy to:
Paul Lieberman, P.C.
1471 S. Woodward, Suite 250
Bloomfield Hills, MI 48302
Telecopier No.: (248) 335-4689
If to the Trustee:
The Huntington National Bank
41 South High Street
Columbus, OH 43215
Attention: Corporate Trust Department
Telecopier No.: (614) 480-5223
The Trust or the Trustee, by notice to the others may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Trust mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
Section 11.03.Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Trust, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Trust to the Trustee to take any
action under this Indenture, the Trust shall furnish to the Trustee:
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(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
stockholder, manager, member, partner, trustee, beneficiary, special advisor or
member of the successor special advisor group of the Trust or any Guarantor, as
such, shall have any liability for any obligations of the Trust or the
Guarantors under the Notes, the Subsidiary Guarantees, this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
Section 11.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES
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WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Trust or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 11.10. Successors.
All agreements of the Trust in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 5.02.
Section 11.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 11.13. Table of Contents, Headings, etc.
The Table of Contents and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
VENTURE HOLDINGS TRUST
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VEMCO, INC.
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE INDUSTRIES CORPORATION
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE HOLDINGS CORPORATION
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE LEASING COMPANY
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
S-1
<PAGE> 105
VENTURE MOLD & ENGINEERING CORPORATION
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE SERVICE COMPANY
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
EXPERIENCE MANAGEMENT LLC
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE EU CORPORATION
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE EUROPE, INC.
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
S-2
<PAGE> 106
VENTURE HOLDINGS COMPANY LLC
By: /s/ James E. Butler, Jr.
--------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
THE HUNTINGTON NATIONAL BANK
By: /s/ Ruth F. Sowers
--------------------------------------
Name: Ruth F. Sowers
-----------------------------------
Title: Authorized Signer
-----------------------------------
S-3
<PAGE> 107
EXHIBIT A
[Face of Note]
================================================================================
CUSIP/CINS
--------------
11% Senior Notes due 2007
No. $
---- -----------
VENTURE HOLDINGS TRUST
promises to pay to
------------------------------------------------------------
or registered assigns,
--------------------------------------------------------
the principal sum of
----------------------------------------------------------
Dollars on June 1, 2007.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: , 1999.
----------------
VENTURE HOLDINGS TRUST
By:
------------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
This is one of the Notes referred to
in the within-mentioned Indenture:
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:
-------------------------
Authorized Signatory
A-1
<PAGE> 108
[Back of Note]
================================================================================
11% Senior Notes due 2007
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III)
THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.](1)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.](2)
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY,
REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
- --------------------------
(1) To be included only on Global Notes.
(2) To be included only on Global Notes deposited with the DTC as Depositary.
A-2
<PAGE> 109
OF THE UNITED STATES OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT
PRIOR TO SUCH TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES A LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THE
NOTES), (C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (E)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON CERTIFICATES AND AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), AS LONG AS THE REGISTRAR RECEIVES A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS REQUIRED TO
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTION SET FORTH IN (A) ABOVE."(3)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Venture Holdings Trust (the "Trust"), promises to pay
interest on the principal amount of this Note at 11% per annum from December 1,
1999 until maturity and shall pay the Liquidated Damages payable pursuant to
Section 4 of the Registration Rights Agreement referred to below. The Trust will
pay interest and Liquidated Damages semi-annually in arrears on June 1 and
December 1 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
- -------------------------
(3) To be included only on Restricted Global Notes or Restricted Definitive
Notes.
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<PAGE> 110
Payment Date; provided, further, that the first Interest Payment Date shall be
December 1, 1999. The Trust shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Trust will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the June 1 or December 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, if any, Liquidated Damages, if any, and
interest at the office or agency of the Trust maintained for such purpose within
or without the City and State of New York, or, at the option of the Trust,
payment of interest and Liquidated Damages may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium, if any, and Liquidated
Damages, if any, on all Global Notes and all other Notes the Holders of which
hold greater than $1.0 million aggregate principal amount of Notes and which
shall have provided wire transfer instructions to the Trust or the Paying Agent.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Huntington National Bank,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Trust may change any Paying Agent or Registrar without notice to any Holder. The
Trust or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Trust issued the Notes under an Indenture dated as of
May 27, 1999 ("Indenture") between the Trust and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the indenture shall govern and be controlling. The Notes are
obligations of the Trust limited to $175 million in aggregate principal amount
$125 million of which was originally issued under the Indenture.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Trust shall not have the option to redeem the Notes prior to June 1, 2003.
Thereafter, the Trust shall have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below
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plus accrued and unpaid interest and Liquidated Damages thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on June 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003 105.500%
2004 103.667%
2005 101.833%
2006 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to June 1, 2002, the Trust may redeem up to 35%
of the aggregate principal amount of Notes originally issued under the Indenture
at a redemption price equal to 111.000% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the redemption date, with net cash proceeds from an Equity Offering; provided
that at least 65% in aggregate principal amount of the Notes originally issued
remain outstanding immediately after the occurrence of such redemption; and
provided, further that such redemption occurs within 120 days of the date of the
closing of such Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Trust shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Trust shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 20 days following any Change of
Control, the Trust shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Trust or a Restricted Subsidiary consummates any Asset
Sales, within ten days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Trust shall commence an offer to all Holders
of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes, including Additional Notes, if
any, that may be purchased out of the Excess Proceeds at an offer price in cash
in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date fixed for
the closing of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Trust or any
Restricted Subsidiary may use such deficiency for general corporate purposes. If
the aggregate principal amount of Notes, including Additional Notes, if any,
surrendered by Holders thereof
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<PAGE> 112
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Holders of Notes that are the subject of an offer
to purchase will receive an Asset Sale Offer from the Trust prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the Trust
may require a Holder to pay any taxes and fees required by law or permitted by
the Indenture. The Trust need not exchange or register the transfer of any Note
or portion of a Note selected for redemption, except for the unredeemed portion
of any Note being redeemed in part. Also, the Trust need not exchange or
register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes, including Additional Notes, if any, voting
as a single class, and any existing default or compliance with any provision of
the Indenture, the Subsidiary Guarantees or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes, including Additional Notes, if any, voting as a single class. Without the
consent of any Holder of a Note, the Indenture, the Subsidiary Guarantees or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Trust's obligations to
Holders of the Notes in case of a successor to the Trust, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Subsidiary Guarantee with respect to the
Notes.
A-6
<PAGE> 113
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on or Liquidated Damages with
respect to the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Trust or any Restricted Subsidiary to comply
with Section 4.11 or 4.16 of the Indenture; (iv) failure by the Trust or any
Restricted Subsidiary for 60 days after notice to the Trust by the Trustee or
the Holders of at least 25% in principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class to observe
or perform any other agreement in the Indenture or by Larry J. Winget to observe
and perform any covenant or agreement contained in the Corporate Opportunity
Agreement; (v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Trust or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Trust or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default (a) is caused by a
Payment Default, as defined in Section 6.01(e) of the Indenture or (b) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more; (vi) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction against the
Trust or any of its Restricted Subsidiaries and such judgment or judgments
remain undischarged for a period (during which execution shall not be
effectively stayed or bonded) of 60 days, provided that the aggregate of all
such undischarged judgments exceeds $10 million; (vii) any Subsidiary Guarantee
is terminated for any reason not permitted by the Indenture, or any Guarantor or
any Person acting on behalf of any Guarantor denies such Guarantor's obligations
under its respective Subsidiary Guarantee or (viii) certain events of bankruptcy
or insolvency with respect to the Trust or any of its Subsidiaries. If any Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes may declare all the Notes to
be due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Trust is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Trust is required upon becoming aware of
any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
A-7
<PAGE> 114
13. TRUSTEE DEALINGS WITH TRUST. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Trust or its Affiliates, and may otherwise deal with the Trust or its
Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, manager, member, partner, trustee, beneficiary,
special advisor or member of the successor special advisor group of the Trust,
as such, shall not have any liability for any obligations of the Trust under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Trust 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 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 Trust will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
Attention: Chief Financial Officer
A-8
<PAGE> 115
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
-----------------------------------
(Insert assignee's legal name)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Trust. The agent may substitute
another to act for him.
Date:
Your Signature:
-----------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-9
<PAGE> 116
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Trust pursuant
to Section 4.11 or 4.16 of the Indenture, check the appropriate box below:
[ ] Section 4.11 [ ] Section 4.16
If you want to elect to have only part of the Note purchased by the
Trust pursuant to Section 4.11 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$
---------------------
Date:
Your Signature:
-----------------------------
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
---------------------
Signature Guarantee*:
-----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-10
<PAGE> 117
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease Amount of increase of this Global Note authorized officer
in in following such of
Principal Amount of Principal Amount decrease Trustee or Note
Date of Exchange of this Global Note this Global Note (or increase) Custodian
- ---------------- --------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
A-11
<PAGE> 118
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
[Registrar address block]
Re: 11% Senior Notes Due 2007
Reference is hereby made to the Indenture, dated as of May 27, 1999
(the "Indenture"), between Venture Holdings Trust, as issuer (the "Trust"), and
The Huntington National Bank, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time
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<PAGE> 119
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note, the Regulation S Temporary Global Note and/or the Definitive Note
and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Trust or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of
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<PAGE> 120
Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal
amount of Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such Transfer
is in compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI Global
Note and/or the Definitive Notes and in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
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<PAGE> 121
This certificate and the statements contained herein are made for your benefit
and the benefit of the Trust.
-------------------------------------
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated:
---------------
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<PAGE> 122
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
(ii) [ ] Regulation S Global Note (CUSIP ), or
(iii) [ ] IAI Global Note (CUSIP ); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
(ii) [ ] Regulation S Global Note (CUSIP ), or
(iii) [ ] IAI Global Note (CUSIP ); or
(iv) [ ] Unrestricted Global Note (CUSIP ); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
[Registrar address block]
Re: 11% Senior Notes due 2007
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between Venture Holdings Trust, as issuer (the "Trust"), and The
Huntington National Bank, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without
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<PAGE> 124
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
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<PAGE> 125
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust.
--------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:
-----------------
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<PAGE> 126
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
[Registrar address block]
Re: 11% Senior Notes due 2007
Reference is hereby made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between Venture Holdings Trust, as issuer (the "Trust"), and The
Huntington National Bank, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Trust or any subsidiary thereof, (B) in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to you and to the Trust a signed letter substantially
in the form of this letter and , if such transfer is in respect of a principal
amount of Notes, at the time of transfer of less than $250,000, an Opinion of
Counsel in form
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<PAGE> 127
reasonably acceptable to the Trust to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the Trust
such certifications, legal opinions and other information as you and the Trust
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Trust are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-----------------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------------
Name:
Title:
Dated:
------------------
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<PAGE> 128
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor Person
under the Indenture) has, jointly and severally, unconditionally guaranteed, to
the extent set forth in the Indenture and subject to the provisions in the
Indenture dated as of May 27, 1999 (the "Indenture") among Venture Holdings
Trust and The Huntington National Bank, as trustee (the "Trustee"), (a) the due
and punctual payment of the principal of, premium, if any, and interest on the
Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of the Trust to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee. Each Holder of a Note, by accepting the same agrees to and
shall be bound by such provisions.
[NAME OF GUARANTOR(S)]
By:
---------------------------------
Name:
Title:
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<PAGE> 129
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_____________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Venture Holdings Trust (the "Trust"), the other Guarantors (as
defined in the Indenture referred to herein) and The Huntington National Bank,
as trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Trust has heretofore executed and delivered to the Trustee an
indenture (the "Indenture"), dated as of May 27, 1999 providing for the issuance
of an aggregate principal amount of up to $175.0 million of 11% Senior Notes due
2007 of which $125.0 million was issued on the date of the Indenture (the
"Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Trust's Obligations under the Notes and the Indenture and
become party to such Indenture on the terms and conditions set forth herein (the
"Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing
Subsidiary and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors that become party to the Indenture, to
jointly and severally and unconditionally guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the Notes or the obligations of the Trust hereunder or thereunder,
that:
(i) the principal of and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on
the Notes, if any, if lawful, and all other obligations of the Trust to
the Holders or the Trustee hereunder or thereunder will be
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<PAGE> 130
promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately. Each
Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection.
(b) The obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Trust, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Trust, any right to require a proceeding first against the Trust,
protest, notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise
to return to the Trust, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Trust or the Guarantors,
any amount paid by either to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantee.
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(i) Pursuant to Section 10.03 of the Indenture, after giving effect to
any maximum amount and any other contingent and fixed liabilities that are
relevant under any applicable Bankruptcy or fraudulent conveyance laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under Article 10 of the Indenture, this new
Subsidiary Guarantee shall be limited to the maximum amount permissible such
that the obligations of such Guarantor under this Subsidiary Guarantee will not
constitute a fraudulent transfer or conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees (a) that
the Subsidiary Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee; (b)
by execution of this Supplemental Indenture, to be party to, and bound by, the
terms of the Indenture, as supplemented hereby; and (c) that if an Officer whose
signature is on this Supplemental Indenture no longer holds that office at the
time the Trustee authenticates the Note on which a Subsidiary Guarantee is
endorsed or at the time the Trustee accepts delivery of the executed
Supplemental Indenture, this Supplemental Indenture shall be valid nevertheless.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:
(i) subject to Sections 10.04 and 10.05 of the Indenture, the
Person formed by or surviving any such consolidation or merger (if
other than a Guarantor or the Trust) unconditionally assumes all the
obligations of such Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee, under the
Notes, the Indenture and the Subsidiary Guarantee on the terms set
forth herein or therein; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Trust and
delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of the Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
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<PAGE> 132
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the Indenture or
in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Trust or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Trust or another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the Capital Stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transaction) a
Subsidiary of the Trust, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the Capital
Stock of such Guarantor) or the Person acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture, including
without limitation Section 4.11 of the Indenture. Upon delivery by the Trust to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Trust in accordance with the
provisions of the Indenture, including without limitation Section 4.11 of the
Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under the
Indenture as provided in Article 10 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder, manager, member, partner, trustee,
beneficiary, special advisor, member of the successor special advisor group or
agent of the Guaranteeing Subsidiary, as such, shall have any liability for any
obligations of the Trust or any Guaranteeing Subsidiary under the Notes, any
Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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<PAGE> 133
8. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Trust.
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<PAGE> 134
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ,
--------------- -----
[GUARANTEEING SUBSIDIARY]
By:
--------------------------------
Name:
Title:
VENTURE HOLDINGS TRUST
By:
--------------------------------
Name:
Title:
[EXISTING GUARANTORS, IF ANY]
By:
--------------------------------
Name:
Title:
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:
--------------------------------
Authorized Signatory
F-6
<PAGE> 135
EXHIBIT G
[Opinion of Special Tax Counsel]
To the Trustee:
Ladies and Gentlemen:
We have acted as special tax counsel to Venture Holdings Trust, a trust
organized under the laws of Michigan, and its successors (the "Trust"), in
connection with the execution of the $125,000,000 11% Senior Notes due 2007 and
$125,000,000 12% Senior Subordinated Notes due 2009 (collectively, the "Notes")
by the Trust in favor of various entities pursuant to an Indenture (the
"Indenture"), dated as of May 27, 1999, among the Trust and The Huntington
National Bank, as Trustee. This opinion is delivered pursuant to Section 4.07 of
the Indenture. Capitalized terms not defined herein shall have the meanings
ascribed to them in the Indenture.
We have examined (i) the Venture Trust Agreement (the "Trust
Agreement"), dated as of December 28, 1987, between Citizens Commercial &
Savings Bank, a Michigan corporation, as Trustee, and Larry J. Winget, as
Settlor, as amended by First Amendment to Venture Holdings Trust, dated April 5,
1990, as amended by Second Amendment to Venture Holdings Trust, dated October
29, 1993, as amended and restated in its entirety as of February 16, 1994, (ii)
the Notes, (iii) the Indenture and (iv) such further documents, and made such
further investigations as we deem necessary in order to render the opinion set
forth below. In addition, we have reviewed the pertinent statutes, regulations,
proposed regulations, case law and rulings.
Based on the foregoing, we are of the opinion that:
As of the date hereof, the Trust and each of the Investee Companies
will be treated for federal income tax purposes as Pass-Through Entities.
The Beneficiaries of the Trust shall be treated as the owners of the
entire portion of the Trust which consists of the ownership interests in the
Investee Companies and shall be required to include in their taxable income the
income, deductions and credits of the Trust attributable to such portion.
<PAGE> 1
EXHIBIT 4.1.1
FIRST SUPPLEMENTAL INDENTURE
This First Supplemental Indenture (the "Supplemental Indenture") to the
Indenture, dated as of May 27, 1999, by and among Venture Holdings Trust, a
grantor trust organized under the laws of Michigan (the "Trust") and The
Huntington National Bank, a national banking association, as Trustee (the
"Trustee") (the "Indenture") is made as of the 27th day of May, 1999 by and
among the Trust and the Trustee.
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee
the Indenture, which relates to the Issuers 11% Senior Notes due 2007 (the
"Notes"); and
WHEREAS, Section 5.01 of the Indenture permits the Trust to make a Trust
Contribution and, pursuant to the terms of a Trust Contribution Agreement (the
"Contribution Agreement"), dated as of the date hereof, the Trust has made a
Trust Contribution by contributing all of the Equity Interests of the
Subsidiaries (other than the Equity Interests in Venture Holdings Company LLC,
the Subsidiary that received such contribution) held by it to Venture Holdings
Company LLC, a Michigan limited liability company, all as more particularly set
forth in the Contribution Agreement; and
WHEREAS, Venture Holdings Company LLC intends to assume all the obligations
of the Trust under the Notes and the Indenture; and
WHEREAS, pursuant to Section 5.02 of the Indenture, from and after the date
hereof Venture Holdings Company LLC shall succeed to, and be substituted for (so
that the provisions referring to the "Trust" shall refer instead to Venture
Holdings Company LLC and not Venture Holdings Trust), and may exercise every
right and power of the Trust under the Indenture with the same effect as if
Venture Holdings Company LLC had been named in the Indenture as Trust, and the
Trust shall be released from the obligations under the Notes and the Indenture;
and
WHEREAS, pursuant to Sections and 9.01(c) of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the forgoing, each of the Issuers,
Venture Holdings Company LLC and the Trustee mutually covenant and agree as
follows:
i. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the
Indenture.
ii. Agreement to Assume Obligations. Venture Holdings Company
LLC hereby agrees to assume all the obligations of the Trust
under the Notes and the Indenture and to be bound by all other
applicable provisions of the Indenture.
<PAGE> 2
iii. Trust Obligations. The Trust shall be relieved of all
obligations under the Notes and the Indenture.
iv. Governing Law. The internal laws of the State of New York
shall govern this Supplemental Indenture, without regard to the
conflict of laws provisions thereof.
vi. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
vi. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
vii. The Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture, or for or in respect
of the recitals contained herein, all of which recitals are made
solely by the Issuers, Venture Holdings Company LLC and the
Guarantors.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
VENTURE HOLDINGS TRUST
VENTURE HOLDINGS COMPANY LLC
By: /s/ JAMES E. BUTLER
_________________________________________
James E. Butler, Executive Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
_________________________________________
Authorized Signer
<PAGE> 1
EXHIBIT 4.2
_______________________________________________________________________________
VENTURE HOLDINGS TRUST
12% SENIOR SUBORDINATED NOTES DUE 2009
------------------------
INDENTURE
DATED AS OF MAY 27, 1999
------------------------
THE HUNTINGTON NATIONAL BANK
TRUSTEE
------------------------
________________________________________________________________________________
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CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- --------------- -----------------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 11.03
(c) 11.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.07
(c) 7.06;11.02
(d) 7.06
314(a) 4.03;11.02
(b) N.A.
(c)(1) 11.04
(c)(2) 11.04
(c)(3) N.A.
(d) N.A.
(e) 11.05
(f) N.A.
315(a) 7.01
(b) 7.05,11.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.12
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 11.01
(b) N.A.
(c) 11.01
</TABLE>
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE................................. 1
SECTION 1.01. DEFINITIONS......................................................... 1
SECTION 1.02. OTHER DEFINITIONS................................................... 27
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT................... 28
SECTION 1.04. RULES OF CONSTRUCTION............................................... 29
ARTICLE 2. THE NOTES................................................................... 29
SECTION 2.01. FORM AND DATING..................................................... 29
SECTION 2.02. EXECUTION AND AUTHENTICATION........................................ 30
SECTION 2.03. REGISTRAR AND PAYING AGENT.......................................... 30
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST................................. 31
SECTION 2.05. HOLDER LISTS........................................................ 31
SECTION 2.06. TRANSFER AND EXCHANGE............................................... 31
SECTION 2.07. REPLACEMENT NOTES................................................... 44
SECTION 2.08. OUTSTANDING NOTES................................................... 44
SECTION 2.09. TREASURY NOTES...................................................... 44
SECTION 2.10. TEMPORARY NOTES..................................................... 45
SECTION 2.11. CANCELLATION........................................................ 45
SECTION 2.12. DEFAULTED INTEREST.................................................. 45
ARTICLE 3. REDEMPTION AND PREPAYMENT AND SATISFACTION AND DISCHARGE.................... 45
SECTION 3.01. NOTICES TO TRUSTEE.................................................. 45
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED................................... 46
SECTION 3.03. NOTICE OF REDEMPTION................................................ 46
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION...................................... 47
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE......................................... 47
SECTION 3.06. NOTES REDEEMED IN PART.............................................. 47
SECTION 3.07. OPTIONAL REDEMPTION................................................. 48
SECTION 3.08. MANDATORY REDEMPTION................................................ 48
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS................. 48
SECTION 3.10 SATISFACTION AND DISCHARGE........................................... 50
ARTICLE 4. COVENANTS................................................................... 51
SECTION 4.01. PAYMENT OF NOTES.................................................... 51
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY..................................... 51
SECTION 4.03. REPORTS............................................................. 52
SECTION 4.04. COMPLIANCE CERTIFICATE.............................................. 53
SECTION 4.05. TAXES............................................................... 53
SECTION 4.06. STAY, EXTENSION AND USURY LAWS...................................... 53
SECTION 4.07. RESTRICTED PAYMENTS................................................. 54
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES...... 59
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.......... 60
SECTION 4.10. LIMITATION ON FOREIGN INDEBTEDNESS.................................. 64
SECTION 4.11. ASSET SALES......................................................... 65
SECTION 4.12. TRANSACTIONS WITH AFFILIATES........................................ 67
SECTION 4.13. LIENS............................................................... 68
SECTION 4.14. BUSINESS ACTIVITIES................................................. 69
SECTION 4.15. CORPORATE EXISTENCE................................................. 69
SECTION 4.16. CHANGE OF CONTROL................................................... 69
SECTION 4.17. ANTI-LAYERING....................................................... 70
</TABLE>
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SECTION 4.18. ADDITIONAL GUARANTORS............................................... 71
SECTION 4.19. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES............. 71
SECTION 4.20. LIMITATION ON AMENDMENTS TO AGREEMENTS.............................. 71
SECTION 4.21. PAYMENTS FOR CONSENT................................................ 72
SECTION 4.22. CORPORATE OPPORTUNITIES............................................. 72
ARTICLE 5. SUCCESSORS.................................................................. 73
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS............................ 73
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED................................... 75
ARTICLE 6. DEFAULTS AND REMEDIES....................................................... 76
SECTION 6.01. EVENTS OF DEFAULT................................................... 76
SECTION 6.02. ACCELERATION........................................................ 78
SECTION 6.03. OTHER REMEDIES...................................................... 78
SECTION 6.04. WAIVER OF PAST DEFAULTS............................................. 79
SECTION 6.05. CONTROL BY MAJORITY................................................. 79
SECTION 6.06. LIMITATION ON SUITS................................................. 79
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT....................... 80
SECTION 6.07. COLLECTION SUIT BY TRUSTEE.......................................... 80
SECTION 6.08. TRUSTEE MAY FILE PROOFS OF CLAIM.................................... 80
SECTION 6.09. PRIORITIES.......................................................... 81
SECTION 6.10. UNDERTAKING FOR COSTS............................................... 81
ARTICLE 7 TRUSTEE..................................................................... 81
SECTION 7.01. DUTIES OF TRUSTEE................................................... 81
SECTION 7.02. RIGHTS OF TRUSTEE................................................... 82
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE........................................ 83
SECTION 7.04. TRUSTEE'S DISCLAIMER................................................ 83
SECTION 7.05. NOTICE OF DEFAULTS.................................................. 83
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.......................... 83
SECTION 7.07. COMPENSATION AND INDEMNITY.......................................... 84
SECTION 7.08. REPLACEMENT OF TRUSTEE.............................................. 85
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.................................... 86
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION....................................... 86
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST TRUST..................... 86
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.................................... 86
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE............ 86
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE...................................... 86
SECTION 8.03. COVENANT DEFEASANCE................................................. 87
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.......................... 87
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS...................................... 88
SECTION 8.06. REPAYMENT TO TRUST.................................................. 89
SECTION 8.07. REINSTATEMENT....................................................... 89
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER............................................ 90
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES................................. 90
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.................................... 91
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT................................. 92
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS................................... 92
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.................................... 93
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC..................................... 93
ARTICLE 10. SUBORDINATION.............................................................. 93
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SECTION 10.01. AGREEMENT TO SUBORDINATE........................................... 93
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY............................... 93
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.................................. 94
SECTION 10.04. ACCELERATION OF SECURITIES......................................... 95
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER................................ 95
SECTION 10.06. NOTICE BY TRUST.................................................... 95
SECTION 10.07. SUBROGATION........................................................ 95
SECTION 10.08. RELATIVE RIGHTS.................................................... 95
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY TRUST......................... 96
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE........................... 96
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT................................. 96
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.............................. 97
SECTION 10.13. AMENDMENTS......................................................... 97
ARTICLE 11. SUBSIDIARY GUARANTEES...................................................... 97
SECTION 11.01. GUARANTEE.......................................................... 97
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE.............................. 98
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.................................. 98
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE AND SUPPLEMENTAL
INDENTURE.......................................................... 99
ARTICLE 12. MISCELLANEOUS.............................................................. 99
SECTION 12.01. TRUST INDENTURE ACT CONTROLS....................................... 99
SECTION 12.02. NOTICES............................................................ 99
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES...... 101
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT................. 101
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...................... 101
SECTION 12.06. RULES BY TRUSTEE AND AGENTS........................................ 101
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS....................................................... 102
SECTION 12.08. GOVERNING LAW...................................................... 102
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...................... 102
SECTION 12.10. SUCCESSORS......................................................... 102
SECTION 12.11. SEVERABILITY....................................................... 102
SECTION 12.12. COUNTERPART ORIGINALS.............................................. 102
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC................................... 102
</TABLE>
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
EXHIBIT E FORM OF NOTE GUARANTEE
EXHIBIT F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
EXHIBIT G SPECIAL OPINION OF TAX COUNSEL
iii
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INDENTURE dated as of May 27, 1999 between the Venture Holdings Trust (the
"Trust"), and The Huntington National Bank, as trustee (the "Trustee").
The Trust and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 12% Senior
Subordinated Notes due 2009 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"1997 Senior Notes" means the 9 1/2% Senior Notes due 2005 issued under
that certain Indenture dated as of July 1, 1997 among the Trust and certain of
the Guarantors and The Huntington National Bank, as Trustee, as the same may be
amended from time-to-time.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness or Disqualified Stock of any other Person existing at
the time such other Person is merged with or into or became a Restricted
Subsidiary of such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Restricted Subsidiary of, such
specified Person; provided, however, that Indebtedness of such Person that
is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transaction by which such Person
becomes or merges with or into the Trust or a Subsidiary of the Trust shall
not be Acquired Debt; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person, provided, however, that any such Indebtedness that
is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transaction by which such asset is
acquired shall not be Acquired Debt.
"Acquisition" means the purchase of other acquisition of any Person or
substantially all the assets of any Person or line of business of such Person by
any other Person, whether by purchase, merger, consolidation, or other transfer,
and whether or not for consideration.
"Additional Notes" means up to $50 million aggregate principal amount of
Notes (other than the Initial Notes) issued under this Indenture in accordance
with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial
Notes.
<PAGE> 7
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings. No Person in whom a Receivables
Subsidiary makes an Investment in connection with a Qualified Receivables
Transaction will be deemed to be an Affiliate of the Trust or any of its
Subsidiaries solely by reason of such Investment.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of inventory in the ordinary course of business
consistent with either past practices or accepted business practices in the
industry; provided that the sale, conveyance or other disposition of all or
substantially all of the assets of the Trust and its Restricted
Subsidiaries taken as a whole shall be governed by the provisions of
Sections 4.16 and 5.01 hereof and not by the provisions of Section 4.11
hereof; and
(2) the issuance of Equity Interests in any of the Trust's Restricted
Subsidiaries or the sale of Equity Interests in any of their Restricted
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(2) a transfer of assets between or among the Trust and its Restricted
Subsidiaries;
(3) an issuance or transfer of Equity Interests by a Restricted
Subsidiary to the Trust or to another Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of equipment,
inventory, accounts receivable or other assets (including, without
limitation, the sale, lease, conveyance or other disposition of damaged,
worn-out or other obsolete property if such property is no longer necessary
for the proper conduct of the business of the Trust or such Restricted
Subsidiary) in the ordinary course of business;
2
<PAGE> 8
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07 hereof.
(7) sales of Receivables to a Receivables Subsidiary for the fair
market value thereof, including cash in an amount at least equal to 80% of
the book value thereof as determined in accordance with GAAP, it being
understood that, for the purposes of this clause (7), notes received in
exchange for the transfer of Receivables will be deemed cash if the
Receivables Subsidiary or other payor is required to repay said notes as
soon as practicable from available cash collections less amounts required
to be established as reserves pursuant to contractual agreements with
entities that are not Affiliates of the Trust or any of the Guarantors
entered into as part of a Qualified Receivables Transaction; and
(8) transfers of Receivables (or a fractional undivided interest
therein) by a Receivables Subsidiary in connection with a Qualified
Receivables Transaction.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Beneficiary" means (i) any beneficiary of the Trust while it is a trust or
(ii) any holders of the Equity Interests of a successor entity to the Trust;
provided that for any tax calculation or tax distribution herein, a Beneficiary
shall be any Person ultimately liable for the payment of taxes with respect to
the Trust's income.
"Board of Directors" means:
(1) either the board of directors, general partners or managers of the
Trust's Subsidiaries, or any duly authorized committee thereof; or
(2) in the case of the Trust, the Special Advisor of the Trust;
provided that (a) in the event the Special Advisor's rights, duties and
powers are assumed by the Successor Special Advisor Group, "Board of
Directors" means the Successor Special Advisor Group of the Trust and (b)
in the case of a successor entity to Venture Holdings Trust, "Board of
Directors" means the board of directors, general partners or managers of
the successor entity.
"Business Day" means any day other than a Legal Holiday.
3
<PAGE> 9
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation (other than non-voting
non-convertible Indebtedness) that confers on a Person the right to receive
a share of the profits and losses of, or distributions of assets of, the
issuing Person, including, without limitation, the beneficial interests of
a trust.
"Cash Equivalents" means:
(1) cash;
(2) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof);
(3) time deposits and certificates of deposit and commercial paper
issued by the parent corporation of any domestic commercial bank of
recognized standing having capital and surplus in excess of $250 million;
(4) commercial paper issued by others rated at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc.;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (3)
above;
(6) any money market deposit accounts including those of the Trustee
issued or offered by a domestic commercial bank having capital and surplus
in excess of $250 million;
(7) investments in money market funds which invest substantially all
their assets in securities of the type described in clauses (1), (2), (3)
and (4) above and in the case of (1), (2) and (3) maturing within one year
after the date of acquisition.
"Cedel" means Cedel Bank, SA.
4
<PAGE> 10
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Trust and its Restricted Subsidiaries, taken as
a whole, to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of the Trust;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than
40% of the Capital Stock of the Trust or the total voting power in the
aggregate normally entitled to vote in the election of directors, managers,
or trustees, as applicable, of the transferee(s) or surviving entity or
entities, measured by voting power rather than number of shares, but only
if the Principals and their Related Parties are the Beneficial Owners,
directly or indirectly, of less than a majority of the total voting power
in the aggregate normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the Trust or the transferee(s) or
surviving entity or entities, measured by voting power rather than number
of shares; or
(4) during any period of 12 consecutive months after the Issue Date,
individuals who at the beginning of any such 12-month period constituted
the Board of Directors of the Trust (together with any new directors whose
election by such Board or whose nomination for election by the equity
holders of the Trust, (A) with respect to Venture Holdings Trust was made
pursuant to the terms of the Venture Trust Instrument, and (B) with respect
to Venture Holdings Corporation or another successor to the Trust, or their
respective successors, after the occurrence of a Trust Contribution, (x)
was approved by the Beneficiary(ies) of Venture Holdings Trust on or before
the date of the Trust Contribution, or (y) was approved by a majority of
the directors of the Trust whose appointment, election or nomination to the
Board of Directors was approved in accordance with the preceding clause (x)
or by this clause (y)) cease for any reason to constitute a majority of the
Board of Directors of the Trust then in office.
Notwithstanding anything in this definition to the contrary, a "Change
of Control" shall not be deemed to have occurred solely as a result of a
transaction pursuant to which the Trust is reorganized or reconstituted as
a corporation or a Trust Contribution occurs in accordance with Section
5.01 hereof and no event which is otherwise a "Change of Control" shall
have occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
5
<PAGE> 11
(1) Michigan single business tax expense, to the extent deducted in
determining Consolidated Net Income; plus
(2) Trust Tax Distributions; plus
(3) provision for taxes based on income or profits of such Person and
their Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(4) consolidated interest expense of such Person and their Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the extent
that any such expense was deducted in computing such Consolidated Net
Income; plus
(5) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period (calculated in accordance with GAAP)) and other
non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a prior
period (calculated in accordance with GAAP)) of such Person and their
Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other
non-cash charges of, a Restricted Subsidiary of the Trust (collectively,
the "Add-Backs") shall be added (without duplication) to Consolidated Net
Income to compute Consolidated Cash Flow only (1) in the same proportion as
the Net Income of such Restricted Subsidiary was included in calculating
the Consolidated Net Income of the Trust and (2) only to the extent that
such proportional amount of such Add-Backs would be permitted at the date
of determination to be dividended, distributed or otherwise paid, directly
or indirectly to the Trust by such Restricted Subsidiary without prior
approval (that has not been obtained) and not in violation of the terms of
its charter or any other agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders and such dividend, distribution
or other payment is not subject to the right of any Person to the right of
repayment, avoidance, set off or similar right; provided that, if such
dividend, distribution or other payment does not meet such requirements at
such date, such Add-Backs shall be added to Consolidated Net Income to
compute Consolidated Cash Flow but only if such dividend, distribution or
other payment was actually made during the applicable period without the
required prior approval of any Person or governmental authority and was not
made in violation of such Restricted
6
<PAGE> 12
Subsidiary's charter or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders and such dividend, distribution
or other payment is not subject to the right of any Person to the right of
repayment, avoidance, set-off or similar right.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and their Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; provided, that if such
declaration or payment is not permitted at such date, such Net Income shall
nevertheless be included if such declaration and payment were made during
the applicable period without the prior required approval of any Person or
governmental authority and were not made in violation of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental resolution applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) Trust Tax Distributions to the extent not already deducted shall
be excluded; and
(5) the cumulative effect of a change in accounting principles shall
be excluded.
In addition, solely for purposes of the covenant described under
Section 4.07 hereof, Consolidated Net Income shall include, without
duplication of amounts included above, (A) the amount of dividends or other
distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof by an Unrestricted Subsidiary but only to the extent of
the Consolidated Net Income of such Unrestricted Subsidiary for the period
beginning on the first day of the fiscal quarter commencing immediately
after such Unrestricted Subsidiary became an Unrestricted Subsidiary and
ending on the last day of the fiscal quarter for which financial statements
are available immediately preceding the date of such dividend or other
distribution and (B) Net Income of a Restricted Subsidiary earned by such
Restricted Subsidiary during the period beginning on the first day of the
first fiscal quarter commencing after the Issue Date and ending on the
last day of the Trust's fiscal quarter for which financial statements are
available immediately preceding
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the date of determination to the extent that (x) such Net Income was
previously excluded from Consolidated Net Income by reason of clause (2) of
this definition and (y) as of such date of determination, such Restricted
Subsidiary may declare and pay dividends or similar distributions without
any prior governmental approval (that has not been obtained) and not in
violation of its charter or any other agreement, covenant, instrument,
decree, order, statute, rule or governmental regulating applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Net Worth" means, with respect to any specified Person as of
any date, the sum of:
(1) the consolidated equity of the holders of Capital Stock or the
trust principal of such Person and its consolidated Restricted Subsidiaries
as of such date; plus
(2) the respective amounts reported on such Person's balance sheet as
of such date with respect to any series of Preferred Stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only
to the extent of any cash received by such Person upon issuance of such
Preferred Stock.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Trust.
"Credit Agreement" means that certain Credit Agreement, dated as of May 27,
1999, by and among the Trust, the lenders referred to therein and The First
National Bank of Chicago, as agent, providing for up to $575 million of
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith from time to time,
and in each case as amended, modified, renewed, refunded, replaced or refinanced
from time to time, including, without limitation, any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder in a manner not in
violation of the Indenture) or adding Restricted Subsidiaries as additional
borrowers or guarantors thereunder.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement), commercial paper facilities or other issues
of debt securities, in each case with, or issued to, banks or other
institutional lenders (including QIBs or "accredited investors," as defined in
Rule 501(a) (1), (2), (3) or (7) under the Securities Act) providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables), letters of credit or other
evidences of indebtedness, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
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"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means:
(1) any Senior Debt outstanding under the Credit Agreement and the
1997 Senior Notes; and
(2) after payment in full of all Obligations under the Credit
Agreement and the 1997 Senior Notes, any other Senior Debt permitted under
this Indenture the principal amount of which is $25.0 million or more and
that has been designated by the Trust as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock governed by this Indenture
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes hereunder mature.
Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Trust to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Trust may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of Capital Stock of the Trust for cash.
"Euroclear" means Morgan Guaranty Trust of New York, Brussels office, as
operator of the Euroclear system.
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<PAGE> 15
"Event of Loss" means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset which exceeds $15 million or
(ii) any condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such property or asset, or confiscation or requisition
of use of such property or asset, which impairs the value of such property or
asset in an amount exceeding $15 million as determined in good faith by the
Fairness Committee of the Trust.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Trust and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date, until such amounts are repaid.
"Fairness Committee" means a committee duly established pursuant to the
Venture Trust Instrument and the bylaws of each other Guarantor, Restricted
Subsidiary and any successor to Venture Holdings Trust without whose approval
(and without the approval of a majority of its Independent members) the Trust, a
Guarantor or a Restricted Subsidiary shall not be authorized to enter into any
transaction or take any action which pursuant to the terms of this Indenture
requires approval of the Fairness Committee.
"Fixed Charges" means, with respect to any specified Person and their
Restricted Subsidiaries for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and their
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and their Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of their Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of their Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon; plus
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(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Preferred Stock of such Person or
any of their Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Trust (other than
Disqualified Stock) or to the Trust or a Restricted Subsidiary of the
Trust, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person and its Restricted
Subsidiaries, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
and its Restricted Subsidiaries for any period, the ratio of the Consolidated
Cash Flow of such Person for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period, calculated on a Pro Forma Basis. In
the event that the specified Person or any of their Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or
redeems Preferred Stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated and on or prior to the date
on which the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving Pro Forma Effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of Preferred Stock, and the use of the proceeds
therefrom as if the same had occurred at the beginning of the applicable
Reference Period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
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(1) Vemco, Inc., Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company, Venture Mold &
Engineering Corporation, Venture Service Company, Venture Europe, Inc., Venture
EU Corporation, Venture Holdings Company LLC and Experience Management LLC; and
(2) any other subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of the Indentures;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements, interest rate exchange agreements and
currency exchange agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or currency or commodity values,
including, without limitation, any arrangement whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or floating rate of interest on the
same notional amount.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, without duplication, with respect to any specified
Person, any indebtedness of such Person, whether or not contingent, in respect
of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) representing any Hedging Obligations,
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if and to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any
Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Independent" means, with respect to the Trust or any of its Restricted
Subsidiaries, a Person who would qualify as an "independent director" within the
meaning of the rules of the New York Stock Exchange and who (i) shall not
receive any payment or other fees for services to the Trust or any of its
Affiliates (other than for serving as a member of the Fairness Committee of the
Trust or of a Subsidiary of the Trust) and (ii) shall not be an Affiliate,
officer, member or employee of any firm, company or other entity that has
performed services for the Trust or any of its Affiliates during the proceeding
three fiscal years or that the Trust or any of its Affiliates proposes to have
perform services if the amount of compensation for such services during any
fiscal year exceeded or would exceed 5% of such firm's gross revenues during any
of its three preceding fiscal years.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $125 million aggregate principal amount of
Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means Banc One Capital Markets, Inc. and Goldman Sachs
& Co.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, and is not also a QIB.
"Investments" means, without duplication, with respect to any Person, all
direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers, employees, independent contractors or other third parties
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If
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the Trust or any Restricted Subsidiary of the Trust sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Trust such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of the Trust, the Trust shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 hereof.
"Issue Date" means the date of the first issuance of the Notes under this
Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Trust and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in (except in connection with any Qualified Receivables Transaction)
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction (except in
connection with any Qualified Receivables Transaction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 4 of the Registration Rights Agreement.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such Person or any of their Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or
any of their Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash or Cash Equivalent proceeds
received by the Trust or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable
(including, without limitation, Trust Tax Distributions in respect thereof) as a
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, and
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amounts required to be applied to the repayment of Indebtedness, other than
Senior Debt, secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"New Senior Notes" means the 11% Senior Notes due 2007 issued under that
certain Indenture dated as of the Issue Date among the Trust and the Guarantors
and the Trustee.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Trust nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender, other than, in each case, pursuant to an Investment
in an Unrestricted Subsidiary not in violation of the Indenture;
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness of the Trust or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Trust or any of
its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness, in all cases whether now
outstanding or hereafter created, assumed or incurred in connection therewith
and including without limitation, interest accruing subsequent to the filing of
the petition in bankruptcy at the rate provided in the relevant document,
whether or not an allowed claim.
"Officer" means, with respect to any Person, the Manager, the General
Partner, the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or
any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Trust
by two Officers of the Trust, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Trust, that meets the requirements of Section 12.05
hereof.
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"Operating Expense or Cost Reduction" means, with respect to the
calculation of a Fixed Charge Coverage ratio on a Pro Forma Basis, an operating
expense or cost reduction with respect to an Acquisition, which, in the good
faith estimate of management, will be realized as a result of such Acquisition,
provided that the forgoing eliminations of operating expenses and realizations
of cost reductions shall be of the types permitted to be given effect to in
accordance with Article 11 of regulation S-X under the Exchange Act as in effect
on the Issue Date and such reduction is subject to negative comfort by the
Trust's independent public accountants.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Trust, any Subsidiary of the
Trust or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Permitted Business" means the business conducted (or proposed to be
conducted) by the Trust and its Restricted Subsidiaries as of the Issue Date and
any and all businesses that in the good faith judgment of the Board of Directors
of the Trust are reasonably related businesses.
"Permitted Investments" means:
(1) any Investment in the Trust or in a Restricted Subsidiary of the
Trust;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Trust or any Restricted Subsidiary of the
Trust in a Person (other than a Receivables Subsidiary), if as a result of
such Investment:
(a) such Person becomes a Restricted Subsidiary of the Trust; 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 Trust or a Restricted Subsidiary of the Trust;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under Section 4.11 hereof.
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Trust;
(6) Hedging Obligations;
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(7) loans or advances to employees, officers, independent contractors
and other third parties of the Trust and its Restricted Subsidiaries in the
ordinary course of business for bona fide business purposes;
(8) Investments in securities of trade creditors or customers received
pursuant to any plan or reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(9) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (9) not to exceed $25
million; and
(10) the acquisition by a Receivables Subsidiary in connection with a
Qualified Receivables Transaction of Equity Interests of a trust or other
Person established by such Receivables Subsidiary to effect such Qualified
Receivables Transaction; and any other Investment by the Trust or a
Subsidiary of the Trust in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person, in connection with a Qualified
Receivables Transaction, provided that each such other Investment is in the
form of a note or other instrument that the Receivables Subsidiary or other
Person is required to repay as soon as practicable from available cash
collections less amounts required to be established as reserves pursuant to
contractual agreements with entities that are not Affiliates of the Trust
entered into as part of a Qualified Receivables Transaction.
"Permitted Junior Securities" means:
(1) Equity Interests in the Trust or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any
debt securities issued in exchange for Senior Debt to substantially the
same extent as, or to a greater extent than, the Notes and the Subsidiary
Guarantees thereof are subordinated to Senior Debt under this Indenture.
"Permitted Liens" means:
(1) Liens of the Trust and any Guarantor securing Indebtedness and
other Obligations securing Senior Debt that was permitted by the terms of
this Indenture to be incurred;
(2) Liens in favor of the Trust or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Trust or any Restricted
Subsidiary of the Trust; provided that such Liens were not incurred in
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Trust or the Restricted Subsidiary;
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(4) Liens on property existing at the time of acquisition thereof by
the Trust or any Restricted Subsidiary of the Trust, provided that such
Liens were not incurred in contemplation of such acquisition;
(5) Liens to secure the performance of bids, trade contracts (other
than advanced money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (5) of the second paragraph of Section 4.09 hereof
covering only the assets acquired with such Indebtedness;
(7) Liens existing on the Issue Date;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(9) statutory liens of carriers, warehousemen, mechanics, materialmen,
landlords, repairmen or other like Liens arising by operation of law in the
ordinary course of business, provided that (i) the underlying obligations
are not overdue for a period of more than 60 days, or (ii) such Liens are
being contested in good faith and by appropriate proceedings and adequate
reserves with respect thereto are maintained on the books of the Trust in
accordance with GAAP;
(10) easements, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title defects which, singly or in the aggregate, do
not in any case materially detract from the value of the property subject
thereto (as such property is used by the Trust or any of its Restricted
Subsidiaries) or interfere with the ordinary conduct of the business of the
Trust or any of its Restricted Subsidiaries;
(11) Liens arising by operation of law in connection with court orders
and judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default with respect thereto;
(12) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security legislation;
(13) Liens securing the Notes;
(14) leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Trust or any of its Restricted Subsidiaries or materially
detracting from the value of the relative assets of the Trust or any
Restricted Subsidiary;
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(15) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Trust or any of its Subsidiaries in the ordinary course of business;
(16) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness that was previously so secured in a manner no more adverse to
the Holders of the Notes than the terms of the Liens securing such
refinanced Indebtedness, provided that the Indebtedness secured is not
increased and the lien is not extended to any additional assets or property
unless the Notes are equally and ratably secured by such additional assets
or the additional assets were acquired after the Issue Date;
(17) additional Liens incurred in the ordinary course of business of
the Trust or any Subsidiary of the Trust with respect to obligations that
do not exceed $5.0 million at any one time outstanding;
(18) Liens on assets of a Restricted Subsidiary that is not a
Guarantor securing Indebtedness of such Restricted Subsidiary that was
permitted to be incurred under clause (14) of the second paragraph of
Section 4.09 hereof; and
(19) Liens on assets of a Receivables Subsidiary incurred in
connection with a Qualified Receivables Transaction.
"Permitted Preferred Stock" means any Preferred Stock of the Trust or any
of its Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, amend, restate, refinance, renew, replace or refund
other Preferred Stock of the Trust or any of its Restricted Subsidiaries (other
than intercompany Preferred Stock); provided that:
(1) the liquidation preference of such Permitted Preferred Stock does
not exceed the liquidation preference of the Preferred Stock so extended,
refinanced, renewed, replaced or refunded (plus all accrued dividends
thereon and the amount of all expenses and premiums incurred in connection
therewith);
(2) such Permitted Preferred Stock has a final maturity date (or
redemption date, as applicable) later than the final maturity date (or
redemption date, as applicable) of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Preferred Stock being extended, refinanced, renewed, replaced, or
refunded;
(3) if the Preferred Stock being extended, refinanced, renewed,
replaced, defeased or refunded is Disqualified Stock, such Permitted
Preferred Stock has a redemption, maturity, repurchase or other required
payment (other than dividend payments) no earlier than the earliest
redemption, maturity, repurchase or other required payment (other than
dividend payments) of the Preferred Stock being extended, refinanced,
renewed, replaced, defeased or refunded;
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<PAGE> 25
(4) such Preferred Stock is issued either by the Trust or by the
Subsidiary who is the issuer on the Preferred Stock being extended,
refinanced, renewed, replaced, or refunded; and
(5) Permitted Preferred Stock constituting Disqualified Stock may only
be issued if the Preferred Stock being extended, refinanced, renewed,
replaced or refunded constitutes Disqualified Stock.
"Permitted Refinancing Indebtedness" means any Indebtedness or Preferred
Stock (other than Disqualified Stock) of the Trust or any of its Restricted
Subsidiaries issued in exchange for, or the net proceeds of which are used to
extend, amend, restate, refinance, renew, replace, defease or refund other
Indebtedness of the Trust or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value or liquidation preference,
if applicable) of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus all
accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Notes on terms at least as favorable to the Holders of the Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred or such Preferred Stock is issued
either by the Trust or by the Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, or government or other entity.
"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 or any other payments of such Person over
the holders of other Capital Stock issued by such Person.
"Principals" means Larry J. Winget.
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<PAGE> 26
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"Pro Forma Basis" or "Pro Forma Effect" means, for purposes of calculating
the Fixed Charge Coverage Ratio, giving pro forma effect to certain transactions
such that:
(1) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Calculation Date
shall be assumed to have occurred on the first day of the Reference Period
and any Operating Expense or Cost Reduction with respect to such
Acquisition shall be deducted from such calculation;
(2) transactions giving rise to the need to calculate the Fixed Charge
Coverage Ratio shall be assumed to have occurred on the first day of the
Reference Period;
(3) the incurrence of any Indebtedness or issuance of any Disqualified
Stock during the Reference Period or subsequent to the Reference Period and
on or prior to the Calculation Date (and the application of the proceeds
therefrom, including to refinance or retire other Indebtedness) shall be
assumed to have occurred on the first day of such Reference Period (except
that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based on the average daily
balance during the Reference Period);
(4) the Fixed Charges of such Person attributable to interest on any
Indebtedness or dividends on any Disqualified Stock bearing a floating
interest (or dividend) rate shall be computed on a Pro Forma Basis as if
the average rate in effect from the beginning of the Reference Period to
the Calculation Date had been the applicable rate for the entire period,
unless such Person or any of its Restricted Subsidiaries is a party to a
Hedging Obligation (which shall remain in effect for the 12-month period
immediately following the Calculation Date) that has the effect of fixing
the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used;
(5) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(6) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"QIB" means a "Qualified Institutional Buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Trust or any of its Subsidiaries pursuant to
which the Trust or any of its Subsidiaries sells, conveys or otherwise transfers
to (i) a Receivables Subsidiary (in the case of a
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<PAGE> 27
transfer by the Trust or any of its Subsidiaries) and (ii) any other Person (in
the case of a transfer by a Receivables Subsidiary), or grants a security
interest in, any Receivables, whether now existing or arising in the future, of
the Trust or any of its Subsidiaries.
"Receivables Debt" means Indebtedness (i) as to which neither the Trust nor
any of its Subsidiaries (other than the Receivables Subsidiary) (a) provides any
credit support that would constitute Indebtedness or (b) is directly or
indirectly liable (as a guarantor or otherwise); and (ii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of any of the Trust or any of its Subsidiaries (other than
the Receivables Subsidiary); provided that, notwithstanding the foregoing, the
Trust and any of its Subsidiaries that sell Receivables to the Receivables
Subsidiary shall be allowed to provide such representations, warranties,
covenants and indemnities as are customarily required in such transactions so
long as no such representations, warranties, covenants or indemnities constitute
a Guarantee of payment or recourse against credit losses.
"Receivables" means accounts receivable and all other assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and all other
assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable.
"Receivables Facility" means one or more receivables financing facilities,
as amended from time to time, pursuant to which the Trust or any of its
Subsidiaries sells its accounts receivable to a Receivables Subsidiary.
"Receivables Subsidiary" means a Subsidiary of the Trust, created primarily
to purchase or finance the receivables of the Trust and/or its Subsidiaries
pursuant to a Receivables Facility, so long as it: (a) has no Indebtedness other
than Receivables Debt; (b) is not party to any agreement, contract, arrangement
or understanding with any of the Trust or any other Subsidiary of the Trust
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Trust or such Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of any of the Trust or
a Guarantor; (c) is a Person with respect to which neither the Trust nor any of
its Subsidiaries has any direct obligation to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (d) has not Guaranteed or otherwise directly provided
credit support for any Indebtedness of any of the Trust or any of its
Subsidiaries. Notwithstanding the foregoing, the Trust and the Guarantors may
make capital contributions in the form of Receivables transferred to the
Receivables Subsidiary for non-cash consideration to the extent necessary or
desirable to prevent a disruption of purchases of Receivables or to avoid a
default under the Receivables Facility. If, at any time, such Receivables
Subsidiary would fail to meet the foregoing requirements as a Receivables
Subsidiary, it shall thereafter cease to be a Receivables Subsidiary for
purposes of this Indenture and any Indebtedness of such Receivables Subsidiary
shall be deemed to be incurred by a Subsidiary of the Trust as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.09 hereof, the Trust shall be in default of such provision).
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<PAGE> 28
"Reference Period" with regard to any Person means the four full fiscal
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Notes or this Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Trust and the Initial Purchasers,
as such agreement may be amended, modified or supplemented from time to time,
and, with respect to any Additional Notes, one or more registration rights
agreements between the Trust and the other parties thereto, as such agreement(s)
may be amended, modified or supplemented from time to time, relating to rights
given by the Trust to the purchasers of Additional Notes to register such
Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Permanent Global Note in
the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend.
"Related Party" means Larry J. Winget's estate or legal representative,
members of his immediate family and all lineal descendants of Larry J. Winget
and all spouses of such lineal descendants (or any trust(s) or entity(ies) whose
sole beneficiaries or holders of Equity Interests, or the holders of a majority
of the outstanding Voting Stock are any one or more of the foregoing).
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer or other employee to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if and
for so long as any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
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<PAGE> 29
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(1) all Indebtedness of the Trust or any Guarantor outstanding under
Credit Facilities that is not expressly subordinated by its terms to any
other Indebtedness of the Trust or such Guarantor, the New Senior Notes and
the 1997 Senior Notes and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of the Trust or any Guarantor permitted to
be incurred under the terms of this Indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes or any
Subsidiary Guarantee thereof; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:
(1) any liability for federal, state, local or other taxes owed or
owing by the Trust and the Guarantors;
(2) any Indebtedness of the Trust or Guarantors to any of their
Subsidiaries or other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of
this Indenture.
"Senior Guarantees" means the Guarantees by the Guarantors of Obligations
under the Senior Debt.
"Shelf Registration" means the Shelf Registration as defined in the
Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
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"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means a Guarantee by a Subsidiary on a senior
subordinated basis of the Trust's payment obligations under the Notes and this
Indenture in the form attached hereto as Exhibit E.
"Tax Distribution Amount" means, in respect of any period after the Issue
Date during which the Trust is a Pass-Through Entity for federal income tax
purposes, an amount, determined in good faith by the Trust's independent public
accountants, which shall be a nationally recognized accounting firm, equal to
the sum of (x) the amount of intangibles tax actually imposed on each
Beneficiary of the Trust in respect of Trust Tax Distributions for such period
and (y) (a) the sum of the highest marginal federal income tax rate and highest
state and local income tax rate applicable to a Beneficiary of the Trust on
income of the Investee Companies which are Pass-Through Entities for federal,
state or local income tax purposes for such period, expressed as a percentage,
multiplied by (b) such Investee Companies' taxable income for such period
computed taking into account, without limitation, the deduction for single
business and franchise tax actually imposed on such Investee Companies; provided
that (i) the foregoing shall be determined by giving effect to the deduction of
relevant state and local income and intangibles taxes for purposes of
determining federal income taxes, such deduction to be computed based on the
state and local income tax rates applicable in clause (y) (a) hereof and the
amount of intangibles tax determined under clause (x) hereof, and (ii) the
foregoing shall be appropriately reduced by the amount of cumulative tax losses
of such Investee Companies from any previous period (to the extent not
previously utilized in computing the Tax Distribution Amounts) since the Issue
Date and any investment tax credits and other tax credits of such Investee
Companies since the Issue Date.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
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<PAGE> 31
"Trust" means (1) Venture Holdings Trust, a trust organized under the laws
of the State of Michigan, (2) Venture Holdings Corporation (after the occurrence
of a Trust Contribution) or (3) any successor Person to Venture Holdings Trust
or Venture Holdings Corporation (after the occurrence of a Trust Contribution)
in accordance with Section 5.01 hereof.
"Trustee" means the party named as such in the recitals hereto until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Trust that is
designated by the Board of Directors of the Trust as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Trust or any Restricted Subsidiary of the Trust
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Trust or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Trust;
(3) is a Person with respect to which neither the Trust nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results other than an Investment made in such
Subsidiary not in violation of the Indenture; and
(4) is not guaranteeing or otherwise directly or indirectly providing
credit support for any Indebtedness of the Trust or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Trust as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation
and an Officers' Certificate certifying that such designation complied with
the preceding conditions and was permitted by the covenant described above
under Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted
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<PAGE> 32
Subsidiary of the Trust as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under the covenant described under
Section 4.09 hereof, the Trust shall be in default of such covenant. The
Board of Directors of the Trust may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation
shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Trust of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1)
such Indebtedness is permitted under Section 4.09 hereof calculated on a
Pro Forma Basis as if such designation had occurred at the beginning of the
Reference Period; and (2) no Default or Event of Default would be in
existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"Venture Trust Instrument" means the Agreement, dated December 28, 1987, as
amended and restated on February 16, 1994, as amended, among Larry J. Winget, as
Trustee, and Larry J. Winget, as Settlor, Beneficiary and Special Advisor, as
such agreement may be amended in accordance with the terms of this Indenture.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or Preferred Stock at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, or liquidation preference, as applicable,
including payment at final maturity, in respect thereof, by (b) the number
of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount, or liquidation preference,
as applicable, of such Indebtedness or Preferred Stock, as the case may be,
of such Indebtedness.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined
in
Term Section
---- -------
<S> <C>
"Acceleration Notice" ............................. 6.02
"Actual Tax Amount" ............................... 4.07
"Add-Backs" ....................................... 1.01
"Affiliate Transaction" ........................... 4.12
"Asset Sale Offer" ................................ 3.09
"Authentication Order" ............................ 2.02
"Business Opportunity" ............................ 4.22
"Change of Control Offer" ......................... 4.16
</TABLE>
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<PAGE> 33
<TABLE>
<CAPTION>
Defined
in
Term Section
---- -------
<S> <C>
"Change of Control Payment" ....................... 4.16
"Change of Control Payment Date" .................. 4.16
"Commencement Date" ............................... 4.07
"Covenant Defeasance" ............................. 8.03
"Distributed Amounts" ............................. 4.07
"DTC" ............................................. 2.03
"Entity-in-Issue" ................................. 4.07
"Event of Default" ................................ 6.01
"Excess Proceeds" ................................. 4.11
"incur" ........................................... 4.09
" Investee Companies" ............................. 4.04
"Legal Defeasance" ................................ 8.02
"Offer Amount" .................................... 3.09
"Offer Period" .................................... 3.09
"Pass-Through Entity" ............................. 4.04
"Paying Agent" .................................... 2.03
"Payment Blockage Notice" ......................... 10.03
"Payment Default" ................................. 6.01
"Permitted Debt" .................................. 4.09
"Purchase Date" ................................... 3.09
"Registrar" ....................................... 2.03
"Restricted Payments" ............................. 4.07
"Tax Income" ...................................... 4.07
"Trust Contribution" .............................. 5.01
"Trust Tax Distributions" ......................... 4.04
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
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<PAGE> 34
"obligor" on the Notes and the Subsidiary Guarantees means the Trust and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Trust, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached hereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note
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<PAGE> 35
Legend thereon and without the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Permanent Global Notes that are held by
Participants through Euroclear or Cedel Bank.
Section 2.02. Execution and Authentication.
An Officer shall sign the Notes for the Trust by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture. The Trustee shall, upon a written order of
the Trust signed by one Officer (an "Authentication Order"), authenticate Notes
for original issue up to the aggregate principal amount stated in paragraph 4 of
the Notes. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Trust to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Trust.
Section 2.03. Registrar and Paying Agent.
The Trust shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The Trust
may appoint one or more co-registrars and one or more additional paying agents.
The term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional paying agent. The Trust may change any Paying Agent or
Registrar without notice to any Holder. The Trust shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If
the Trust fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Trust or any of its Subsidiaries may
act as Paying Agent or Registrar.
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The Trust initially appoints The Depository Trust Company("DTC") to act as
Depositary with respect to the Global Notes.
The Trust initially appoints the Trustee to act as the Registrar and Paying
Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, and will notify
the Trustee of any default by the Trust in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Trust at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Trust or a Subsidiary) shall have no further
liability for the money. If the Trust or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Trust, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Trust shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Trust shall otherwise comply with TIA ss. 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Trust for Definitive Notes if (i) the Trust delivers to the Trustee notice
from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Trust within 120 days after the date of such notice from the Depositary or (ii)
the Trust in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a
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Global Note or any portion thereof, pursuant to this Section 2.06, Section 2.07
or 2.10 hereof, shall be authenticated and delivered in the form of, and shall
be, a Global Note. A Global Note may not be exchanged for another Note other
than as provided in this Section 2.06(a), however, beneficial interests in a
Global Note may be transferred and exchanged as provided in Section 2.06(b), (c)
or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Trust in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
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(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
Holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Trust;
(B) such transfer is effected pursuant to the Shelf Registration
in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a
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beneficial interest in an Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the Holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note has not yet been issued, the Trust shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the aggregate principal amount
of beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any Holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C)if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule
904 under
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the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the Trust
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Trust shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions
a Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or
denominations as the Holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A Holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A)such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
Holder of such beneficial interest, in the case of an exchange, or the
transferee, in
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the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Trust;
(B) such transfer is effected pursuant to the Shelf Registration
in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the Holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any Holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Trust shall execute and the Trustee
shall authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii)
shall be registered in such name or names and in such authorized denomination or
denominations as the Holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any
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Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant
to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the
Trust or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G)if such Restricted Definitive Note is being transferred pursuant to
an effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
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the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Trust;
(B) such transfer is effected pursuant to the Shelf Registration in
accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
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Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time
when an Unrestricted Global Note has not yet been issued, the Trust shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C)if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
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(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Trust;
(B) any such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Trust to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Trust shall issue and, upon receipt
of an Authentication
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Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or
more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not Broker-Dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Trust, and accepted for exchange in the Exchange
Offer and (ii) Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Trust shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend
in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY,
REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT PRIOR TO SUCH
TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES A LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THE NOTES),
(C) IN A TRANSACTION
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MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
CERTIFICATES AND AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), AS LONG AS
THE REGISTRAR RECEIVES A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF
COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTION SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III)
THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such
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other Global Note shall be increased accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Trust
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Trust's order or at the Registrar's request.
(ii) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Trust may require payment of
a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 3.09, 4.11, 4.16 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Trust, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Trust shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between an interest payment record date and the
next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Trust may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Trust shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
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(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Trust and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Trust shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Trust, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Trustee
and the Trust to protect the Trust, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Trust may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Trust and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Trust or an Affiliate of the Trust holds the
Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Trust, a Subsidiary or an Affiliate of
any thereof) holds, on a redemption date or maturity date, money sufficient to
pay Notes payable on that date, then on and after that date such Notes shall be
deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Trust, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Trust, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
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Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Trust may
prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Trust considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Trust shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
Section 2.11. Cancellation.
The Trust at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Trust. The Trust may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Trust defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Trust shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Trust shall fix or cause to be fixed each such special
record date and payment date, provided that no such special record date shall be
less than 10 days prior to the related payment date for such defaulted interest.
At least 15 days before the special record date, the Trust (or, upon the written
request of the Trust, the Trustee in the name and at the expense of the Trust)
shall mail or cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be
paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT AND SATISFACTION AND DISCHARGE
Section 3.01. Notices to Trustee.
If the Trust elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
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Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes issued under this Indenture are to be
redeemed at any time, the Trustee shall select Notes for redemption as follows:
(1) if the Notes are listed, in compliance with the requirements of
the principal national securities exchange on which the Notes are listed;
or
(2) if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate.
In the event of partial redemption by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption. The Trustee shall
promptly notify the Trust in writing of the Notes selected for redemption and,
in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes selected shall be in amounts
of $1,000 or whole multiples of $1,000; except that if all of the Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Trust shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note in principal amount equal to the unredeemed
portion of the original Note shall be issued in the name of the Holder thereof
upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Trust defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
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(g) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.
At the Trust's request, the Trustee shall give the notice of redemption in
the Trust's name and at its expense; provided, however, that the Trust shall
have delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to a redemption date, the Trust shall deposit
immediately available funds with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date. The Trustee or the Paying Agent shall promptly return
to the Trust any money deposited with the Trustee or the Paying Agent by the
Trust in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
If the Trust complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Trust to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Trust shall issue
and, upon the Trust's written request, the Trustee shall authenticate for the
Holder at the expense of the Trust a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
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Section 3.07. Optional Redemption.
(a) Except as set forth in Section 3.07(b), the Trust shall not have the
option to redeem the Notes pursuant to this Section 3.07 prior to June 1, 2004.
Thereafter, the Notes will be subject to redemption at any time at the option of
the Trust, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on June 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004 106.000%
2005 104.000%
2006 102.000%
2007 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of Section 3.07(a), at any time on or
before June 1, 2002, the Trust may redeem up to 35% of the aggregate principal
amount of Notes originally issued under this Indenture at a redemption price
equal to 112.000% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any to the redemption date,
with the net cash proceeds from a public Equity Offering; provided that:
(1) at least 65% in aggregate principal amount of each of the Notes
originally issued remain outstanding immediately after the occurrence of
such redemption (excluding Notes held by the Trust and its Subsidiaries);
and
(2) such redemption shall occur within 120 days of the date of the
closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Trust shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.11 hereof, the Trust shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of twenty (20) Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
ten (10) Business Days after the
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termination of the Offer Period (the "Purchase Date"), the Trust shall purchase
the principal amount of Notes required to be purchased pursuant to Section 4.11
hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered,
all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Trust shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.11 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrete or accrue interest;
(d) that, unless the Trust defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000
only;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Trust, a depositary, if appointed by the
Trust, or a Paying Agent at the address specified in the notice at least three
days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the Trust,
the depositary or the Paying Agent, as the case may be, receives, not later than
the expiration of the Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders
exceeds the Offer Amount, the Trust shall select the Notes to be purchased on a
pro rata basis (with such
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adjustments as may be deemed appropriate by the Trust so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Trust shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Trust in accordance with the
terms of this Section 3.09. The Trust, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Trust for purchase, and the Trust shall promptly issue a new Note, and the
Trustee, upon written request from the Trust shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Trust to the Holder thereof. The Trust shall
publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
Section 3.10 Satisfaction and Discharge
This Indenture shall be discharged and shall cease to be of further effect
as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated hereunder (except lost, stolen
or destroyed Notes that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(b) all Notes authenticated under this Indenture that have not been
delivered to the Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will become due and
payable within one year and the Trust or any Guarantor has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on such Notes not delivered to the Trustee for cancellation
for principal, premium and Liquidated Damages, if any, and accrued interest to
the date of maturity or redemption;
(2) no Default or Event of Default under Article 6 hereof shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit shall not result in a breach or
violation of, or constitute a default under, any other
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instrument to which the Trust or any Guarantor is a party or by which the Trust
or any Guarantor is bound;
(3) the Trust or the Guarantors have paid or caused to be paid all sums
payable by them under this Indenture; and
(4) the Trust has delivered irrevocable instructions to the Trustee under
the relevant Indenture to apply the deposited money toward the payment of such
Notes at maturity or the redemption date or upon delivery for cancellation, as
the case may be.
In addition, the Trust must deliver an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Trust shall pay or cause to be paid the principal of, premium, if any,
and interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, if other than the Trust or a Subsidiary thereof, holds
as of 10:00 a.m. Eastern Time on the due date money deposited by the Trust in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Trust shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Trust shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on such payment for the
intervening period.
Section 4.02. Maintenance of Office or Agency.
The Trust shall maintain in the Borough of Manhattan, the City of New York,
an office or agency (which may be an office of the Trustee or an agent of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Trust in respect of the Notes and this Indenture may be served. The
Trust 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 Trust shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
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The Trust may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Trust of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes. The Trust shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Trust hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Trust in accordance with Section 2.03.
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Trust shall furnish to the Holders of
Notes, within fifteen days after the time periods specified in the SEC's rule
and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Trust were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual information only, a report thereon by the
Trust's certified independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Trust were required to file such reports. In
addition, following consummation of the Exchange Offer, whether or not
required by the rules and regulations of the SEC, the Trust shall file a
copy of all such information and reports with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC shall not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Trust shall at all times comply with TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, the Trust and the
Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
If the Trust has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Trust
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Trust.
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Section 4.04. Compliance Certificate.
(a) The Trust and any Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Trust and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Trust has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Trust has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Trust is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Trust is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) shall be accompanied by a
written statement of the Trust's independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Trust has violated any
provisions of Sections 4.07, 4.09, 4.10 and 4.11 hereof, but only with respect
to financial and accounting matters at year end, or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Trust shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Trust is taking or proposes to take with respect
thereto.
Section 4.05. Taxes.
The Trust shall pay, and shall cause each of its Subsidiaries to pay, prior
to delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Trust and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the
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Trust and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Trust's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Trust or any
of its Restricted Subsidiaries), or to the direct or indirect holders of
the Trust's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Trust or to the
Trust or a Restricted Subsidiary of the Trust);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Trust) any Equity Interests of the Trust or any
direct or indirect parent of the Trust;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Subsidiary Guarantees, except a payment of
interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments");
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(2) the Trust would, at the time of such Restricted Payment and after
giving Pro Forma Effect thereto as if such Restricted Payment had been made
at the beginning of the applicable Reference Period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Trust and its Restricted Subsidiaries
after the Issue Date, excluding Restricted Payments permitted by clauses
(2), (3), (4), (5) and (6) of the next succeeding paragraph, is less than
the sum, without duplication, of:
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(a) $20 million; plus
(b) 50% of the Consolidated Net Income of the Trust for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the Issue Date to the end of the
Trust's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit); plus
(c) 100% of the aggregate net cash proceeds received by the Trust
since the Issue Date as a contribution to its common equity capital or
from the issue or sale of Equity Interests of the Trust (other than
Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Trust that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Trust); plus
(d) to the extent that any Restricted Investment that was made
after the Issue Date is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (i) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition,
if any) and (ii) the initial amount of such Restricted Investment;
plus
(e) in the event that any Unrestricted Subsidiary is designated
as a Restricted Subsidiary in accordance with the provisions of this
Indenture, the lesser of (i) the aggregate fair market value of all
outstanding Investments owned by the Trust and its Restricted
Subsidiaries in such Subsidiary at the time of such designation or
(ii) the aggregate amount of Restricted Investments made in such
Unrestricted Subsidiary since the Issue Date.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Trust or any Guarantor
or of any Equity Interests of the Trust in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Trust) of, Equity Interests of the Trust (other than
Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (3) (c) of
the preceding paragraph;
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(3) the defeasance, redemption, repurchase or other acquisition of
Indebtedness of the Trust or any Guarantor with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend or other distribution by a Subsidiary
of the Trust to the holders of its Equity Interests on a pro rata basis;
(5) (a) so long as the Trust is treated for federal, state or local
tax purposes as an entity described in Section 1361(c)(2), 1361(d) or
1361(e) of the Code, an S Corporation, a partnership or an entity that is
disregarded as an entity separate from its owner(s) (each a "Pass-Through
Entity"), the Trust shall be permitted to distribute to the
Beneficiary(ies) of the Trust (or pay compensation to the Beneficiary(ies)
of the Trust in lieu of such distributions) all amounts distributed to the
Trust by Subsidiaries or other Persons in which the Trust has a direct
investment (collectively, "Investee Companies") in cash as described below,
calculated before giving effect to such payments (such payments to be
referred to hereinafter as "Trust Tax Distributions"):
(1) on (or within 15 days prior to) each April 15, June 15,
September 15 and January 15 an amount not to exceed the minimum
federal and state estimated quarterly income and intangible tax
payments required to be made on such date by each Beneficiary of the
Trust in order to prevent underpayment of each such Beneficiary's
estimated income tax pursuant to the rules set forth in Section
6654(b) and 6654(d)(1) of the Code, or their successors or
supplements, and any similar provision of applicable state income and
intangible tax law for any state with respect to which the Investee
Companies qualify as Pass-Through Entities for state law purposes,
such amount to be calculated as though each such Beneficiary's only
income and loss in each such quarter relating to a required estimated
payment was an amount equal to the sum of the taxable income and loss
of the Investee Companies which are Pass-Through Entities. The
foregoing amounts may be paid so long as (I) each such Investee
Company is and was a Pass-Through Entity for such quarter, as provided
in the Code or the Treasury Regulations promulgated thereunder, (II)
no Default or Event of Default exists and is continuing or would
thereby occur, (III) special tax counsel to the Trust delivers to the
Trustee, prior to the payment in respect of such quarter, an opinion
substantially in the form attached hereto as Exhibit G regarding the
classification of the Trust and each such Investee Company as a
Pass-Through Entity for federal income tax purposes (or, if Larry J.
Winget is disabled or unavailable as described in the Venture Trust
Instrument, such special tax counsel delivers to the Trustee, prior to
the payment in respect of such quarter, an opinion substantially in
the form attached hereto as Exhibit G), (IV) the Trust has not
received a private ruling or a National Office Technical Advice
Memorandum from the Internal Revenue Service or, in respect of
distributions made for state income tax purposes, a similar ruling
from any applicable state or local taxing authority, that the Trust is
not a Pass-Through Entity, or there has been a final "determination"
(as used in Section 1313 of the Code) or similar state determination
to the same effect, and (V) the Trust and its Investee Companies have
complied with the terms of clauses
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(b), (c) and (d) below. The amount that is distributable pursuant to
this clause (5)(a) by each Investee Company which is a Pass-Through
Entity in respect of each of the quarters described above shall be
that proportion of the amount of the Trust Tax Distribution for each
such quarter which such Investee Company's Tax Income for such quarter
bears to the aggregate Tax Income of all the Investee Companies which
are Pass-Through Entities in such quarter. For purposes of the
foregoing, "Tax Income" shall mean one-quarter of an Investee
Company's actual taxable income for the year prior to that with
respect to which the calculations described above are being made. For
purposes hereof, any references herein to the taxable income or loss
of a Pass-Through Entity that is disregarded as an entity separate
from its owner for tax purposes shall mean the taxable income or loss
of such Pass-Through Entity as if it was a pass-through corporation
which was not disregarded as a separate entity for tax purposes; and
(2) no later than September 15 of each year, the Trust shall
cause its tax advisors, which shall be a nationally recognized
accounting firm, to determine the actual amount of federal and state
income tax liability of each Beneficiary of the Trust for the previous
calendar year computed as if the only income and loss of each such
Beneficiary in such year was an amount equal to the sum of the taxable
income and loss of the Investee Companies which are Pass-Through
Entities (the "Actual Tax Amount"). If (A) the Actual Tax Amount, as
determined by such tax advisor, is less than the aggregate estimated
amounts paid pursuant to clause (1) above in respect of such year (the
"Distributed Amounts") and/or (B) if the Actual Tax Amount is at any
time finally determined by the Internal Revenue Service or a court of
competent jurisdiction to be less than that determined by such tax
advisors, the Trust shall cause the Beneficiary(ies) of the Trust,
within 75 days after such difference is determined, to reimburse to
the Trust, with no obligation on the part of the Trust to each such
Beneficiary with respect to such reimbursement, the excess of the
Distributed Amounts over the Actual Tax Amount, as finally determined
by the tax advisors, the Internal Revenue Service or court of
competent jurisdiction, as the case may be, or the excess of the
Actual Tax Amount, as determined by the tax advisors, over the Actual
Tax Amount as determined by the Internal Revenue Service or court, as
the case may be (in either case, which excess amount may be offset by
any amounts then or subsequently owed to each such Beneficiary by
reason of clause (1) above). If the excess of the Distributed Amounts
over the Actual Tax Amount, as finally determined by the tax advisors,
is reimbursed to the Trust after June 14 of such year, such excess
shall bear interest from June 15 to the date preceding the date it is
paid to the Trust at an interest rate equal to the overpayment rate
established under Section 6621(a)(1) of the Code or its successor and
supplements. If the Actual Tax Amount, as determined by the tax
advisors, the Internal Revenue Service or court, as the case may be,
is greater than the Distributed Amounts, each of the Investee
Companies which are Pass-Through Entities shall distribute to the
Trust (and the Trust shall then distribute to its Beneficiary(ies))
its share of the excess of the Actual Amount over the Distributed
Amounts, within 75 days after such difference is determined. If any
payment is made (i) in contravention of clause (1)
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above and paid to the Beneficiary(ies) of the Trust pursuant to this
clause(5)(a) or (ii) in contravention of the limitations contained in
the immediately preceding sentence and paid to the Beneficiary(ies) of
the Trust pursuant to the immediately preceding sentence, the Trust
shall cause the Beneficiary(ies) of the Trust to reimburse to each of
the Investee Companies making such prohibited payment the amount of
such prohibited payment;
(b) in the event of the death, disability or unavailability of Larry
J. Winget as provided in the Venture Trust Instrument (such date, a
"Commencement Date"), the Trust shall notify the Trustee of the occurrence
of such Commencement Date no later than 10 days following such date and
shall apply for a private ruling from the Internal Revenue Service to the
effect that (1) each of the Investee Companies which was a Pass-Through
Entity immediately prior to such death, disability or unavailability, as
the case may be, qualifies, despite such death, disability or
unavailability, as a Pass-Through Entity and (2) the Trust qualifies as a
Pass-Through Entity;
(c) if at any time the Trust or an Investee Company receives
notification from the Internal Revenue Service that any Investee Company
does not qualify as a Pass-Through Entity (x) no further distributions
shall be made pursuant to clause (a)(1) above by such Investee Company, and
(y) the Trust shall cause the Beneficiary(ies) of the Trust either (A) to
reimburse the Trust all amounts paid by that Investee Company pursuant to
clause (a)(1) and clause (a)(2) above with respect to all periods as to
which that Investee Company did not qualify as a Pass-Through Entity, with
no obligation on the part of the Trust to any such Beneficiary with respect
to such reimbursement, and the Trust shall then pay such reimbursement to
that Investee Company, or (B) to reimburse such Investee Company such
payments directly, within 75 days after such requirement for reimbursement
is determined; provided that no such reimbursement shall be required to the
extent to which such distribution would otherwise have been permitted,
after taking into account interest, penalties and additions to tax imposed
on such Investee Company as a result of its failure to qualify as a
Pass-Through Entity. If the Trust or any Investee Company at any time
receives notification from the Internal Revenue Service that the Trust is
not a Pass-Through Entity or if the Trust or the Investee Companies fail to
receive a favorable response to a ruling request described in clause (b)
within 360 days after the Commencement Date with respect to the status of
the Trust or any Investee Company as a Pass-Through Entity (in either the
case of a notification or a response to a ruling request, the
"Entity-in-Issue") the Trust shall, and shall cause its Beneficiaries to,
take the actions described in clauses (x) and (y) of the preceding sentence
with respect to the Entity-in-Issue (unless such Internal Revenue Service
response indicates that the Internal Revenue Service is not ruling as to
those issues and the Trust has obtained a favorable opinion of independent
tax counsel that the Entity-in-Issue is a Pass-Through Entity); and
(d) no Trust Tax Distribution may be made to the extent such
distribution would cause the aggregate cumulative amount of Trust Tax
Distributions to exceed the aggregate cumulative Tax Distribution Amounts
for periods completed after the Issue Date; and
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The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued to or by the Trust or
such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities
that are required to be valued by this covenant shall be determined by
the relevant Fairness Committee whose resolution with respect thereto
shall be delivered to the Trustee. The Fairness Committee's determination
must be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing if the fair
market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Trust shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting
forth the basis upon which the calculations required by this Section 4.07
were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Trust or any of its Restricted Subsidiaries, or with respect
to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Trust or any of its Restricted
Subsidiaries;
(2) make loans or advances to the Trust or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Trust or any of
its Restricted Subsidiaries.
However, the preceding restrictions shall not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the Issue Date and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness,
as in effect on the Issue Date;
(2) Credit Facilities, provided that such Credit Facilities are no
more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in the Credit Agreement
as in effect on the Issue Date;
(3) this Indenture, the Notes and the Subsidiary Guarantees;
(4) applicable law;
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(5) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Trust or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, provided that, in
the case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(6) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired
of the nature described in clause (3) of the preceding paragraph;
(8) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(9) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(10) Liens securing Indebtedness that limit the right of the debtor
to dispose of the assets subject to such Lien;
(11) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business; and
(13) Indebtedness or other contractual requirements of a Receivables
Subsidiary in connection with a Qualified Receivables Transaction,
provided that such restrictions apply only to such Receivables
Subsidiary; and
(14) Indebtedness incurred by a Restricted Subsidiary that is not a
Guarantor in compliance with Section 4.10 hereof.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt), and the Trust shall not issue any Disqualified Stock and shall
not permit any of its Restricted Subsidiaries to issue any shares of Preferred
Stock; provided,
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however, that the Trust may incur Indebtedness (including Acquired Debt) and
issue Disqualified Stock, and the Trust and the Guarantors may incur
Indebtedness and issue Preferred Stock and any other Restricted Subsidiary may
incur Acquired Debt, if the Fixed Charge Coverage Ratio for the Trust's most
recently ended four full fiscal quarters for which financial statements are
publicly available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or Preferred Stock is
issued would have been at least 2.0 to 1, determined on a Pro Forma Basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Preferred Stock or
Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period.
The first paragraph of this covenant shall not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Trust and/or one or more Restricted
Subsidiaries of additional Indebtedness and letters of credit under
Credit Facilities in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the
Trust and the Restricted Subsidiaries, without duplication, thereunder)
not to exceed $625.0 million less (x) the aggregate principal amount of
Receivables Debt outstanding under clause (2) below and (y) the aggregate
amount of all Net Proceeds of Asset Sales applied by the Trust or any of
its Restricted Subsidiaries to repay any Indebtedness under a Credit
Facility or Receivables Debt under Receivables Facilities and effect a
corresponding commitment reduction thereunder pursuant to Section 4.11
hereof; provided, that Restricted Subsidiaries that are not Guarantors
shall not directly or indirectly incur Indebtedness and letters of credit
in an aggregate principal amount outstanding under this clause (1) in
excess of $50.0 million; provided, further, that the aggregate principal
amount of Indebtedness, letters of credit and Receivables Debt under
Receivables Facilities which may be incurred under this clause (1) and
clause (2) below shall not be reduced below $100.0 million in the
aggregate at any one time outstanding by reason of subclause (y) above
and subclause (y) of clause (2) below;
(2) the incurrence by Receivables Subsidiaries of Receivables Debt
under Receivables Facilities in an aggregate principal amount at any time
outstanding pursuant to this clause (2) not to exceed $500 million less
(x) the aggregate principal amount of Indebtedness and letters of credit
(determined as described in clause (1) above) outstanding under clause
(1) above and (y) the aggregate amount of all Net Proceeds of Asset Sales
applied to reduce commitments with respect to Receivables Debt or
Indebtedness under a Credit Facility pursuant to the covenant described
in Section 4.11 hereof; provided, that the aggregate principal amount of
Indebtedness, letters of credit and Receivable Debt under Receivables
Facilities which may be incurred pursuant to this clause (2) and clause
(1) above shall not be reduced below $100.0 million in the aggregate at
any one time outstanding by reason of subclause (y) above and subclause
(y) of clause (1) above;
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(3) the incurrence by the Trust and its Restricted Subsidiaries of
the Existing Indebtedness;
(4) the incurrence by the Trust and the Guarantors of Indebtedness
represented by the Initial Notes to be issued on the Issue Date and the
related Subsidiary Guarantees and the New Notes (as defined in the
Registration Rights Agreement) to be issued pursuant to the Registration
Rights Agreement and the related Subsidiary Guarantees;
(5) the incurrence by the Trust or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used
in the business of the Trust or such Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (5), not to exceed $50.0 million at any time
outstanding;
(6) (a) the incurrence by the Trust or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred under the first paragraph of this covenant
or clauses (3), (4), (5), (6), or (14) of this paragraph and (b) the
incurrence by the Trust or any of its Restricted Subsidiaries of
Permitted Preferred Stock in exchange for, or the net proceeds of which
are used to refund, refinance or replace Preferred Stock (other than
intercompany Preferred Stock) that was permitted by this Indenture to be
incurred under the first paragraph of this covenant;
(7) the incurrence by the Trust or any of its Restricted
Subsidiaries of intercompany Indebtedness or Preferred Stock between or
among the Trust and any of its Restricted Subsidiaries; provided,
however, that:
(a) if the Trust or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations with respect
to the Notes, in the case of the Trust, or the Subsidiary
Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness or Preferred Stock
being held by a Person other than the Trust or a Restricted
Subsidiary thereof and (ii) any sale or other transfer of any such
Indebtedness or Preferred Stock to a Person that is not either the
Trust or a Restricted Subsidiary thereof; shall be deemed, in each
case, to constitute an incurrence of such Indebtedness or Preferred
Stock by the Trust or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (7);
(8) the incurrence by the Trust or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred solely for the
purpose of (a) fixing or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be
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outstanding or (b) hedging currency or commodity risks of the Trust and
its Restricted Subsidiaries incurred by the Trust or such Restricted
Subsidiaries in the ordinary course of their business;
(9) the guarantee by the Trust or any of the Guarantors of
Indebtedness of the Trust or a Guarantor that was permitted to be
incurred by another provision of this covenant;
(10) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock shall not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this covenant; provided, in each such case, that the amount
thereof is included in Fixed Charges of the Trust as accrued;
(11) Indebtedness of the Trust or any Restricted Subsidiary
represented by performance bonds and letters of credit for the account of
the Trust or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims and payment obligations
in connection with self-insurance, in each case, that are incurred in the
ordinary course of business in accordance with customary industry
practice in amounts, and for the purposes, customary in the Trust's
industry;
(12) Indebtedness of the Trust or any Restricted Subsidiary arising
from agreements providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred in connection with
the disposition of any business, assets or Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose
of financing such acquisition; provided that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received or to be received by the Trust and the
Restricted Subsidiary in connection with such dispositions;
(13) Indebtedness of the Trust or any Restricted Subsidiary solely
in respect of bankers acceptances, and appeal bonds (to the extent that
any such incurrence does not result in the incurrence of any obligation
to repay any obligation relating to borrowed money of others), all in the
ordinary course of business in accordance with customary industry
practices, in amounts and for the purposes customary in the Trust's
industry; provided that the aggregate principal amount outstanding of
such Indebtedness (including any Indebtedness issued to refinance, refund
or replace such Indebtedness) shall at no time exceed $5.0 million;
(14) the incurrence by any Restricted Subsidiary that is not a
Guarantor of Indebtedness in accordance with Section 4.10 hereof;
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(15) the guarantee by any Restricted Subsidiary that is not a
Guarantor of Indebtedness of a Restricted Subsidiary that is not a
Guarantor that was permitted to be incurred under this Indenture; and
(16) the incurrence by the Trust or any of the Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (16), not to exceed $35.0
million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (16)
above, or is entitled to be incurred pursuant to the first paragraph of this
covenant, the Trust shall be permitted to classify such item of Indebtedness on
the date of its incurrence in any manner that complies with this covenant.
Indebtedness under Credit Facilities outstanding on the date on which Notes are
first issued and authenticated under this Indenture shall be deemed to have
been incurred on such date in reliance on the exception provided by clause (1)
of the definition of Permitted Debt.
Section 4.10. Limitation on Foreign Indebtedness
The Trust shall not permit any Restricted Subsidiary of the Trust that is
not a Guarantor to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) other than Permitted Debt unless:
(1) after giving effect to the incurrence of such Indebtedness and
the receipt of the application of the proceeds thereof:
(a) if, as a result of the incurrence of such Indebtedness
such Restricted Subsidiary shall become subject to any restriction
or limitation on the payment of dividends or the making of other
distributions,
(i) the Fixed Charge Coverage Ratio of Restricted Subsidiaries
that are not Guarantors (determined on a Pro Forma Basis for the
last four fiscal quarters for which financial statements are
available at the date of determination) is greater than 2.75 to 1;
and
(ii) the Trust's Fixed Charge Coverage Ratio (determined on a
pro forma basis for the last four fiscal quarters of the Trust for
which financial statements are available at the date of
determination) is greater than 2.0 to 1; or
(b) in any other case, the Trust's Fixed Charge Coverage Ratio
(determined on a Pro Forma Basis for the last four fiscal quarters
of the Trust for which financial statements are available at the
date of determination) is greater than 2.0 to 1; and
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(2) no Default or Event of Default shall have occurred and be
continuing a the time or as a consequence of the incurrence of such
Indebtedness.
In the event that any Indebtedness incurred pursuant to clause (1)(b) of
the foregoing paragraph is proposed to be amended, modified or otherwise
supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Trust shall not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred
pursuant to the terms of clause (1)(a) of the foregoing paragraph.
In calculating the Fixed Charge Coverage Ratio of the Restricted
Subsidiaries that are not Guarantors, Fixed Charges with respect to
Indebtedness that is solely owed to and held by the Trust or a Restricted
Subsidiary shall be excluded.
All calculations required under the prior two paragraphs hereof shall be
made in a manner consistent with the calculations required under Section 4.09
hereof.
Section 4.11. Asset Sales.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Trust (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to
the fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) with respect to any single transaction or series of related
transactions that involves assets having a fair market value of more than
$10.0 million, such fair market value is determined by the Trust's Board
of Directors and evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee; and
(3) at least 85% of the consideration therefor received by the Trust
or such Restricted Subsidiary is in the form of cash or Cash Equivalents,
provided, however, that more than 15% of the total consideration may
consist of consideration other than cash or Cash Equivalents if (A) the
portion of such consideration that does not consist of cash or Cash
Equivalents consists of assets of a type ordinarily used in the operation
of a Permitted Business to be used by the Trust or a Restricted
Subsidiary in the conduct of a Permitted Business or Capital Stock of a
Restricted Subsidiary engaged in a Permitted Business (or a Person which
becomes such a Restricted Subsidiary as a result of the receipt of such
consideration), (B) the terms of such Asset Sale have been approved by a
majority of the members of the Board of Directors of the Trust and (C) if
the value of the assets being disposed of by the Trust or such Restricted
Subsidiary in such transaction (as determined in good faith by such
members of the Board of Directors) is at least $10.0 million, the Board
of Directors of the Trust has received a written opinion of a nationally
recognized investment banking firm (or other nationally recognized
valuation expert) to the effect that such Asset Sale is fair, from a
financial point of view, to the Trust and the
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Trust has delivered a copy of such opinion to the Trustee. For purposes
of this provision (3), each of the following shall be deemed to be cash:
(a) any liabilities (as shown on the Trust's or such
Restricted Subsidiary's most recent balance sheet), of the Trust or
any Restricted Subsidiary (other than contingent liabilities
(except to the extent that a reserve or other liability in respect
thereof is reflected in accordance with GAAP on the most recent
balance sheet of the Trust or such Restricted Subsidiary) and
liabilities that are by their terms subordinated to the Notes or
any Subsidiary Guarantee) that are assumed by the transferee of any
such assets pursuant to a customary novation agreement that
releases the Trust or such Restricted Subsidiary from further
liability; and
(b) any securities, notes or other obligations received by the
Trust or any such Restricted Subsidiary from such transferee that
within 60 days of such Asset Sale are converted by the Trust or
such Restricted Subsidiary into cash or Cash Equivalents (to the
extent of the cash or Cash Equivalents received in that
conversion).
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Trust or Restricted Subsidiary may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure;
(4) to acquire other long-term assets that are used or useful in a
Permitted Business; or
(5) to make and consummate an Asset Sale Offer (as described below).
Pending the final application of any such Net Proceeds, the Trust or such
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs shall constitute "Excess Proceeds." When
(i) the aggregate amount of Excess Proceeds exceeds $10.0 million or (ii) the
Trust or any Restricted Subsidiary is required to make an offer to purchase or
redeem any Indebtedness which is pari passu with the Notes and which contains
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with asset sale proceeds, then in each such case, the
Trust shall make an Asset Sale Offer to all Holders of Notes issued thereunder
and all holders of other Indebtedness that is pari passu with such Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets to
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purchase the maximum principal amount of such Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer shall be equal to 100% of principal amount plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase,
and shall be payable in cash. If any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Trust or any Restricted Subsidiary may use such
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes and such other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and such
other pari passu Indebtedness tendered. Upon completion of each Asset Sale
Offer pursuant to this Indenture, the amount of Excess Proceeds shall be reset
at zero for purposes of such Indenture. The Trust shall commence an Asset Sale
Offer within ten (10) Business Days after the amount of Excess Proceeds exceeds
$10 million, such Asset Sale Offer shall remain open for at least twenty (20)
Business Days and the Trust shall complete such Asset Sale Offer within thirty
(30) Business Days after it is commenced.
All cash or Cash Equivalents received by the Trust or a Restricted
Subsidiary from an Event of Loss shall be used, invested, used for prepayment
of Indebtedness, or used to repurchase Notes, all of the foregoing within the
periods and as otherwise provided in the prior three paragraphs.
The Trust shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Asset Sale
covenant, the Trust shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Asset Sale covenant by virtue of such compliance.
Section 4.12. Transactions with Affiliates.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable to the Trust or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Trust or
such Restricted Subsidiary with an unrelated Person; and
(2) the Trust delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, a resolution of the Board of Directors of
the Trust or such Restricted Subsidiary, as
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the case may be (or a resolution of the Board of Directors of the
Trust in the case of Venture Industries Canada, Ltd.) and a
resolution of the Independent members of the Fairness Committee of
the Trust or Restricted Subsidiary (or a resolution of the
Independent members of the Fairness Committee of the Trust in the
case of Venture Canada), set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
covenant; and
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, an opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal, investment banking firm or
other qualified independent financial advisor of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, shall not be subject to the provisions of the prior paragraph:
(1) any transaction with officers or directors of the Trust or any
Restricted Subsidiary in the ordinary course of business and consistent
with the past practice of the Trust or such Restricted Subsidiary;
(2) transactions between or among the Trust and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Trust;
(4) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Trust;
(5) Restricted Payments that are permitted by Section 4.07 hereof;
(6) performance of all agreements in existence on the Issue Date and
any modification thereto or any transaction contemplated thereby
(including pursuant to any modification thereto) in any replacement
agreement therefor so long as such modification or replacement is not
more disadvantageous to the Holders in any material respect than the
original agreement as in effect on the Issue Date; and
(7) transactions between a Receivables Subsidiary and any Person in
which the Receivables Subsidiary has an Investment.
The Trust and each of its Restricted Subsidiaries (other than Venture
Industries Canada, Ltd.) shall have or shall establish and maintain a Fairness
Committee, at least one of whose members shall be Independent.
Section 4.13. Liens.
The Trust shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness or
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trade payables on any asset now owned or hereafter acquired, except Permitted
Liens, unless the Trust or the Guarantors provide, and cause their Restricted
Subsidiaries to provide, concurrently therewith, that the Notes are equally and
ratably secured.
Section 4.14. Business Activities.
The Trust shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent
as would not be material to the Trust and its Restricted Subsidiaries taken as
a whole.
Section 4.15. Corporate Existence.
Subject to Article 5 hereof, the Trust shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
existence as a grantor trust pursuant to the laws of the state of Michigan, and
the corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Trust or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Trust and its
Subsidiaries; provided, however, that the Trust shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors of the
Trust shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Trust and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.16. Change of Control.
If a Change of Control occurs, each Holder of Notes shall have the right
to require the Trust to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of that Holder's Notes pursuant to a "Change of
Control Offer." In the Change of Control Offer, the Trust shall offer a Change
of Control Payment in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the date of purchase. Within 20 days following any Change of
Control, the Trust shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the Change of Control Payment Date specified in such
notice, which date shall be no earlier than 20 Business Days and no later than
55 Business Days from the date such notice is mailed, pursuant to the
procedures required by this Indenture and described in such notice. The Trust
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions
of this Indenture, the Trust shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Change of Control provision by virtue of such conflict.
On the Change of Control Payment Date, the Trust shall, to the extent
lawful:
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(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered;
and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Trust.
The Paying Agent shall promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
Prior to complying with any of the provisions of this Section 4.16, but in
any event within 90 days following a Change of Control, the Trust shall either
repay all outstanding Senior Debt or obtain the requisite consents, if any,
under all agreements governing outstanding Senior Debt to permit the repurchase
of the Notes required by this covenant. The failure to repay such Senior Debt
or obtain such consents within such time period shall constitute an Event of
Default under this Indenture. The Trust shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The provisions described above that require the Trust to make a Change of
Control Offer following a Change of Control shall be applicable regardless of
whether any other provisions of this Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Trust repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Trust shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes a Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Trust, and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
Section 4.17. Anti-Layering
Notwithstanding the provisions of Section 4.09 hereof, the Trust and the
Guarantors shall not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt and senior in any respect in right of payment to the
Notes, and no Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt and senior in any respect in right of
payment to its Subsidiary Guarantee of the Notes; provided, however, that no
Indebtedness of the Trust or its Restricted Subsidiaries shall be
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deemed to be subordinated or junior in right of payment to any other
Indebtedness of the Trust or its Restricted Subsidiaries solely by virtue of
being unsecured.
Section 4.18. Additional Guarantors
All future domestic Restricted Subsidiaries (other than Receivables
Subsidiaries) shall become Guarantors of the Notes. In addition, the Trust
shall not permit any of its Restricted Subsidiaries, directly or indirectly, to
Guarantee or pledge any assets to secure the payment of any other Indebtedness
of the Trust or any Guarantor unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture providing for the Guarantee of
the payment of the Notes by such Restricted Subsidiary, which Guarantee shall
be senior to or pari passu with such Restricted Subsidiary's Guarantee of or
pledge to secure such other Indebtedness unless, with respect to the Notes,
such other Indebtedness is Senior Debt, in which case the Guarantee of the
Notes may be subordinated to the Guarantee of such Senior Debt to the same
extent as the Notes are subordinated to such Senior Debt.
Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the
Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged under the circumstances in Section 5.01
hereof. A form of the Subsidiary Guarantees is attached as Exhibit E hereto.
Section 4.19. Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors of the Trust may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments
(without duplication) owned by the Trust and its Restricted Subsidiaries in the
Subsidiary so designated shall be deemed to be an Investment made as of the
time of such designation and shall either reduce the amount available for
Restricted Payments under the first paragraph of Section 4.07 hereof or reduce
the amount available for future Investments under one or more clauses of the
definition of Permitted Investments, as the Trust shall determine. That
designation shall only be permitted if such Investment would be permitted at
that time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary. The Board of Directors may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation
would not cause a Default.
Section 4.20. Limitation on Amendments to Agreements
So long as the Trust is Venture Holdings Trust and is an obligor under the
Indentures, (i) the Trust shall not engage in any business activity except for
agreements related to its outstanding Indebtedness; (ii) the Trust shall not
own any property other than (A) the stock or membership interest of its
subsidiaries, (B) insurance on the life of the Beneficiary, or (C) amounts
allowed to be distributed by it under the terms of its outstanding Indebtedness
or required to be used by the Trust to service such outstanding indebtedness
and its other Obligations incurred in the ordinary course in accordance with
past practice; and (iii) the Venture Trust Instrument shall not be amended,
modified or changed in any manner except that the Trust may make amendments,
modifications or changes which individually or in the aggregate are not
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adverse to the interests of the Holders of the Notes. Without limiting the
foregoing, amendments to the Venture Trust Instrument reasonably necessary to
conform to the requirements of Section 1361(c)(2), 1361(d) or 1361(e) of the
Code, or their successors or supplements, shall not be deemed adverse to the
interests of the Holders of the Notes. The Trust shall not amend, modify or in
any way alter the Corporate Opportunity Agreement in any manner adverse to the
Trust or any of its Restricted Subsidiaries.
Section 4.21. Payments for Consent
The Trust shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.22. Corporate Opportunities
Larry J. Winget shall agree pursuant to the Corporate Opportunity
Agreement for the benefit of the Holders of the Notes that if any corporate
opportunity, business opportunity, proposed transaction, acquisition,
disposition, participation, interest, or other opportunity to acquire an
interest in any business or prospect in the same business or in any business
reasonably related to the business of the Trust or any of its Subsidiaries or
in any machinery or equipment useful in the business of the Trust or any of its
Subsidiaries (a "Business Opportunity") comes to his attention or shall be made
available to him or any of his Affiliates, a complete and accurate description
of such Business Opportunity, including all of the terms and conditions thereof
and the identity of all other Persons involved in the Business Opportunity,
shall be promptly presented in writing to the Board of Directors of each of the
Trust and each Guarantor and the Fairness Committee of the Trust and each
Guarantor and the Trust and each Guarantor shall be entitled to pursue and take
advantage of such Business Opportunity, either directly or through a wholly
owned Restricted Subsidiary, and Larry J. Winget shall not, nor shall any of
his Affiliates (other than the Trust or any wholly owned Restricted Subsidiary
of the Trust), pursue or take advantage of a Business Opportunity unless
majorities of the Board of Directors of the Trust and each Guarantor and the
Fairness Committee of the Trust and each Guarantor (including majorities of the
Trust's and each Guarantor's disinterested directors, if any, and Independent
members of the Fairness Committee) have determined that it is not in the
interests of the Trust or such Guarantor to pursue or take advantage of such
Business Opportunity.
Notwithstanding the foregoing, Business Opportunities (1) relating to the
purchase of machinery and equipment or real estate and not constituting a
business within the meaning of Section 11.01 (d) of Regulation S-X of the
Commission or (2) relating to the sale of goods and services by an Affiliate in
the ordinary course of business as conducted as of the Issue Date shall not be
subject to the Corporate Opportunity Agreement.
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ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
(a) The Trust may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Trust is the surviving entity);
or (2) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Trust (computed on a
consolidated basis), in one or more related transactions, to another Person;
unless:
(i) either: (a) the Trust is the continuing entity; or (b) the
Person formed by or surviving any such consolidation or merger (if other
than the Trust) or to which such sale, assignment, transfer, conveyance
or other disposition shall have been made is organized or existing under
the laws of the United States, any state thereof or the District of
Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Trust) or the Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Trust under the Notes, the
Indenture and the Registration Rights Agreements pursuant to agreements
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Trust or the Person formed by or surviving any such
consolidation or merger (if other than the Trust), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made:
(A) shall have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of
the Trust immediately preceding the transaction; and
(B) shall, on the date of such transaction after giving Pro
Forma Effect thereto and any related financing transactions as if
the same had occurred at the beginning of the applicable Reference
Period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 hereof.
The foregoing clause (iv) will not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Trust and any of
the Guarantors.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Trust's interest in which constitutes all or
substantially all of the properties and assets of the Trust shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Trust.
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Notwithstanding anything contained in this Indenture to the contrary, the
Trust is permitted to contribute or otherwise transfer all of the Equity
Interests of the Subsidiaries then held by the Trust (other than the Equity
Interests of the Subsidiary which is to receive such contribution from the
Trust) to Venture Holdings Corporation or other successor to the Trust (a
"Trust Contribution"), provided that (A) any successor or surviving entity is
organized and existing under the laws of the United States, any state thereof
or the District of Columbia, (B) such contribution or reorganization is not
materially adverse to Holders of the Notes; it being understood, however, that
such contribution or reorganization shall not be considered materially adverse
to Holders of the Notes solely because the successor or surviving entity is
subject to income taxation as a corporate entity, (C) immediately after giving
effect to such transaction, no Default or Event of Default exists, (D) the
actions comprising such contribution or reorganization (e.g., the contribution
of Capital Stock of the Subsidiaries, or the issuance of Capital Stock of the
entity in exchange for assets of or Equity Interests in the Trust or in
exchange for stock of an entity holding such Equity Interests, or the merger or
consolidation of such entities) shall not themselves directly result in
material income tax liability to the successor or surviving entity, (E) the
successor or surviving entity has assumed all obligations of the Trust,
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Notes and the Indenture and (F) Holders of the Notes shall
not recognize income, gain or loss for federal income tax purposes as a result
of such contribution or reorganization and shall be subject to federal income
tax with respect to the Notes on the same amounts, in the same manner, and at
the same time as would have been the case if such contribution or
reorganization had not occurred. If the successor or surviving entity after a
Trust Contribution is not a Pass-Through Entity, the Trust's ability to make
Trust Tax Distributions must terminate prior to such contribution or
reorganization (except with respect to Trust Tax Distributions in respect of
taxable periods ending on or prior to the date such contribution or
reorganization is effective for relevant tax purposes), other than Trust Tax
Distributions in respect of Beneficiaries' income tax liability that results
from the actions comprising such contribution or reorganization. The Trust
shall deliver to the Trustee prior to such contribution or reorganization an
Officers' Certificate covering clauses (A) through (F) and the preceding
sentence of this paragraph, stating that such contribution or reorganization
and such supplemental indenture comply with the Indenture, and an opinion of
counsel covering clauses (A), (D), (E) and (F) above and the preceding sentence
of this paragraph.
(b) A Guarantor may not consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person), another Person, other than the
Trust or another Guarantor, unless:
(i) immediately after giving effect to that transaction, no Default
or Event of Default exists; and
(ii) either: (a) the Person formed by or surviving any such
consolidation or merger assumes all the obligations of that Guarantor
under the Indenture, its Subsidiary Guarantee and the Registration Rights
Agreement, pursuant to a supplemental indenture satisfactory to the
Trustee or (b) the Net Proceeds of such sale or other disposition are
applied in accordance with Section 4.11 hereof.
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The Subsidiary Guarantee of a Guarantor shall be released from its
obligations under the Subsidiary Guarantee:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the Trust, if the
Guarantor applies the Net Proceeds of that sale or other disposition are
applied in accordance with Section 4.11 hereof; or
(2) in connection with any sale of all of the Capital Stock of that
Guarantor to a Person that is not (either before or after giving effect
to such transaction) a Subsidiary of the Trust, if the Guarantor applies
the Net Proceeds of that sale in accordance with Section 4.11 hereof; or
(3) if the Trust properly designates that Guarantor as an
Unrestricted Subsidiary; provided, however, that any such termination
shall occur only to the extent that all obligations of such Guarantor
under all of its guarantees of, and under all of its pledges of assets or
other security interests which secure, any Indebtedness of the Trust, the
Guarantors or any other Restricted Subsidiary shall also terminate upon
such sale, disposition or designation.
Section 5.02. Successor Corporation Substituted.
(a) Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Trust in accordance with Section 5.01 hereof, the successor
corporation or limited liability company formed by such consolidation or into
or with which the Trust is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Trust" shall refer instead to the successor corporation or
limited liability company and not to the Trust), and may exercise every right
and power of the Trust under this Indenture with the same effect as if such
successor Person had been named as the Trust herein; provided, however, that
the predecessor Trust shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale or other
disposition of all (other than the Equity Interests of the Subsidiary which is
to receive such contribution from the Trust) of the Trust's assets that meets
the requirements of Section 5.01 hereof.
(b) In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transactions)
a Subsidiary of the Trust, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the
Capital Stock of such Guarantor) or the Person acquiring the property (in the
event of a sale or other disposition of all or substantially all of the assets
of such Guarantor) will be released and relieved of any obligations under its
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
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disposition are applied in accordance with the applicable provisions of this
Indenture, including without limitation Section 4.11 hereof. Upon delivery by
the Trust to the Trustee of an Officers' Certificate and an Opinion of Counsel
to the effect that such sale or other disposition was made by the Trust in
accordance with the provisions of this Indenture, including without limitation
Section 4.11 hereof, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in Article 11.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Trust defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not prohibited by
Article 10 hereof) and such default continues for a period of 30 days whether
or not such payment was prohibited by the subordination provisions of this
Indenture;
(b) the Trust defaults in the payment when due of principal of or premium,
if any, on the Notes (whether or not prohibited by Article 10 hereof) when the
same becomes due and payable at maturity, upon redemption (including in
connection with an offer to purchase) or otherwise whether or not such payment
was prohibited by the subordination provisions of this Indenture;
(c) the Trust or any Restricted Subsidiary fails to comply with any of the
provisions of Section 4.11 or 4.16 hereof;
(d) the Trust or any Restricted Subsidiary fails to observe or perform any
other covenant, representation, warranty or other agreement in this Indenture
or the Notes for 60 days after notice to the Trust by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class or Larry J.
Winget fails to observe and perform any covenant or agreement contained in the
Corporate Opportunity Agreement;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness in an aggregate principal amount of $15.0 million for money
borrowed by the Trust or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Trust or any of its Restricted Subsidiaries),
whether such Indebtedness or guarantee now exists, or is created after the date
of this Indenture, which default (1) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default or
(2) results in the acceleration of such Indebtedness
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prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Trust or any
of its Restricted Subsidiaries and such judgment or judgments are not covered
by insurance and remain undischarged for a period (during which execution shall
not be effectively stayed or bonded) of 60 days, provided that the aggregate of
all such undischarged judgments exceeds $10.0 million;
(g) any Subsidiary Guarantee is terminated for any reason not permitted by
this Indenture, or any Guarantor or any Person acting on behalf of any
Guarantor denies such Guarantor's obligations under its respective Subsidiary
Guarantee;
(h) the Trust, any Guarantors or any of its Significant Subsidiaries or
group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Trust, any Guarantor or any
Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Trust, any Guarantor or any
Significant Subsidiary or for all or substantially all of the property of
the Trust or any of its Subsidiaries; or
(iii) orders the liquidation of the Trust, any Guarantor or any
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
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Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Trust or any
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the then outstanding Notes may declare all the Notes
to be due and payable by notice in writing to the Trust and the Trustee
specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice") and the same shall become immediately
due and payable. Notwithstanding the foregoing, if an Event of Default
specified in Sections 6.01(h) or (i) hereof occurs, with respect to the Trust
or any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable without further action or notice. Holders of the Notes
may not enforce this Indenture or the Notes except as provided in this
Indenture. Subject to Article 9 hereof, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Trust with the
intention of avoiding payment of the premium that the Trust would have had to
pay if the Trust then had elected to redeem the Notes pursuant to Section 3.07
hereof, an equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law, upon the acceleration of the Notes. If
an Event of Default occurs prior to June 1, 2004 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Trust with the
intention of avoiding the prohibition on redemption of the Notes prior to such
date, then, upon acceleration of the Notes, an additional premium shall also
become and be immediately due and payable in an amount, for each of the years
beginning on June 1 of the years set forth below, as set forth below (expressed
as a percentage of the principal amount of the Notes on the date of payment
that would otherwise be due but for the provisions of this sentence):
<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
1999 116.000%
2000 114.000%
2001 112.000%
2002 110.000%
2003 108.000%
</TABLE>
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any,
Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
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(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on a Note, on or after the respective due dates
expressed in such Note (including in connection with an offer to purchase), or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.07. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Trust for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.08. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Trust
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
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Section 6.09. 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, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and
Liquidated Damages, if any and interest, respectively; and
Third: to the Trust or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.10. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in its exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
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(ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Trust. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Trust shall be sufficient if signed by an
Officer of the Trust.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Trust or any Affiliate of
the Trust with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Trust's use of the proceeds from the Notes or any money
paid to the Trust or upon the Trust's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).
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A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Trust and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA Section 313(d). The Trust
shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
Section 7.07. Compensation and Indemnity.
The Trust shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Trust shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Trust shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Trust (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Trust or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Trust promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Trust shall not relieve the Trust of its obligations hereunder. The Trust
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Trust shall pay the reasonable fees
and expenses of such counsel. The Trust need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Trust under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Trust's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of
this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
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Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Trust. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Trust in writing. The Trust may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Trust shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Trust.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Trust, or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to comply with Section 7.10, such Holder 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 Trust. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Trust's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11. Preferential Collection of Claims Against Trust.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Trust may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Trust's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Trust shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Trust shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only
for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Trust, shall execute proper instruments acknowledging
the same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect
of the
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principal of, premium, if any, and interest and Liquidated Damages on such
Notes when such payments are due, (b) the Trust's obligations with respect to
such Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes and the maintenance of an office or
agency for payment and money for security payments held in trust, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Trust's obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Trust may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Trust's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Trust shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.04, 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22
hereof and Section 5.01 hereof with respect to the outstanding Notes on and
after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Trust may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Trust's exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(g) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Trust must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated maturity
or on the applicable redemption date, as the case may be;
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(b) in the case of an election under Section 8.02 hereof, the Trust shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Trust has received
from, or there has been published by, the Internal Revenue Service a ruling or
(B) since the date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Trust shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness, all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article 8 concurrently with
such incurrence) or insofar as Sections 6.01(h) or 6.01(i) hereof is concerned,
at any time in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Trust or any of its
Subsidiaries is a party or by which the Trust or any of its Subsidiaries is
bound;
(f) the Trust shall have delivered to the Trustee an Opinion of Counsel
(which may be subject to customary exceptions) to the effect that on the 91st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Trust shall have delivered to the Trustee an Officers' Certificate
stating that the deposit was not made by the Trust with the intent of
preferring the Holders over any other creditors of the Trust or with the intent
of defeating, hindering, delaying or defrauding any other creditors of the
Trust; and
(h) the Trust shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee,
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collectively for purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 hereof in respect of the outstanding Notes shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Trust acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Trust shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Trust from time to time upon the request of the
Trust any money or non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06. Repayment to Trust.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Trust, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Trust on its request or (if then held by the Trust) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Trust for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Trust
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Trust cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Trust.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Trust's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case
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may be; provided, however, that, if the Trust makes any payment of principal
of, premium, if any, or interest on any Note following the reinstatement of its
obligations, the Trust shall be subrogated to the rights of the Holders of such
Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Trust, the Guarantors
and the Trustee may amend or supplement this Indenture, the Subsidiary
Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including
the related definitions) in a manner that does not materially adversely affect
any Holder;
(c) to provide for the assumption of the Trust's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Trust or such
Guarantor pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(f) to allow any Guarantor to execute a Supplemental Indenture and/or a
Subsidiary Guarantee with respect to the Notes;
(g) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof.
Upon the request of the Trust accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Trust and the Guarantors
in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise.
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Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Trust and the Trustee
may amend or supplement this Indenture (including Section 3.09, 4.11 and 4.16
hereof) and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture,
the Subsidiary Guarantees or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes,
including Additional Notes, if any, voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes). Section 2.08 hereof shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Trust accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 7.02 hereof, the Trustee
shall join with the Trust in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture directly affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
Notwithstanding any other provision of this Indenture or the Notes to the
contrary, without the consent of at least 75% in principal amount of the Notes
then outstanding (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, such Notes), no waiver or amendment to
this Indenture may make any change to the subordination provisions of Article
10 hereof that adversely affects the rights of any Holder of Notes.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Trust shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Trust to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of
a majority in aggregate principal amount of the Notes, including Additional
Notes, if any, then outstanding voting as a single class may waive compliance
in a particular instance by the Trust with any provision of this Indenture or
the Notes. However, without the consent of each Holder affected, an amendment
or waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
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(a) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the
Notes (except as provided above with respect to Sections 3.09, 4.11 and 4.16
hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes including Additional Notes, if any, and a
waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or interest on the Notes; or
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(h) release any Guarantor from any of its obligations under its Subsidiary
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(i) make any change to the preceding amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
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Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Trust in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Trust
may not sign an amendment or supplemental Indenture until the Board of
Directors approves it. In executing any amended or supplemental Indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, in addition to the documents required by
Section 12.04 hereof, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Trust agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by and all Obligations relating to the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article 10, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
Section 10.02. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Trust or the Guarantors in a
liquidation or dissolution of the Trust or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Trust or its
property, in an assignment for the benefit of creditors or any marshaling of
the Trust's assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive payment in
full in cash or Cash Equivalents of all Obligations in respect of such
Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) before
Holders of the Notes shall be entitled to receive any payment with
respect to the Notes, including, without limitation, any redemption,
defeasance or other acquisition of the Notes (except that Holders may
receive and retain
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(A) Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01 hereof);
and
(ii) until all Obligations with respect to Senior Debt (as provided
in clause (i) above) are paid in full in cash or Cash Equivalents, any
distribution to which Holders would be entitled but for this Article 10
shall be made to holders of Senior Debt (except that Holders of Notes may
receive (A) Permitted Junior Securities and (B) payments and other
distributions made from any defeasance trust created pursuant to Section
8.01 hereof), as their interests may appear.
Section 10.03. Default on Designated Senior Debt.
(a) The Trust and the Guarantors may not, directly or indirectly, make any
payment or distribution to the Trustee or any Holder in respect of Obligations
with respect to the Notes and may not acquire from the Trustee or any Holder
any Notes for cash or property (other than (A) Permitted Junior Securities and
(B) payments and other distributions made from any defeasance trust created
pursuant to Section 8.01 hereof) until all principal and other Obligations with
respect to the Senior Debt have been paid in full if:
(i) a default in the payment of any principal of, premium, if any,
interest or other Obligations with respect to Designated Senior Debt
occurs and is continuing beyond any applicable grace period (a "Payment
Default"); or
(ii) a default, other than a payment default, on Designated Senior
Debt occurs and is continuing that then permits holders of such
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person (or their Representative, if applicable) who may give it pursuant
to Section 10.12 hereof. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section unless and until (A) at least 360 days shall
have elapsed since the initial effectiveness of the immediately prior
Payment Blockage Notice and (B) all scheduled payments of principal,
premium, if any, and interest on the Notes that have come due have been
paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default shall have been cured or waived for a period
of not less than 90 days.
(b) The Trust may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(i) the date upon which the default referred to in Section 10.03(i)
or (ii) hereof is cured or waived, or
(ii) in the case of a default referred to in Section 10.03(ii)
hereof, the 179th day after the date on which the applicable Payment
Blockage Notice is received by the Trustee, unless the maturity of such
Designated Senior Debt has been accelerated or a Payment Default has
occurred.
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Section 10.04. Acceleration of Securities.
If payment of the Notes is accelerated because of an Event of Default, the
Trust shall promptly notify holders of Senior Debt of the acceleration.
Section 10.05. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when such payment is prohibited
by Section 10.03 hereof, such payment shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Trust or
any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 10.06. Notice by Trust.
The Trust shall promptly notify the Trustee and the Paying Agent of any
facts known to the Trust that would cause a payment of any Obligations with
respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
Section 10.07. Subrogation.
After all Senior Debt is paid in full in cash or Cash Equivalents and
until the Notes are paid in full, Holders of Notes shall be subrogated (equally
and ratably with all other Indebtedness pari passu with the Notes) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the Holders of Notes
have been applied to the payment of Senior Debt. A distribution made under
this Article 10 to holders of Senior Debt that otherwise would have been made
to Holders of Notes is not, as between the Trust and Holders of Notes, a
payment by the Trust on the Notes.
Section 10.08. Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
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(i) impair, as between the Trust and Holders of Notes, the obligation of
the Trust, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Notes and creditors of the
Trust other than their rights in relation to holders of Senior Debt; or
(iii) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Trust fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
Section 10.09. Subordination May Not Be Impaired by Trust.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Trust or any Holder or by the failure of the Trust or any Holder to
comply with this Indenture.
Section 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Trust referred to in
this Article 10, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon
any certificate of such Representative or of the liquidating trustee or agent
or other Person making any distribution to the Trustee or to the Holders of
Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Trust, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
10.
Section 10.11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least three Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Trust (but
only with respect to a default described in Section 10.03(a)(i) hereof) or a
Representative may give the notice. Nothing in this Article 10 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.
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The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.12. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.08 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.13. Amendments.
The provisions of this Article 10 shall not be amended or modified without
the written consent of the holders of all Senior Debt.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. Guarantee.
Subject to this Article 11, each Guarantor that becomes party to this
Indenture hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Trust hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on the Notes, if any, if lawful, and all other obligations of the Trust to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not
a guarantee of collection.
Each Guarantor that becomes party to this Indenture hereby agrees that
their obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Trust, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor that becomes party to this Indenture
hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Trust, any
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right to require a proceeding first against the Trust, protest, notice and all
demands whatsoever and covenant that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Trust, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Trust or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor that becomes party to this Indenture agrees that it shall
not be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each such Guarantor further agrees that, as
between the Guarantors, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Guarantee.
Section 11.02. Subordination of Subsidiary Guarantee.
The Obligations of each Guarantor under its Subsidiary Guarantee pursuant
to this Article 11 shall be subordinated to the payment in full of all Senior
Debt of that Guarantor. For the purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Notes pursuant to this Indenture, including Article
10 hereof.
Section 11.03. Limitation on Guarantor Liability.
Each Guarantor that becomes party to this Indenture, and by its acceptance
of Notes, each Holder, hereby confirms that it is the intention of all such
parties that the Subsidiary Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Subsidiary Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and each Guarantor
hereby irrevocably agrees that the obligations of such Guarantor will, after
giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.
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Section 11.04. Execution and Delivery of Subsidiary Guarantee and Supplemental
Indenture.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor that becomes party to this Indenture hereby agrees that a notation of
such Subsidiary Guarantee substantially in the form included in Exhibit E shall
be endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee and that such Guarantor shall become party to, and
bound by the terms of, this Indenture by execution on behalf of such Guarantor
by its President or one of its Vice Presidents of a Supplemental Indenture in
the form of Exhibit F hereto.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on a Supplemental Indenture or on a
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed or at the
time the Trustee accepts delivery of the executed Subsidiary Guarantee and
Supplemental Indenture, the Subsidiary Guarantee shall be valid nevertheless.
In the event that the Trust creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.18 hereof,
the Trust shall cause such Subsidiaries to execute Supplemental Indentures to
this Indenture in the form of Exhibit F hereto and Subsidiary Guarantees in the
form of Exhibit E hereto in accordance with Section 4.18 hereof and this
Article 11, to the extent applicable.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 12.02. Notices.
Any notice or communication by the Trust or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
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If to the Trust:
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
Telecopier No.: (810) 294-1960
Attention: Chief Financial Officer
With a copy to:
Paul Lieberman, P.C.
1471 S. Woodward, Suite 250
Bloomfield Hills, MI 48302
Telecopier No.: (248) 335-4689
If to the Trustee:
The Huntington National Bank
41 South High Street
Columbus, OH 43215
Attention: Corporate Trust Department
Telecopier No.: (614) 480-5223
The Trust or the Trustee, by notice to the others may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives
it.
If the Trust mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
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<PAGE> 106
Section 12.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Trust, 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 Trust to the Trustee to take any
action under this Indenture, the Trust shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
stockholder, manager, member, partner, trustee, beneficiary, special advisor or
member of the successor special advisor group of the Trust or any Guarantor, as
such, shall have any liability for any obligations of the Trust or the
Guarantors under the Notes, the Subsidiary Guarantees, this Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Notes.
Section 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Trust or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10. Successors.
All agreements of the Trust in this Indenture and the Notes shall bind its
successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 5.02.
Section 12.11. Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.13. Table of Contents, Headings, etc.
The Table of Contents and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
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[Signatures on following page]
103
<PAGE> 109
SIGNATURES
VENTURE HOLDINGS TRUST
By: /s/ JAMES E. BUTLER, JR.
------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VEMCO, INC.
By: /s/ JAMES E. BUTLER, JR.
------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE INDUSTRIES CORPORATION
By: /s/ JAMES E. BUTLER, JR.
------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE HOLDINGS CORPORATION
By: /s/ JAMES E. BUTLER, JR.
------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE LEASING COMPANY
By: /s/ JAMES E. BUTLER, JR.
------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
S-1
<PAGE> 110
VENTURE MOLD & ENGINEERING CORPORATION
By: /s/ JAMES E. BUTLER, JR.
-------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE SERVICE COMPANY
By: /s/ JAMES E. BUTLER, JR.
-------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
EXPERIENCE MANAGEMENT LLC
By: /s/ JAMES E. BUTLER, JR.
-------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE EU CORPORATION
By: /s/ JAMES E. BUTLER, JR.
-------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
VENTURE EUROPE, INC.
By: /s/ JAMES E. BUTLER, JR.
-------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
S-2
<PAGE> 111
VENTURE HOLDINGS COMPANY LLC
By: /s/ JAMES E. BUTLER, JR.
------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
------------------------------
Name: Ruth F. Sowers
Title: Authorized Signer
<PAGE> 112
EXHIBIT A
[Face of Note]
CUSIP/CINS ____________
12% Senior Subordinated Notes Due 2009
NO. ___ $____________
VENTURE HOLDINGS TRUST
promises to pay to _____________________________________________________________
or registered assigns, _________________________________________________________
the principal sum of ___________________________________________________________
Dollars on June 1, 2009.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: _______________, 1999.
VENTURE HOLDINGS TRUST
By:
___________________________
Name: James E. Butler, Jr.
Title: Chief Financial Officer
This is one of the Notes referred to
in the within-mentioned Indenture:
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:
__________________________
Authorized Signatory
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<PAGE> 113
[Back of Note]
12% Senior Subordinated Notes due 2009
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.](1)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.](2)
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE,
IF ANY, REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
(1) To be included only on Global Notes.
(2) To be included only on Global Notes deposited with the DTC as
Depositary.
A-2
<PAGE> 114
OF THE UNITED STATES OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT
PRIOR TO SUCH TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES A LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THE NOTES), (C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON CERTIFICATES AND AN OPINION OF COUNSEL IF
THE COMPANY SO REQUESTS), AS LONG AS THE REGISTRAR RECEIVES A CERTIFICATION OF
THE TRANSFEROR AND AN OPINION OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS REQUIRED TO
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTION SET FORTH IN (A) ABOVE." (3)
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Venture Holdings Trust (the "Trust"), promises to pay
interest on the principal amount of this Note at 12% per annum from December 1,
1999 until maturity and shall pay the Liquidated Damages payable pursuant to
Section 4 of the Registration Rights Agreement referred to below. The Trust
will pay interest and Liquidated Damages semi-annually in arrears on June 1 and
December 1 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding interest
(3) To be included only on Restricted Global Notes or Restricted Definitive
Notes.
A-3
<PAGE> 115
Payment Date; provided, further, that the first Interest Payment Date shall be
December 1, 1999. The Trust shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Trust will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the June 1 or December 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium, if any, Liquidated Damages, if any,
and interest at the office or agency of the Trust maintained for such purpose
within or without the City and State of New York, or, at the option of the
Trust, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium, if any, and
Liquidated Damages, if any, on all Global Notes and all other Notes the Holders
of which hold greater than $1.0 million aggregate principal amount of Notes and
which shall have provided wire transfer instructions to the Trust or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. Paying Agent and Registrar. Initially, the Huntington National Bank,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Trust may change any Paying Agent or Registrar without notice to any Holder.
The Trust or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Trust issued the Notes under an Indenture dated as of
May 27, 1999 ("Indenture") between the Trust and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Section Section 77aaa-77bbbb). The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the indenture shall govern and
be controlling. The Notes are obligations of the Trust limited to $175 million
in aggregate principal amount $125 million of which was originally issued under
the Indenture.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the Trust
shall not have the option to redeem the Notes prior to June 1, 2004.
Thereafter, the Trust shall have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below
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<PAGE> 116
plus accrued and unpaid interest and Liquidated Damages thereon to the
applicable redemption date, if redeemed during the twelve-month period
beginning on June 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
2004 106.000%
2005 104.000%
2006 102.000%
2007 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to June 1, 2002, the Trust may redeem up to 35% of the
aggregate principal amount of Notes originally issued under the Indenture at a
redemption price equal to 112.000% of the aggregate principal amount thereof
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date, with net cash proceeds from an Equity Offering; provided that
at least 65% in aggregate principal amount of the Notes originally issued
remain outstanding immediately after the occurrence of such redemption; and
provided, further that such redemption occurs within 120 days of the date of
the closing of such Equity Offering.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Trust shall not be required
to make mandatory redemption or sinking fund payments with respect to the
Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Trust shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 20 days following any Change of
Control, the Trust shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Trust or a Restricted Subsidiary consummates any Asset Sales,
within ten days of each date on which the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Trust shall commence an offer to all Holders of
Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes, including Additional Notes, if
any, that may be purchased out of the Excess Proceeds at an offer price in cash
in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date fixed for
the closing of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Trust or any
Restricted Subsidiary may use such deficiency for general corporate purposes.
If the aggregate principal amount of Notes, including Additional Notes, if any,
surrendered by Holders thereof
A-5
<PAGE> 117
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Trust prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions
thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Trust may require a Holder to pay any taxes and fees required by law or
permitted by the indenture. the trust need not exchange or register the
transfer of any note or portion of a note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Trust
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
10. Subordination. The Notes are subordinated in right of payment, to the
extent and in the manner provided in Article 10 of the Indenture, to the prior
payment in full of all Senior Debt of the Trust and Guarantors. To the extent
provided in the Indenture, Senior Debt must be paid before the Notes may be
paid. The Trust agrees and each Holder of Notes by accepting a Note consents
and agrees to the subordination provided in the Indenture and authorizes the
Trustee to give it effect.
11. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
12. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes, including Additional Notes, if
any, voting as a single class, and any existing default or compliance with any
provision of the Indenture, the Subsidiary Guarantees or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes, including Additional Notes, if any, voting as a single
class. Without the consent of any Holder of a Note, the Indenture, the
Subsidiary Guarantees or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Trust's obligations to Holders of the Notes in case of a successor to the
Trust, to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not
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adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to provide for the
Issuance of Additional Notes in accordance with the limitations set forth in the
Indenture or to allow any Guarantor to execute a supplemental indenture to the
Indenture and/or a Subsidiary Guarantee with respect to the Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on or Liquidated Damages with
respect to the Notes (whether or not prohibited by Article 10 of the Indenture);
(ii) default in payment when due of principal of or premium, if any, on the
Notes (whether or not prohibited by Article 10 of the Indenture) when the same
becomes due and payable at maturity, upon redemption (including in connection
with an offer to purchase) or otherwise, (iii) failure by the Trust or any
Restricted Subsidiary to comply with Section 4.11 or 4.16 of the Indenture; (iv)
failure by the Trust or any Restricted Subsidiary for 60 days after notice to
the Trust by the Trustee or the Holders of at least 25% in principal amount of
the Notes, including Additional Notes, if any, then outstanding voting as a
single class to observe or perform any other agreement in the Indenture or by
Larry J. Winget to observe and perform any covenant or agreement contained in
the Corporate Opportunity Agreement; (v) default under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Trust or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Trust or
any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, which default (a) is
caused by a Payment Default, as defined in Section 6.01(e) of the Indenture or
(b) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $15.0 million or more; (vi) a final judgment or final
judgments for the payment of money are entered by a court or courts of competent
jurisdiction against the Trust or any of its Restricted Subsidiaries and such
judgment or judgments remain undischarged for a period (during which execution
shall not be effectively stayed or bonded) of 60 days, provided that the
aggregate of all such undischarged judgments exceeds $10 million; (vii) any
Subsidiary Guarantee is terminated for any reason not permitted by the
Indenture, or any Guarantor or any Person acting on behalf of any Guarantor
denies such Guarantor's obligations under its respective Subsidiary Guarantee or
(viii) certain events of bankruptcy or insolvency with respect to the Trust or
any of its Subsidiaries. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture
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except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Trust is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Trust is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH TRUST. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Trust or its Affiliates, and may otherwise deal with the Trust or its
Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, manager, member, partner, trustee, beneficiary,
special advisor or member of the successor special advisor group of the Trust,
as such, shall not have any liability for any obligations of the Trust under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Trust 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 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 Trust will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: _________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Trust. The agent may substitute
another to act for him.
Date:
Your Signature: ___________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*: _____________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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<PAGE> 121
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Trust pursuant
to Section 4.11 or 4.16 of the Indenture, check the appropriate box below:
[ ] Section 4.11 [ ] Section 4.16
If you want to elect to have only part of the Note purchased by the
Trust pursuant to Section 4.11 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ ____________________
Date:
Your Signature: ____________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: ____________________
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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<PAGE> 122
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease in Amount of increase in of this Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- -------------------- --------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
</TABLE>
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<PAGE> 123
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
[Registrar address block]
Re: 12% Senior Subordinated Notes Due 2009
Reference is hereby made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between Venture Holdings Trust, as issuer (the "Trust"), and The
Huntington National Bank, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time
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<PAGE> 124
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note, the Regulation S Temporary Global Note and/or the Definitive Note
and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Trust or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of
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<PAGE> 125
Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal
amount of Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such Transfer
is in compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI Global
Note and/or the Definitive Notes and in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
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<PAGE> 126
This certificate and the statements contained herein are made for your benefit
and the benefit of the Trust.
_________________________________________
[Insert Name of Transferor]
By: ____________________________________
Name:
Title:
Dated: _____________________
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<PAGE> 127
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
(ii) [ ] Regulation S Global Note (CUSIP ), or
(iii) [ ] IAI Global Note (CUSIP ); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
(ii) [ ] Regulation S Global Note (CUSIP ), or
(iii) [ ] IAI Global Note (CUSIP ); or
(iv) [ ] Unrestricted Global Note (CUSIP ); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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<PAGE> 128
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
[Registrar address block]
Re: 12% Senior Subordinated Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between Venture Holdings Trust, as issuer (the "Trust"), and The
Huntington National Bank, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without
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<PAGE> 129
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
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<PAGE> 130
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust.
_________________________________________
[Insert Name of Transferor]
By: _____________________________________
Name:
Title:
Dated: _______________________________
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<PAGE> 131
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Venture Holdings Trust
33662 James J. Pompo Drive
P.O. Box 278
Fraser, MI 48026-0278
[Registrar address block]
Re: 12% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between Venture Holdings Trust, as issuer (the "Trust"), and The
Huntington National Bank, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Trust or any subsidiary thereof, (B) in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to you and to the Trust a signed letter substantially
in the form of this letter and , if such transfer is in respect of a principal
amount of Notes, at the time of transfer of less than $250,000, an Opinion of
Counsel in form
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<PAGE> 132
reasonably acceptable to the Trust to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the Trust
such certifications, legal opinions and other information as you and the Trust
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Trust are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
_________________________________________
[Insert Name of Accredited Investor]
By: ____________________________________
Name:
Title:
Dated: _______________________________
D-2
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EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor Person
under the Indenture) has, jointly and severally, unconditionally guaranteed, to
the extent set forth in the Indenture and subject to the provisions in the
Indenture dated as of May 27, 1999 (the "Indenture") among Venture Holdings
Trust and The Huntington National Bank, as trustee (the "Trustee"), (a) the due
and punctual payment of the principal of, premium, if any, and interest on the
Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of the Trust to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee. Each Holder of a Note, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Subsidiary Guarantee shall
cease to be so subordinated and subject in right of payment upon any defeasance
of this Note in accordance with the provisions of the Indenture.
[NAME OF GUARANTOR(S)]
By: ____________________________________
Name:
Title:
F-1
<PAGE> 134
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "Supplemental Indenture"), dated as of
_____________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Venture Holdings Trust (the "Trust"), the other Guarantors (as
defined in the Indenture referred to herein) and The Huntington National Bank,
as trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Trust has heretofore executed and delivered to the Trustee an
indenture (the "Indenture"), dated as of May 27, 1999 providing for the issuance
of an aggregate principal amount of up to $175.0 million of 12% Senior
Subordinated Notes due 2009 of which $125.0 million was issued on the date of
the Indenture (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Trust's Obligations under the Notes and the Indenture and
become party to such Indenture on the terms and conditions set forth herein (the
"Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing
Subsidiary and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees
as follows:
(a) Along with all Guarantors that become party to the Indenture, to
jointly and severally and unconditionally guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the Notes or the obligations of the Trust hereunder or thereunder,
that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other obligations of
the Trust to the Holders or the Trustee hereunder or thereunder will be
F-1
<PAGE> 135
promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid
in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately. Each
Guarantor agrees that this is a guarantee of payment and not a guarantee
of collection.
(b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Trust, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Trust, any right to require a proceeding first against the Trust,
protest, notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise to
return to the Trust, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Trust or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantee.
F-2
<PAGE> 136
(i) The Subsidiary Guarantees shall be subordinated to the extent and in
the manner provided in Section 11.02 of the Indenture, to the prior payment in
full of all obligations on Senior Guarantees.
(j) Pursuant to Section 11.03 of the Indenture, after giving effect to any
maximum amount and any other contingent and fixed liabilities that are relevant
under any applicable Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive contribution from or payments
made by or on behalf of any other Guarantor in respect of the obligations of
such other Guarantor under Article 11 of the Indenture, this new Subsidiary
Guarantee shall be limited to the maximum amount permissible such that the
obligations of such Guarantor under this Subsidiary Guarantee will not
constitute a fraudulent transfer or conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees (a) that
the Subsidiary Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee;
(b) by execution of this Supplemental Indenture, to be party to, and bound by,
the terms of the Indenture, as supplemented hereby; and (c) that if an Officer
whose signature is on this Supplemental Indenture no longer holds that office
at the time the Trustee authenticates the Note on which a Subsidiary Guarantee
is endorsed or at the time the Trustee accepts delivery of the executed
Supplemental Indenture, this Supplemental Indenture shall be valid
nevertheless.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:
(i) subject to Sections 11.04 and 11.05 of the Indenture, the Person
formed by or surviving any such consolidation or merger (if other than a
Guarantor or the Trust) unconditionally assumes all the obligations of
such Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture and the Subsidiary Guarantee on the terms set forth herein or
therein; and
(ii) immediately after giving effect to such transaction, no Default
or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Trust
and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under the Indenture as the
Subsidiary
F-3
<PAGE> 137
Guarantees theretofore and thereafter issued in accordance with the terms of
the indenture as though all of such Subsidiary Guarantees had been issued at
the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the indenture or
in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Trust or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Trust or another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the Capital Stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transaction) a
Subsidiary of the Trust, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the Capital
Stock of such Guarantor) or the Person acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture, including
without limitation Section 4.11 of the Indenture. Upon delivery by the Trust to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Trust in accordance with the
provisions of the Indenture, including without limitation Section 4.11 of the
Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article 11 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder, manager, member, partner, trustee,
beneficiary, special advisor, member of the successor special advisor group, or
agent of the Guaranteeing Subsidiary, as such, shall have any liability for any
obligations of the Trust or any Guaranteeing Subsidiary under the Notes, any
Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF
F-4
<PAGE> 138
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Trust.
F-5
<PAGE> 139
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS SUPPLEMENTAL
INDENTURE TO BE DULY EXECUTED AND ATTESTED, ALL AS OF THE DATE FIRST ABOVE
WRITTEN.
DATED: _______________, ____
[GUARANTEEING SUBSIDIARY]
BY: _______________________________
NAME:
TITLE:
VENTURE HOLDINGS TRUST
BY: _______________________________
NAME:
TITLE:
[EXISTING GUARANTORS, IF ANY]
BY:_________________________________
NAME:
TITLE:
THE HUNTINGTON NATIONAL BANK,
AS TRUSTEE
BY:________________________________
AUTHORIZED SIGNATORY
F-6
<PAGE> 140
EXHIBIT G
[OPINION OF SPECIAL TAX COUNSEL]
TO THE TRUSTEE:
LADIES AND GENTLEMEN:
WE HAVE ACTED AS SPECIAL TAX COUNSEL TO VENTURE HOLDINGS TRUST, A TRUST
ORGANIZED UNDER THE LAWS OF MICHIGAN, AND ITS SUCCESSORS (THE "TRUST"), IN
CONNECTION WITH THE EXECUTION OF THE $125,000,000 11% SENIOR NOTES DUE 2007 AND
$125,000,000 12% SENIOR SUBORDINATED NOTES DUE 2009 (COLLECTIVELY, THE "NOTES")
BY THE TRUST IN FAVOR OF VARIOUS ENTITIES PURSUANT TO AN INDENTURE (THE
"INDENTURE"), DATED AS OF MAY 27, 1999, AMONG THE TRUST AND THE HUNTINGTON
NATIONAL BANK, AS TRUSTEE. THIS OPINION IS DELIVERED PURSUANT TO SECTION 4.07
OF THE INDENTURE. CAPITALIZED TERMS NOT DEFINED HEREIN SHALL HAVE THE MEANINGS
ASCRIBED TO THEM IN THE INDENTURE.
WE HAVE EXAMINED (I) THE VENTURE TRUST AGREEMENT (THE "TRUST AGREEMENT"),
DATED AS OF DECEMBER 28, 1987, BETWEEN CITIZENS COMMERCIAL & SAVINGS BANK, A
MICHIGAN CORPORATION, AS TRUSTEE, AND LARRY J. WINGET, AS SETTLOR, AS AMENDED
BY FIRST AMENDMENT TO VENTURE HOLDINGS TRUST, DATED APRIL 5, 1990, AS AMENDED
BY SECOND AMENDMENT TO VENTURE HOLDINGS TRUST, DATED OCTOBER 29, 1993, AS
AMENDED AND RESTATED IN ITS ENTIRETY AS OF FEBRUARY 16, 1994, AS AMENDED, (II)
THE NOTES, (III) THE INDENTURE AND (IV) SUCH FURTHER DOCUMENTS, AND MADE SUCH
FURTHER INVESTIGATIONS AS WE DEEM NECESSARY IN ORDER TO RENDER THE OPINION SET
FORTH BELOW. IN ADDITION, WE HAVE REVIEWED THE PERTINENT STATUTES,
REGULATIONS, PROPOSED REGULATIONS, CASE LAW AND RULINGS.
BASED ON THE FOREGOING, WE ARE OF THE OPINION THAT:
AS OF THE DATE HEREOF, THE TRUST AND EACH OF THE INVESTEE COMPANIES WILL
BE TREATED FOR FEDERAL INCOME TAX PURPOSES AS PASS-THROUGH ENTITIES.
THE BENEFICIARIES OF THE TRUST SHALL BE TREATED AS THE OWNERS OF THE
ENTIRE PORTION OF THE TRUST WHICH CONSISTS OF THE OWNERSHIP INTERESTS IN THE
INVESTEE COMPANIES AND SHALL BE REQUIRED TO INCLUDE IN THEIR TAXABLE INCOME THE
INCOME, DEDUCTIONS AND CREDITS OF THE TRUST ATTRIBUTABLE TO SUCH PORTION.
G-1
<PAGE> 1
EXHIBIT 4.2.1
FIRST SUPPLEMENTAL INDENTURE
This First Supplemental Indenture (the "Supplemental Indenture") to the
Indenture, dated as of May 27, 1999, by and among Venture Holdings Trust, a
grantor trust organized under the laws of Michigan (the "Trust") and The
Huntington National Bank, a national banking association, as Trustee (the
"Trustee") (the "Indenture") is made as of the 27th day of May, 1999 by and
among the Trust and the Trustee.
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee
the Indenture, which relates to the Issuers 12% Senior Subordinated Notes due
2009 (the "Notes"); and
WHEREAS, Section 5.01 of the Indenture permits the Trust to make a Trust
Contribution and, pursuant to the terms of a Trust Contribution Agreement (the
"Contribution Agreement"), dated as of the date hereof, the Trust has made a
Trust Contribution by contributing all of the Equity Interests of the
Subsidiaries (other than the Equity Interests in Venture Holdings Company LLC,
the Subsidiary that received such contribution) held by it to Venture Holdings
Company LLC, a Michigan limited liability company, all as more particularly set
forth in the Contribution Agreement; and
WHEREAS, Venture Holdings Company LLC intends to assume all the obligations
of the Trust under the Notes and the Indenture; and
WHEREAS, pursuant to Section 5.02 of the Indenture, from and after the date
hereof Venture Holdings Company LLC shall succeed to, and be substituted for (so
that the provisions referring to the "Trust" shall refer instead to Venture
Holdings Company LLC and not Venture Holdings Trust), and may exercise every
right and power of the Trust under the Indenture with the same effect as if
Venture Holdings Company LLC had been named in the Indenture as Trust, and the
Trust shall be released from the obligations under the Notes and the Indenture;
and
WHEREAS, pursuant to Sections and 9.01(c) of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the forgoing, each of the Issuers,
Venture Holdings Company LLC and the Trustee mutually covenant and agree as
follows:
i. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the
Indenture.
ii. Agreement to Assume Obligations. Venture Holdings Company
LLC hereby agrees to assume all the obligations of the Trust
under the Notes and the Indenture and to be bound by all other
applicable provisions of the Indenture.
<PAGE> 2
iii. Trust Obligations. The Trust shall be relieved of all
obligations under the Notes and the Indenture.
iv. Governing Law. The internal laws of the State of New York
shall govern this Supplemental Indenture, without regard to the
conflict of laws provisions thereof.
vi. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
vi. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
vii. The Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture, or for or in respect
of the recitals contained herein, all of which recitals are made
solely by the Issuers, Venture Holdings Company LLC and the
Guarantors.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
VENTURE HOLDINGS TRUST
VENTURE HOLDINGS COMPANY LLC
By: /s/ JAMES E. BUTLER
---------------------------------------
James E. Butler, Executive Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
--------------------------------------
Authorized Signer
<PAGE> 1
EXHIBIT 4.3.1
FIRST AMENDMENT TO INDENTURE
THIS FIRST AMENDMENT to the Indenture, dated as of July 1, 1997, by and
among Venture Holdings Trust, a grantor trust organized under the laws of
Michigan (the "Trust"), Vemco, Inc., Vemco Leasing, Inc., Venture Industries
Corporation, Venture Holdings Corporation, Venture Leasing Company, Venture Mold
& Engineering Corporation, and Venture Service Company, each a Michigan
corporation (each an "Issuer" and, together with the Trust, the "Issuers") and
The Huntington National Bank, a national banking association, as Trustee (the
"Trustee") is made as of the 27th day of May, 1999 by and among the Issuers and
the Trustee.
Section 9.1 of the Indenture provides, among other things, that the
Issuers, when authorized by Board Resolutions (such term and all other
capitalized terms used and not defined herein shall have the meanings assigned
to such terms in the Indenture), and the Trustee may amend the Indenture,
without the consent of any Holder, for certain purposes, as set forth therein.
This Amendment is being entered into for the purposes set forth in Section
9.1(1) and has been duly authorized by the Special Advisor of the Trust and by
the Board of Directors of each other Issuer.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENT TO THE INDENTURE
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
(a) Section 1.1 of the Indenture is hereby amended by deleting subclause
(ii) of the proviso appearing at the end of the definition of "Restricted
Payment" and substituting therefor the following:
"(ii) any dividend, distribution or other payment, directly or indirectly
through the ownership structure, to the Issuers, or to any of the Guarantors, by
the Issuers or any of their Subsidiaries."
Section 2. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS AMENDMENT.
<PAGE> 2
Section 3. HEADINGS
The Headings of the Sections of this Amendment have been inserted for
convenience of reference only, are not to be considered a part of this Amendment
and shall in no way modify or restrict any of the terms or provisions hereof.
Section 4. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Amendment. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 5. THE TRUSTEE.
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Amendment or for or in respect of
the recitals contained herein, all of which recitals are made solely by the
Issuers.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered, all as of the date first written above.
VENTURE HOLDINGS TRUST
VEMCO, INC.
VEMCO LEASING, INC.
VENTURE INDUSTRIES CORPORATION
VENTURE HOLDINGS CORPORATION
VENTURE LEASING COMPANY
VENTURE MOLD & ENGINEERING
CORPORATION
VENTURE SERVICE COMPANY
By: /s/ MICHAEL G. TORAKIS
--------------------------------------
Michael G. Torakis, President
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
--------------------------------------
Authorized Signer
2
<PAGE> 1
EXHIBIT 4.3.2
FIRST SUPPLEMENTAL INDENTURE
This First Supplemental Indenture (the "Supplemental Indenture") to the
Indenture, dated as of July 1, 1997, as amended by the First Amendment to
Indenture, dated as of May 27, 1999 (the "Indenture"), by and among Venture
Holdings Trust, a grantor trust organized under the laws of Michigan (the
"Trust"), Vemco, Inc., Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company, Venture Mold &
Engineering Corporation, and Venture Service Company, each a Michigan
corporation (each an "Issuer" and, together with the Trust, the "Issuers") and
The Huntington National Bank, a national banking association, as Trustee (the
"Trustee") is made as of the 27th day of May, 1999 by and among the Issuers, the
Guarantors named herein and the Trustee.
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee
the Indenture, which relates to the Issuers 9-1/2% Senior Notes due 2005 (the
"Notes"); and
WHEREAS, each of Venture Holdings Company LLC, a Michigan limited liability
company; Experience Management LLC, a Michigan limited liability company;
Venture Europe, Inc., a Michigan corporation; and Venture EU Corporation, a
Michigan corporation, is a Subsidiary of the Trust (each a "Guarantor" and,
collectively, the "Guarantors"); and
WHEREAS, on the date hereof, the Issuers have satisfied and discharged
their obligations under the Issuers' 9-3/4% Senior Subordinated Notes due 2004
(the "Senior Subordinated Notes"); and
WHEREAS, Section 4.16 of the Indenture requires that Subsidiaries (other
than Foreign Subsidiaries) of the Issuers shall, after the Senior Subordinated
Notes are no longer outstanding, jointly and severally guarantee, irrevocably
and unconditionally, all principal, premium, if any, and interest and Liquidated
Damages, if any, on the Notes on a senior basis, all in accordance with Article
XI of the Indenture; and
WHEREAS, pursuant to Section 9.1(3) of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the forgoing, each of the Issuers, each
of the Guarantors and the Trustee mutually covenant and agree as follows:
i. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the
Indenture.
ii. Guarantees. Each Guarantor agrees to execute and deliver its
Guarantee, and to become a Guarantor, under Article XI of the
Indenture. Each Guarantor further agrees that its Guarantee is
subject to all of the terms
<PAGE> 2
and conditions of Article XI of the Indenture, and hereby
confirms that by executing this Supplemental Indenture, it is
making all agreements required to be made by it in this
Supplemental Indenture pursuant to Article XI.
ii. Governing Law. The internal laws of the State of New York
shall govern this Supplemental Indenture, without regard to the
conflict of laws provisions thereof.
iii. Counterparts. This Supplemental Indenture may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
iv. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
v. The Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture, or for or in respect
of the recitals contained herein, all of which recitals are made
solely by the Issuers and the Guarantors.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
VENTURE HOLDINGS TRUST
VEMCO, INC.
VEMCO LEASING, INC.
VENTURE INDUSTRIES CORPORATION
VENTURE HOLDINGS CORPORATION
VENTURE LEASING COMPANY
VENTURE MOLD & ENGINEERING
CORPORATION
VENTURE SERVICE COMPANY
EXPERIENCE MANAGEMENT LLC
VENTURE EUROPE, INC.
VENTURE EU CORPORATION
VENTURE HOLDINGS COMPANY LLC
By: /s/ MICHAEL G. TORAKIS
--------------------------------------
Michael G. Torakis, President
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
--------------------------------------
Authorized Signer
3
<PAGE> 1
EXHIBIT 4.3.3
SECOND AMENDMENT TO INDENTURE
THIS SECOND AMENDMENT to the Indenture, dated as of July 1, 1997, as
amended by the First Amendment to Indenture, and as supplemented by the First
Supplemental Indenture, each dated as of May 27, 1999, by and among Venture
Holdings Trust, a grantor trust organized under the laws of Michigan (the
"Trust"), Vemco, Inc., Vemco Leasing, Inc., Venture Industries Corporation,
Venture Holdings Corporation, Venture Leasing Company, Venture Mold &
Engineering Corporation, and Venture Service Company, each a Michigan
corporation (each an "Issuer" and, together with the Trust, the "Issuers") and
The Huntington National Bank, a national banking association, as Trustee (the
"Trustee") is made as of the 27th day of May, 1999 by and among the Issuers and
the Trustee.
Section 9.1 of the Indenture provides, among other things, that the
Issuers, when authorized by Board Resolutions (such term and all other
capitalized terms used and not defined herein shall have the meanings assigned
to such terms in the Indenture), and the Trustee may amend the Indenture,
without the consent of any Holder, for certain purposes, as set forth therein.
This Amendment is being entered into for the purposes set forth in Section
9.1(2) and has been duly authorized by the Special Advisor of the Trust and by
the Board of Directors of each other Issuer.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO THE INDENTURE
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
(a) Section 1.1 of the Indenture is hereby amended by deleting the
definition of "Beneficiary" and substituting therefor the following (italicized
text indicates changes from the current definition):
"Beneficiary" means (i) any beneficiary of the Trust while it is a trust or
(ii) any shareholder or holder of the Equity Interests of a successor
corporation or limited liability company after a Trust Contribution.
(b) Section 1.1 of the Indenture is hereby amended by deleting the
definition of "Board of Directors" and substituting therefor the following
(italicized text indicates changes from the current definition):
"Board of Directors" means (A) either the board of directors or managers of
any Issuer or Subsidiary, as the case may be, or any duly authorized committee
of either such board and (B), in
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the case of the Trust, the Special Advisor of the Trust; provided that (i), in
the event the Special Advisor's rights, duties and powers are assumed by the
Successor Special Advisor Group, "Board of Directors" means the Successor
Special Advisor Group of the Trust and (ii), in the event the Trust is
reorganized as a corporation or a limited liability company or a Trust
Contribution shall occur, "Board of Directors" means the board of directors or
managers or managing members of the successor corporation or limited liability
company.
(c) Section 1.1 of the Indenture is hereby amended by deleting the
definition of "Change of Control" and substituting therefor the following
(italicized text indicates changes from the current definition):
"Change of Control" means (i) any merger or consolidation of the Trust with
or into any person or any sale, transfer or other conveyance, whether direct or
indirect, of all or substantially all of the assets of the Trust, on a
consolidated basis, in one transaction or a series of related transactions, if
immediately after giving effect to such transaction(s), any "person" or "group"
(as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) other than an Excluded Person is or becomes the
"beneficial owner," directly or indirectly, of more than 40% of the total voting
power in the aggregate normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the transferee(s) or surviving entity
or entities and the Excluded Persons "beneficially own" a lesser percentage and
do not have the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of such directors, managers or trustees, as
applicable, (ii) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) other
than an Excluded Person is or becomes the "beneficial owner," directly or
indirectly, of more than 40% of the total voting power in the aggregate of all
classes of Capital Stock of the Trust then outstanding normally entitled to vote
in elections of directors, managers or trustees and the Excluded Persons
"beneficially own" a lesser percentage and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of such directors, managers or trustees, as applicable, or (iii) during
any period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of the
Trust (together with any new directors whose election by such Board or whose
nomination for election by the equity holders of the Trust, (A) with respect to
Venture Holdings Trust was made pursuant to the terms of the Venture Trust
Instrument, and (B) with respect to Venture Holdings Corporation or another
successor to the Trust, or their respective successors, after the occurrence of
a Trust Contribution, (x) was approved by the Beneficiary of Venture Holdings
Trust on or before the date of the Trust Contribution, or (y) was approved by a
majority of the directors of the Trust whose appointment, election or nomination
to the Board of Directors was approved in accordance with the preceding clause
(x) or by this clause (y)) cease for any reason to constitute a majority of the
Board of Directors of the Trust then in office. Notwithstanding anything in this
definition to the contrary, a "Change of Control" shall not be deemed to have
occurred solely as a result of a transaction pursuant to which the Trust is
reorganized or reconstituted as a corporation or a limited liability company or
a Trust Contribution occurs in accordance with the provisions described under
Article V and no event which is otherwise a "Change of Control" above shall have
occurred.
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(d) Section 1.1 of the Indenture is hereby amended by deleting the
definition of "Fairness Committee" and substituting therefor the following
(italicized text indicates changes from the current definition):
"Fairness Committee" means a committee duly established pursuant to the
Venture Trust Agreement (or organizational, operating or charter documents of a
successor to the Trust) and the bylaws, organizational, operating or charter
documents, of each other Issuer, Guarantor and Subsidiary without whose approval
(and without the approval of a majority of its Independent members) the Trust,
an Issuer, a Guarantor or a Subsidiary shall not be authorized to enter into any
transaction or take any action which pursuant to the terms of this Indenture
requires approval of the Fairness Committee.
(e) Section 1.1 of the Indenture is hereby amended by deleting the
definition of "Officer" and substituting therefor the following (italicized text
indicates changes from the current definition):
"Officer" means, with respect to the Issuers, the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller or the Secretary or Assistant
Secretary, and in addition with respect to the Trust while it is a trust, the
Special Advisor under the Venture Trust Instrument.
(f) Section 1.1 of the Indenture is hereby amended by deleting the
definition of "Tax Distribution Amount" and substituting therefor the following
(italicized text indicates changes from the current definition):
"Tax Distribution Amount" means, in respect of any period after the Issue
Date during which the Trust is an entity described in Sections 1361(a)(1),
1361(c)(2) or Section 1361(d) of the Code, or, following a Trust Contribution,
is a limited liability company that is disregarded as an entity separate from
its owners under the Code, an amount, described in good faith by such Issuers'
independent public accountants, which shall be a nationally recognized
accounting firm, equal to the sum of (x) the amount of intangibles tax actually
imposed on the Beneficiary of the Trust in respect of Trust Tax Distributions
for such period and (y) (a) the sum of the highest marginal federal income tax
rate and highest state and local income tax rate applicable to the Beneficiary
of the Trust on income of the Issuers which are S Corporations for federal,
state or local income tax purposes for such period, expressed as a percentage,
multiplied by (b) such Issuers' taxable income for such period computed taking
into account, without limitation, the deduction for single business and
franchise tax actually imposed on such Issuers; provided that (i) the foregoing
shall be determined by giving effect to the deduction of relevant state and
local income and intangibles taxes for purposes of determining federal income
taxes, such deduction to be computed based on the state and local income tax
rates applicable in clause (y) (a) hereof and the amount of intangibles tax
determined under clause (x) hereof, and (ii) the foregoing shall be reduced by
the amount of cumulative tax losses of such Issuers from any previous period (to
the extent not previously utilized in computing the Tax Distribution Amounts)
since the Closing Date and any investment tax credits and other tax credits
generated by such Issuers.
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ARTICLE IV
COVENANTS
(a) Section 4.3 of the Indenture is hereby amended by deleting the
paragraph numbered (iii)(a) in the second paragraph thereof and substituting
therefor the following (italicized text indicates changes from the current
paragraph):
"(iii) (a) so long as the Trust is a limited liability company
that is disregarded as an entity separate from its owners under the
Code following a Trust Contribution or is an entity described in
Section 1361(a)(1), 1361(c)(2) or 1361(d) of the Code or any similar
provision of state or local law, (x) the Trust shall be permitted to
distribute to the Beneficiary of the Trust (or pay compensation to the
Beneficiary of the Trust in lieu of such distributions) all amounts
distributed to the Trust pursuant to the following clause (y), and (y)
the Issuers (other than the Trust) in the aggregate shall be permitted
to make payments to the Trust in cash as follows, calculated before
giving effect to such payments (such payments to be referred to
hereinafter as "Trust Tax Distributions"):
(1) on (or within 15 days prior to) each April 15, June 15, Sep
tember 15 and January 15 an amount equal to the minimum federal and
state estimated quarterly income and intangible tax payments required
to be made on such date by the Beneficiary of the Trust in order to
prevent underpayment of estimated income tax pursuant to the rules set
forth in Sections 6654(b) and 6654(d)(1) of the Code or their
successors or supplements and any similar provision of applicable
state income and intangible tax law for any state with respect to
which the Issuers qualify as S corporations for state law purposes,
such amount to be calculated as though such Beneficiary's only income
and loss in each such quarter was an amount equal to the sum of the
taxable income and loss of the Issuers which are S corporations. The
foregoing amounts may be paid so long as (I) such Issuer is and was an
S corporation for such quarter, as defined in Section 1361 of the Code
or its successors and supplements, (II) no Default or Event of Default
exists and is continuing or would thereby occur, (III) special tax
counsel to the Issuers delivers to the Trustee, prior to the payment
in respect of such quarter, an opinion substantially in the form
attached hereto as Exhibit C-1 (or, if the Beneficiary of the Trust is
disabled or unavailable as described in Section 3 of the Venture Trust
Instrument, such special tax counsel delivers to the Trustee, prior to
the payment in respect of such quarter, an opinion substantially in
the form attached hereto as Exhibit C-2), (IV) the Issuers have not
received a private ruling or a National Office Technical Advice
Memorandum from the Internal Revenue Service or, in respect of
distributions made for state income tax purposes, a similar ruling
from any applicable state or local taxing authority, that the Trust is
not a limited liability company that is disregarded as an entity
separate from its owners under the Code or an entity described in
Section 1361(a)(1), 1361(c)(2)
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or 1361(d) of the Code, or their successors and supplements, or any
similar provision of state or local law or there has been a final
"determination" (as used in Section 1313 of the Code) or similar state
determination to the same effect, and (V) the Issuers have complied
with the terms of clauses (b), (c) and (d) below. The amount that is
distributable pursuant to clause (y) by each Issuer which is an S
corporation in respect of each of the quarters described above shall
be that proportion of the amount of the Trust Tax Distribution for
each such quarter which such Issuer's Tax Income for such quarter
bears to the aggregate Tax Income of all the Issuers which are S
corporations in such quarter. For purposes of the foregoing, "Tax
Income" shall mean one-quarter of an Issuer's actual taxable income
for the year prior to that with respect to which the calculations
described above are being made; and
(2) no later than September 15 of each year, the Issuers shall
cause their tax advisors, which shall be a nationally recognized
accounting firm, to deter mine the actual amount of federal and state
income tax liability of the Beneficiary of the Trust for the previous
calendar year computed as if the only income and loss of the
Beneficiary in such year was an amount equal to the sum of the taxable
income and loss of the Issuers which are S corporations (the "Actual
Tax Amount"). The computation of the Actual Tax Amount made by the
Issuers' tax advisors shall be reviewed and reported on by a
nationally recognized accounting firm, which may be the Issuers' tax
advisors. If (A) the Actual Tax Amount, as determined by such tax
advisor, is less than the aggregate estimated amounts paid pursuant to
clause (1) above in respect of such year (the "Distributed Amounts")
and/or (B) if the Actual Tax Amount is at any time finally determined
by the Internal Revenue Service or a court of competent jurisdiction
to be less than that determined by such tax advisors, the Issuers
shall cause the Beneficiary to the Trust, within 75 days after such
difference is determined, to reimburse to the Trust, with no
obligation on the part of the Trust to such Beneficiary with respect
to such reimbursement, the excess of the Distributed Amounts over the
Actual Tax Amount, as finally determined by the tax advisors, the
Internal Revenue Service or court of competent jurisdiction, as the
case may be, or the excess of the Actual Tax Amount, as determined by
the tax advisors, over the Actual Tax Amount as determined by the
Internal Revenue Service or court, as the case may be (in either case,
which excess amount may be offset by any amounts then or subsequently
owed to the Beneficiary by reason of clause (1) above). If the excess
of the Distributed Amounts over the Actual Tax Amount, as finally
determined by the tax advisors, is reimbursed to the Trust after June
14 of such year, such excess shall bear interest from June 15 to the
date preceding the date it is paid at an interest rate equal to the
overpayment rate established under Section 6621(a)(1) of the Code or
its successor and supplements. Such reimbursed amount (if any) shall
then be reimbursed by the Trust to each of the Issuers that first
distributed such amounts to the Trust. If the Actual Tax Amount, as
determined by the tax advisors, the Internal Revenue Service or court,
as the case may be, is greater than the Distributed Amounts, each of
the Issuers which are S corporations shall distribute to
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the Trust, and the Trust shall distribute to the Beneficiary, its
share of the excess of the Actual Amount over the Distributed Amounts,
within 75 days after such difference is determined, provided that no
such distribution shall be made by any of the Issuers unless a
nationally recognized accounting firm shall have reviewed and reported
on the computation of the Actual Tax Amount made by the tax advisors,
which may be the same nationally recognized accounting firm that acts
as the Issuers' tax advisors. If any payment is made (i) in
contravention of clause (1) above and paid to the Beneficiary of the
Trust pursuant to clause (x) above or (ii) in contravention of the
proviso to the immediately preceding sentence and paid to the
Beneficiary of the Trust pursuant to the immediately preceding
sentence, the Issuers shall cause the Beneficiary of the Trust to
reimburse to each of the Issuers making such prohibited payment the
amount of such prohibited payment;
(b) Section 4.3 of the Indenture is hereby amended by deleting the
paragraph numbered (iii)(c) in the second paragraph thereof and substituting
therefor the following (italicized text indicates changes from the current
paragraph):
(c) if at any time the Issuers receive notification from the Internal
Revenue Service that any Issuer does not qualify as an S corporation under
Section 1361(a)(1) of the Code, (x) no further distributions shall be made
pursuant to clause (a)(1) above by such Issuer, and (y) the Issuers shall cause
the Beneficiary of the Trust either (A) to reimburse the Trust all amounts paid
by that Issuer pursuant to clause (a)(1) and clause (a)(2) above with respect to
all periods as to which that Issuer did not qualify as an S corporation, with no
obligation on the part of the Trust to such Beneficiary with respect to such
reimbursement, and the Trust shall then pay such reimbursement to that Issuer,
or (B) to reimburse such Issuer such payments directly, within 75 days after
such requirement for reimbursement is determined; provided that no such
reimbursement shall be required to the extent to which such distribution would
otherwise have been permitted, after taking into account interest, penalties and
additions to tax imposed on such Issuer as a result of its failure to qualify as
an S corporation under Section 1361(a)(1) of the Code, or its successors and
supplements. If the Issuers at any time receive notification from the Internal
Revenue Service that the Trust is not a limited liability company that is
disregarded as an entity separate from its owners under the Code or an entity
described in Section 1361(a)(1), 1361(c)(2) or 1361(d), or their successors and
supple ments, as the case may be, of the Code, or if the Issuers fail to receive
a favorable response to a ruling request described in clause (b) within 360 days
after the disability or unavailability of Larry J. Winget, the Issuers shall
take the actions described in clauses (x) and (y) of the preceding sen tence;
and
ARTICLE V
SUCCESSOR CORPORATION
Article V of the Indenture is hereby amended by deleting Article V in its
entirety and substituting therefor the following (italicized text indicates
changes from the current Article V):
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Section 5.1 Limitation on Merger, Sale or Consolidation.
The Trust will not consolidate with or merge with or into another person or
sell, lease, convey or transfer all or substantially all of its assets (computed
on a consolidated basis), whether in a single transaction or a series of related
transactions, to another person or group of affiliated persons or adopt a plan
of liquidation, unless (i) either (a) the Trust is the continuing entity or (b)
the resulting, surviving or transferee entity or, in the case of a plan of
liquidation, the entity which receives the greatest value from such plan of
liquidation is a corporation or limited liability company organized under the
laws of the United States, any state thereof or the District of Columbia and
expressly assumes by supplemental indenture all of the obligations of the Trust
in connection with the Notes and the Indenture; (ii) no Default or Event of
Default shall exist or shall occur immediately after giving effect on a pro
forma basis to such transaction; (iii) immediately after giving effect to such
transaction on a pro forma basis, the Consolidated Net Worth of the consolidated
surviving or transferee entity or, in the case of a plan of liquidation, the
entity which receives the greatest value from such plan of liquidation is at
least equal to the Consolidated Net Worth of the Trust immediately prior to such
transaction and (iv) immediately after giving effect to the transaction on a Pro
Forma Basis, the consolidated resulting, surviving or transferee entity or, in
the case of a plan of liquidation, the entity which receives the greatest value
from such plan of liquidation would immediately thereafter be permitted to incur
at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio
set forth in Section 4.10.
Notwithstanding anything contained in this Indenture to the contrary, the
Trust is permitted to contribute all of the Equity Interests of the Subsidiaries
then held by the Trust (other than the Equity Interests of the Subsidiary which
is to receive such contribution from the Trust) to Venture Holdings Corporation
or other successor to the Trust (a "Trust Contribution"), provided that (A) any
successor or surviving corporation or limited liability company is organized and
existing under the laws of the United States, any state thereof or the District
of Columbia, (B) such contribution or reorganization is not materially adverse
to Holders of the Notes; it being understood, however, that such contribution or
reorganization shall not be considered materially adverse to Holders of the
Notes solely because the successor or surviving corporation or limited liability
company is subject to income taxation as a corporate entity, (C) immediately
after giving effect to such transaction, no Default or Event of Default exists,
(D) the actions comprising such contribution or reorganization (e.g., the
contribution of Capital Stock of the Subsidiaries, or the issuance of Capital
Stock of the corporation or limited liability company in exchange for assets of
or Equity Interests in the Trust or in exchange for Capital Stock of a
corporation or limited liability company holding such Equity Interests, or the
merger or consolidation of such corporations or limited liability companies)
will not themselves directly result in material income tax liability to the
successor or surviving corporation or limited liability company, (E) the
successor or surviving corporation or limited liability company has assumed all
obligations of the Trust, pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, under the Notes and hereunder and (F)
Holders of the Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such contribution or reorganization and will be
subject to federal income tax on the same amounts, in the same manner,
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and at the same time as would have been the case if such contribution or
reorganization had not occurred. If the successor or surviving corporation or
limited liability company after a Trust Contribution is not a corporation
described in Section 1361(a)(1) of the Code or a limited liability company that
is disregarded as an entity separate from its owners under the Code, the Trust's
ability to make Trust Tax Distributions must terminate prior to such
contribution or reorganization (except with respect to tax distributions in
respect of taxable periods ending on or prior to the date such contribution or
reorganization is effective for relevant tax purposes), other than tax
distributions in respect of Beneficiaries' income tax liability that results
from the actions comprising such contribution or reorganization. The Trust shall
deliver to the Trustee prior to such contribution or reorganization an officers'
certificate covering clauses (A) through (F) and the preceding sentence of this
paragraph, stating that such contribution or reorganization and such
supplemental indenture comply with the Indenture, and an opinion of counsel
covering clauses (A), (D), (E) and (F) above and the preceding sentence of this
paragraph.
Neither any Guarantor nor any Issuer (other than the Trust) shall
consolidate or merge with or into (whether or not such Guarantor or Issuer is
the surviving person) another person (other than an Issuer or Guarantor) unless
(i), subject to the provisions of Section 11.4, the person formed by or
surviving any such consolidation or merger (if other than such Guarantor or
Issuer) assumes all the obligations of such Guarantor or Issuer pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee, pursuant
to which such person shall unconditionally guarantee or assume, on a senior
basis, all of such Guarantor's or Issuer's obligations under the Indenture on
the terms set forth in the Indenture; and (ii) immediately before and
immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred on a Pro Forma Basis.
On or prior to the consummation of the proposed transaction, the Company
shall have delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or disposition and such supplemental indenture
executed in connection therewith comply with this Indenture. The Trustee shall
be entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Trust's interest in which constitutes all or
substantially all of the properties and assets of the Trust shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Trust.
Section 5.2 Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Trust or consummation of a plan of liquidation in
accordance with the foregoing, the successor corporation or limited liability
company formed by such consolidation or into which the Trust is merged or to
which such transfer is made or, in the case of a plan of liquidation, the entity
which receives the greatest value from such plan of liquidation shall succeed
to, and be substituted for, and
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may exercise every right and power of, the Trust under the Indenture with the
same effect as if such successor corporation or limited liability company had
been named therein as an Issuer, and the Trust shall be released from the
obligations under the Notes and the Indenture except with respect to any
obligations that arise from, or are related to, such transaction.
Section 2. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS AMENDMENT.
Section 3. HEADINGS
The Headings of the Sections of this Amendment have been inserted for
convenience of reference only, are not to be considered a part of this Amendment
and shall in no way modify or restrict any of the terms or provisions hereof.
Section 4. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Amendment. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 5. THE TRUSTEE.
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Amendment or for or in respect of
the recitals contained herein, all of which recitals are made solely by the
Issuers.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered, all as of the date first written above.
VENTURE HOLDINGS TRUST
VEMCO, INC.
VEMCO LEASING, INC.
VENTURE INDUSTRIES CORPORATION
VENTURE HOLDINGS CORPORATION
VENTURE LEASING COMPANY
VENTURE MOLD & ENGINEERING
CORPORATION
VENTURE SERVICE COMPANY
By: /s/ MICHAEL G. TORAKIS
--------------------------------------
Michael G. Torakis, President
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
--------------------------------------
Authorized Signer
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EXHIBIT 4.3.4
SECOND SUPPLEMENTAL INDENTURE
This Second Supplemental Indenture (the "Supplemental Indenture") to the
Indenture, dated as of July 1, 1997, as amended by the First Amendment to
Indenture and the Second Amendment to Indenture, each dated as of May 27, 1999,
ans as supplemented by the First Supplemental Indenture, dated as of May 27,
1999 (the "Indenture"), by and among Venture Holdings Trust, a grantor trust
organized under the laws of Michigan (the "Trust"), Vemco, Inc., Vemco Leasing,
Inc., Venture Industries Corporation, Venture Holdings Corporation, Venture
Leasing Company, Venture Mold & Engineering Corporation, and Venture Service
Company, each a Michigan corporation (each an "Issuer" and, together with the
Trust, the "Issuers") and The Huntington National Bank, a national banking
association, as Trustee (the "Trustee") is made as of the 27th day of May, 1999
by and among the Issuers, Venture Holdings Company LLC, a Michigan limited
liability company, and the Trustee.
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee
the Indenture, which relates to the Issuers 9-1/2% Senior Notes due 2005 (the
"Notes"); and
WHEREAS, Section 5.1 of the Indenture permits the Trust to make a Trust
Contribution and, pursuant to the terms of a Trust Contribution Agreement (the
"Contribution Agreement"), dated as of the date hereof, the Trust has made a
Trust Contribution by contributing all of the Equity Interests of the
Subsidiaries (other than the Equity Interests in Venture Holdings Company LLC,
the Subsidiary that received such contribution) held by it to Venture Holdings
Company LLC, a Michigan limited liability company, all as more particularly set
forth in the Contribution Agreement; and
WHEREAS, Venture Holdings Company LLC intends to assume all the obligations
of the Trust under the Notes and the Indenture; and
WHEREAS, pursuant to Section 5.2 of the Indenture, from and after the date
hereof Venture Holdings Company LLC shall succeed to, and be substituted for (so
that the provisions referring to the "Trust" shall refer instead to Venture
Holdings Company LLC and not Venture Holdings Trust), and may exercise every
right and power of the Trust under the Indenture with the same effect as if
Venture Holdings Company LLC had been named in the Indenture as an Issuer, and
the Trust shall be released from the obligations under the Notes and the
Indenture except with respect to any obligations that arise from, or are related
to, the Trust Contribution; and
WHEREAS, pursuant to Sections and 9.1(4) of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the forgoing, each of the Issuers,
Venture Holdings Company LLC and the Trustee mutually covenant and agree as
follows:
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i. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the
Indenture.
ii. Agreement to Assume Obligations. Venture Holdings Company
LLC hereby agrees to assume all the obligations of the Trust
under the Notes and the Indenture and to be bound by all other
applicable provisions of the Indenture.
iii. Trust Obligations. The Trust shall be relieved of all
obligations under the Notes and the Indenture except with respect
to any obligations that arise from, or are related to, the Trust
Contribution.
iv. Governing Law. The internal laws of the State of New York
shall govern this Supplemental Indenture, without regard to the
conflict of laws provisions thereof.
vi. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
vi. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
vii. The Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture, or for or in respect
of the recitals contained herein, all of which recitals are made
solely by the Issuers, Venture Holdings Company LLC and the
Guarantors.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
VENTURE HOLDINGS TRUST
VEMCO, INC.
VEMCO LEASING, INC.
VENTURE INDUSTRIES CORPORATION
VENTURE HOLDINGS CORPORATION
VENTURE LEASING COMPANY
VENTURE MOLD & ENGINEERING
CORPORATION
VENTURE SERVICE COMPANY
VENTURE HOLDINGS COMPANY LLC
By: /s/ MICHAEL G. TORAKIS
--------------------------------------
Michael G. Torakis, President
THE HUNTINGTON NATIONAL BANK
By: /s/ RUTH F. SOWERS
--------------------------------------
Authorized Signer
<PAGE> 1
EXHIBIT 4.3.5
GUARANTEE
For Value received, Experience Management LLC, Michigan limited liability
company, hereby irrevocably, unconditionally guarantees on a senior basis to the
Holder of the Security upon which this Guarantee is endorsed the due and
punctual payment, as set forth in the Indenture pursuant to which such Security
and this Guarantee were issued, of the principal of, premium (if any) and
interest (and Liquidated Damages, if any) on such Security when and as the same
shall become due and payable for any reason according to the terms of such
Security and Article XI of the Indenture. The Guaranty of the Security upon
which this Guarantee is endorsed will not become effective until the Trustee
signs the certificate of authentication on such Security. The Guarantee is
designated "Designated Senior Debt" for all purposes under the indenture
governing the Issuers' 12% Senior Subordinated Notes due 2009.
IN WITNESS WHEREOF, Experience Management LLC has caused this Guarantee to
be duly executed on this 27th day of May, 1999.
EXPERIENCE MANAGEMENT LLC
By: /s/ JAMES E. BUTLER
-----------------------------------------
James E. Butler, Executive Vice President
Attest: /s/ A. JAMES SCHUTZ
-------------------------------
A. James Schutz, Vice Chairman
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Guarantees described in Article XI of the Indenture.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By: /s/ RUTH F. SOWERS
-----------------------------------------
Name: Ruth F. Sowers
Title: Authorized Signer
<PAGE> 1
EXHIBIT 4.3.6
GUARANTEE
For Value received, Venture Holdings Company LLC, Michigan limited
liability company, hereby irrevocably, unconditionally guarantees on a senior
basis to the Holder of the Security upon which this Guarantee is endorsed the
due and punctual payment, as set forth in the Indenture pursuant to which such
Security and this Guarantee were issued, of the principal of, premium (if any)
and interest (and Liquidated Damages, if any) on such Security when and as the
same shall become due and payable for any reason according to the terms of such
Security and Article XI of the Indenture. The Guaranty of the Security upon
which this Guarantee is endorsed will not become effective until the Trustee
signs the certificate of authentication on such Security. The Guarantee is
designated "Designated Senior Debt" for all purposes under the indenture
governing the Issuers' 12% Senior Subordinated Notes due 2009.
IN WITNESS WHEREOF, Venture Holdings Company LLC has caused this Guarantee
to be duly executed on this 27th day of May, 1999.
VENTURE HOLDINGS COMPANY LLC
By: /s/ JAMES E. BUTLER
-----------------------------------------
James E. Butler, Executive Vice President
Attest: /s/ A. JAMES SCHUTZ
-------------------------------
A. James Schutz, Vice Chairman
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Guarantees described in Article XI of the Indenture.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By: /s/ RUTH F. SOWERS
-----------------------------------------
Name: Ruth F. Sowers
Title: Authorized Signer
<PAGE> 1
EXHIBIT 4.3.7
GUARANTEE
For Value received, Venture Europe, Inc., Michigan corporation, hereby
irrevocably, unconditionally guarantees on a senior basis to the Holder of the
Security upon which this Guarantee is endorsed the due and punctual payment, as
set forth in the Indenture pursuant to which such Security and this Guarantee
were issued, of the principal of, premium (if any) and interest (and Liquidated
Damages, if any) on such Security when and as the same shall become due and
payable for any reason according to the terms of such Security and Article XI of
the Indenture. The Guaranty of the Security upon which this Guarantee is
endorsed will not become effective until the Trustee signs the certificate of
authentication on such Security. The Guarantee is designated "Designated Senior
Debt" for all purposes under the indenture governing the Issuers' 12% Senior
Subordinated Notes due 2009.
IN WITNESS WHEREOF, Venture Europe, Inc. has caused this Guarantee to be
duly executed on this 27th day of May, 1999.
VENTURE EUROPE, INC.
By: /s/ JAMES E. BUTLER
-----------------------------------------
James E. Butler, Executive Vice President
Attest: /s/ A. JAMES SCHUTZ
-------------------------------
A. James Schutz, Vice Chairman
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Guarantees described in Article XI of the Indenture.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By: /s/ RUTH F. SOWERS
-----------------------------------------
Name: Ruth F. Sowers
Title: Authorized Signer
<PAGE> 1
EXHIBIT 4.3.8
GUARANTEE
For Value received, Venture EU Corporation, Michigan corporation, hereby
irrevocably, unconditionally guarantees on a senior basis to the Holder of the
Security upon which this Guarantee is endorsed the due and punctual payment, as
set forth in the Indenture pursuant to which such Security and this Guarantee
were issued, of the principal of, premium (if any) and interest (and Liquidated
Damages, if any) on such Security when and as the same shall become due and
payable for any reason according to the terms of such Security and Article XI of
the Indenture. The Guaranty of the Security upon which this Guarantee is
endorsed will not become effective until the Trustee signs the certificate of
authentication on such Security. The Guarantee is designated "Designated Senior
Debt" for all purposes under the indenture governing the Issuers' 12% Senior
Subordinated Notes due 2009.
IN WITNESS WHEREOF, Venture EU Corporation has caused this Guarantee to be
duly executed on this 27th day of May, 1999.
VENTURE EU CORPORATION
By: /s/ JAMES E. BUTLER
-----------------------------------------
James E. Butler, Executive Vice President
Attest: /s/ A. JAMES SCHUTZ
-------------------------------
A. James Schutz, Vice Chairman
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Guarantees described in Article XI of the Indenture.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By: /s/ RUTH F. SOWERS
-----------------------------------------
Name: Ruth F. Sowers
Title: Authorized Signer
<PAGE> 1
Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of May 27, 1999, among Venture Holdings Trust, a grantor trust organized
under the laws of Michigan (the "Trust"), Vemco, Inc., Vemco Leasing, Inc.,
Venture Industries Corporation, Venture Holdings Corporation, Venture Leasing
Company, Venture Mold & Engineering Corporation, Venture Service Company,
Venture Europe, Inc. and Venture EU Corporation, each a Michigan corporation,
and Experience Management LLC and Venture Holdings Company LLC, each a Michigan
limited liability company (each a "Guarantor" and, together with the Trust, the
"Issuers"), and Banc One Capital Markets, Inc., and Goldman Sachs & Co.
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated May 25,
1999 amongthe Issuers and the Initial Purchasers (the "Purchase Agreement"),
which provides for the sale by the Trust to the Initial Purchasers of
$125,000,000 aggregate principal amount of 12% Senior Subordinated Notes due
2009 (the "Senior Subordinated Notes") and $125,000,000 11% Senior Notes due
2007 (the "Senior Notes") (the Senior Subordinated Notes, the Senior Notes and
the guarantees of the Senior Notes and the Senior Subordinated Notes by the
Guarantors, the "Securities"). In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Issuers have agreed to provide to the
Initial Purchasers and their respective direct and indirect transferees, among
other things, the registration rights for the Securities set forth in this
Agreement. The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings (and, unless otherwise indicated, capitalized terms used
herein without definition shall have the meanings ascribed to them by the
Purchase Agreement):
Advice: See Section 5.
Applicable Period: See Section 2.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Effectiveness Period: See Section 3.
Effectiveness Target Date: The 150th day following the Closing Date.
Event Date: See Section 4.
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<PAGE> 2
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2.
Exchange Offer Registration Statement: See Section 2.
Exchange Securities: See Section 2.
Filing Date: The 90th day after the Closing Date.
Holder: Any holder of Transfer Restricted Securities.
Indenture or Indentures: (i) The Senior Subordinated Indenture, dated
as of the date hereof, among the Issuers and The Huntington National Bank, as
trustee, pursuant to which the Senior Subordinated Notes are being issued, as
amended or supplemented from time to time in accordance with the terms thereof
and (ii) the Senior Indenture, dated as of the date hereof, among the Issuers
and The Huntington National Bank, as trustee, pursuant to which the Senior Notes
are being issued, as amended or supplemented from time to time in accordance
with the terms thereof.
Initial Purchasers: See the introductory paragraph to this Agreement.
Issuers: See the introductory paragraph of this Agreement.
Liquidated Damages: See Section 4.
Participating Broker-Dealer: See Section 2.
Person: An individual, trustee, corporation, partnership, joint stock
company, trust, limited liability company, unincorporated association, union,
business association, firm or other legal entity.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Exchange Securities and/or the Transfer Restricted Securities (as
applicable) covered by such Registration Statement, and all other amendments and
supplements to the
2
<PAGE> 3
Prospectus, including posteffective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
Registration Default: See Section 4.
Registration Statement: Any registration statement of the Issuers,
including, but not limited to, the Exchange Offer Registration Statement or the
Shelf Registration, that covers any of the Transfer Restricted Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
Rule 415.: Rule 415 promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: See the introductory paragraphs to this Agreement
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2.
Shelf Registration: See Section 3.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: The Securities upon original issuance
thereof and at all times subsequent thereto, until in the case of any such
Securities (i) a Registration
3
<PAGE> 4
Statement covering such Securities has been declared effective by the SEC and
such Securities have been disposed of in accordance with such effective
Registration Statement, (ii) such Securities are sold in compliance with Rule
144 or (iii) such Securities cease to be outstanding.
Trustee: The trustee under the Indentures and if existent, the trustee
under the indenture governing the Exchange Securities.
Underwritten registration or underwritten offering. A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
1. The Issuers agree to file with the SEC as soon as practicable after
the Closing Date, but in no event later than the Filing Date, an offer to
exchange (the "Exchange Offer") any and all of the Transfer Restricted
Securities for a like aggregate principal amount of debt securities of the
Issuers which are substantially identical in all material respects to the
Securities (and which are entitled to the benefits of the relevant Indenture or
a trust indenture which is identical to the relevant Indenture (other than such
changes to the relevant Indenture or any such identical trust indenture as are
necessary to comply with any requirements of the SEC to effect or maintain the
qualification thereof under the TIA and which, in either case, has been
qualified under the TIA), except that the Exchange Securities shall have been
registered pursuant to an effective Registration Statement in compliance with
the Securities Act. The Exchange Offer will be registered pursuant to the
Securities Act on an appropriate form (the "Exchange Offer Registration
Statement") and will comply with all applicable tender offer rules and
regulations promulgated pursuant to the Exchange Act and shall be duly
registered or qualified pursuant to all applicable state securities or Blue Sky
laws. No securities shall be included in the Registration Statement covering the
Exchange Offer other than the Exchange Securities. The Issuers agree to use
their best efforts to (x) cause the Exchange Offer Registration Statement to
become effective pursuant to the Securities Act on or before the Effectiveness
Target Date; (y) keep the Exchange Offer open for not less than 20 business days
(or such longer period required by applicable law) after the commencement of the
Exchange Offer; and (z) consummate the Exchange Offer within 45 days after the
earlier of the effectiveness thereof or the Effectiveness Target Date. Each
Holder who participates in the Exchange Offer will be required to represent that
(i) any Exchange Securities received by it will be acquired in the ordinary
course of its business, (ii) at the time of the consummation of the Exchange
offer such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Exchange Securities, and (iii) such
Holder is not an affiliate of the Issuers within the meaning of Rule 405 of the
Securities Act (or that if it is such an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable). Each Holder that is not a Participating Broker-Dealer will
be required to represent that it is not engaged in, and does not intend to
engage in, the distribution of the Exchange Securities. Each Holder that
4
<PAGE> 5
(i) is a Participating Broker-Dealer and (ii) will receive Exchange Notes for
its own account in exchange for the Transfer Restricted Securities that it
acquired as the result of market making or other trading activities will be
required to acknowledge that it will deliver a Prospectus as required by law in
connection with any resale of such Exchange Securities. Upon consummation of the
Exchange offer in accordance with this Agreement, the Issuers shall have no
further obligation to register Transfer Restricted Securities pursuant to
Section 2(c) and Section 3 of this Agreement.
2. The Issuers shall include within the Prospectus contained in the
Exchange offer Registration Statement a section entitled "Plan of Distribution,"
acceptable to the Initial Purchasers, which shall contain a summary statement of
the positions taken or policies made by the Staff of the SEC with respect to the
potential "underwriter" status of any broker-dealer that is the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act) of Exchange Securities
received by such broker-dealer in the Exchange Offer (a "Participating
Broker-Dealer"). Such "Plan of Distribution" section shall also allow the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Securities Act, including all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may resell
the Exchange Securities.
The Issuers shall use their best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act, for a period of at least 270 days after consummation of the Exchange offer
(or such longer period if extended pursuant to the last paragraph of Section 5)
(the "Applicable Period").
In connection with the Exchange Offer, the Issuers shall:
(x) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related
documents;
(y) utilize the services of a depositary for the Exchange Offer
with an address in the City of New York; and
(z) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last business
day on which the Exchange Offer shall remain open.
5
<PAGE> 6
As soon as practicable after the close of the Exchange Offer, the
Issuers shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Exchange offer;
(ii) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly to
each Holder of Securities, Exchange Securities equal in principal
amount to the Securities of such Holder so accepted for exchange.
(c) If (1) prior to the consummation of the Exchange Offer, applicable
interpretations of the staff of the SEC do not permit the Issuers to effect the
Exchange Offer as contemplated herein, or (2) the Exchange Offer is not
consummated within 180 days of the Closing Date for any reason, then the Issuers
shall promptly deliver to the Holders and the Trustee written notice thereof
(the "Shelf Notice") and the Issuers shall file a Registration Statement
pursuant to Section 3. Following the delivery of a Shelf Notice to the Holders
of Transfer Restricted Securities, the Issuers shall not have any further
obligation to conduct the Exchange Offer pursuant to this Section 2, provided
that the Issuers shall have the right, nonetheless, to proceed to consummate the
Exchange Offer notwithstanding their obligations pursuant to this Section 2(c)
(and, upon such consummation, their obligation to consummate a Shelf
Registration pursuant to clause (2) above shall terminate).
3. Shelf Registration
If the Issuers are required to deliver a Shelf Notice as contemplated
by Section 2(c), then
1. Shelf Registration. The Issuers shall prepare and file with the
SEC, as promptly as practicable following the delivery of the Shelf Notice, a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Transfer Restricted Securities (the "Shelf
Registration"). The Shelf Registration shall be on an appropriate form which
permits registration of such Transfer Restricted Securities for resale by the
Holders in the manner or manners reasonably designated by them (including,
without limitation, one or more underwritten offerings). The Issuers shall not
permit any securities other than the Transfer Restricted Securities to be
included in the Shelf Registration. The Issuers shall use their best efforts, as
described in Section 5(b), to cause the Shelf Registration to be declared
effective pursuant to the Securities Act as promptly as practicable following
the filing thereof and to keep the Shelf Registration continuously effective
under the Securities Act until the earlier of (i) the date which is 24 months
after the Closing Date, (ii) the date that all Transfer Restricted
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<PAGE> 7
Securities covered by the Shelf Registration have been sold in the manner set
forth and as contemplated in the Shelf Registration or (iii) there ceases to be
outstanding any Transfer Restricted Securities (the "Effectiveness Period").
2. Supplements and Amendments. The Issuers shall use their best
efforts to keep the Shelf Registration continuously effective by supplementing
and amending the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities covered by such Registration Statement and by any
underwriter of such Transfer Restricted Securities.
4. Liquidated Damages
1. The Issuers and the Initial Purchasers agree that the Holders of
Transfer Restricted Securities will suffer damages if the Issuers fail to
fulfill their obligations pursuant to Section 2 or Section 3 hereof and that it
would not be possible to ascertain the extent of such damages. Accordingly, in
the event of such failure by the Issuer to fulfill such obligations, the Issuers
hereby agree to pay liquidated damages ("Liquidated Damages") to each Holder of
Transfer Restricted Securities under the circumstances and to the extent set
forth below:
(i) if neither the Exchange Offer Registration Statement nor the Shelf
Registration has been filed with the SEC on or before the Filing Date; or
(ii) if neither the Exchange Offer Registration Statement nor the
Shelf Registration is declared effective by the SEC on or prior to the
Effectiveness Target Date; or
(iii) if (A) an Exchange Offer Registration Statement is declared
effective by the SEC, and (B) the Issuers have not exchanged Exchange
Securities for all Securities validly tendered in accordance with the terms
of the Exchange Offer on or prior to 45 days following the earlier of (i)
the effectiveness thereof or (ii) the Effectiveness Target Date; or
(iv) the Shelf Registration has been declared effective by the SEC and
such Shelf Registration ceases to be effective or usable at any time during
the Effectiveness Period, without being succeeded on the same day
immediately by a post-effective amendment to such Registration Statement
that cures such failure and that is itself immediately declared effective
on the same day;
7
<PAGE> 8
(any of the foregoing, a "Registration Default") then the Issuers
shall pay to each Holder of Transfer Restricted Securities Liquidated Damages in
an amount equal to 0.5% per annum of the principal amount of Transfer Restricted
Securities held by such Holder during the first 90-day period immediately
following the occurrence of such Registration Default. The amount of such
Liquidated Damages will increase by an additional 0.5% per annum of the
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period, until all Registration Defaults have been cured;
provided, however, that Liquidated Damages shall not at any time exceed 2.0% per
annum of the principal amount of Transfer Restricted Securities. Following the
cure of all Registration Defaults relating to any Transfer Restricted
Securities, the accrual of Liquidated Damages with respect to such Transfer
Restricted Securities will cease. A Registration Default under clause (i) above
shall be cured on the date that either the Exchange offer Registration Statement
or the Shelf Registration is filed with the SEC; a Registration Default under
clause (ii) above shall be cured on the date that either the Exchange offer
Registration Statement or the Shelf Registration is declared effective by the
SEC; a Registration Default under clause (iii) above shall be cured on the
earlier of the date (A) the Exchange Offer is consummated or (B) a Shelf
Registration Statement is declared effective; and a Registration Default under
clause (iv) above shall be cured on the earlier of (A) the date that the
post-effective amendment curing the deficiency in the Shelf Registration is
declared effective or (B) the Effectiveness Period expires.
2. The Issuers shall notify the Trustee within one business day after
each and every date on which a Registration Default occurs (an "Event Date").
Liquidated Damages shall be paid by the Issuers to the Holders by wire transfer
of immediately available funds to the accounts specified by them or by mailing
checks to their registered addresses if no such accounts have been specified on
or before the semiannual interest payment date provided in the relevant
Indenture. Each obligation to pay Liquidated Damages shall be deemed to commence
accruing on the applicable Event Date and to cease accruing when all
Registration Defaults have been cured. In no event shall the Issuers pay
Liquidated Damages in excess of the maximum applicable amount set forth above,
regardless of whether one or multiple Registration Defaults exist.
5. Registration Procedures
In connection with the registration of any Exchange Securities or
Transfer Restricted Securities pursuant to Sections 2 or 3 hereof, the Issuers
shall effect such registration to permit the sale of such Exchange Securities or
Transfer Restricted Securities (as applicable) in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Issuers
shall:
1. Prepare and file with the SEC, a Registration Statement or
Registration Statements as prescribed by Section 2 or 3, and to use their best
efforts to cause such Registration
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<PAGE> 9
Statement(s) to become effective and remain effective as provided herein;
provided that, if (1) such filing is pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities during the Applicable
Period, before filing any Registration Statement or Prospectus or any amendments
or supplements thereto, the Issuers shall, if requested, furnish to and afford
the Holders a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein and
all exhibits thereto) proposed to be filed (at least 3 business days prior to
such filing, or such later date as is reasonable under the circumstances) and
shall use their best efforts to reflect in each such document, when so filed
with the SEC, such comments as you may reasonably and timely propose.
2. Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Offer Registration Statement,
as the case may be, as may be necessary to keep such Registration Statement
continuously effective for the periods required by Section 2 or Section 3, as
applicable; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder with respect to the disposition of
all securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale of any
securities being sold by a Participating Broker-Dealer covered by any such
Prospectus; the Issuers shall be deemed not to have used their best efforts to
keep a Registration Statement effective during the Applicable Period if they
voluntarily take any action that would result in selling Holders of the Transfer
Restricted Securities covered thereby or Participating Broker-Dealers seeking to
sell Exchange Securities not being able to sell such Transfer Restricted
Securities or such Exchange Securities during that period, unless (i) such
action is required by applicable law, or (ii) such action is taken by them in
good faith and for valid business reasons (not including avoidance of their
obligations hereunder), including the acquisition or divestiture of assets.
3. If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, notify the selling Holders of Transfer Restricted Securities,
or each such Participating Broker-Dealer known to the Issuers, as the case may
be, their counsel and the managing underwriters, if any, promptly and confirm
such notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when
9
<PAGE> 10
the same has become effective (including in such notice a written statement that
any Holder may, upon request, obtain, without charge, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the initiation
of any proceedings for that purpose, (iii) if at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of the
Transfer Restricted Securities the representations and warranties of the Issuers
contained in any agreement (including any underwriting agreement) contemplated
by Section 5(l) below cease to be true and correct, (iv) of the receipt by the
Issuers of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Transfer Restricted Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation of any proceeding for such purpose, (v) of the happening of any event
or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(vi) of the Issuers, reasonable determination that a post-effective amendment to
a Registration Statement would be appropriate.
4. If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Transfer Restricted Securities
or the Exchange Securities (as applicable) to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued,
to use their reasonable best efforts to obtain the withdrawal of any such order
at the earliest possible moment.
5. If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriters, if any, and the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold in
connection with an underwritten offering, (i)
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<PAGE> 11
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, or such Holders or counsel
reasonably request to be included therein, (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
practicable after the Issuers have received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to such Registration Statement with such
information as the managing underwriter, if any, and such Holders and counsel
reasonably request to be included therein.
6. If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, furnish to each selling Holder of Transfer Restricted
Securities and to each such Participating Broker-Dealer who so requests, as the
case may be, their counsel and each managing underwriter, if any, without
charge, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.
7. If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, deliver to each selling Holder of Transfer Restricted
Securities pursuant to a Shelf Registration, or each such Participating
Broker-Dealer, as the case may be, their counsel, and the underwriters, if any,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Issuers
hereby consent to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Transfer Restricted Securities or each
such Participating Broker-Dealer, as the case may be, and the underwriters or
agents, if any, and dealers (if any), in connection with the offering and sale
of the Transfer Restricted Securities covered by or the sale by Participating
Broker-Dealers of the Exchange Securities pursuant to such Prospectus and any
amendment or supplement thereto.
8. If a Shelf Registration is filed pursuant to Section 3, cooperate
with the selling Holders of Transfer Restricted Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a
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<PAGE> 12
form eligible for deposit with The Depository Trust Company, and enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the managing underwriters, if any, or Holders may reasonably
request.
9. If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) above, as promptly as practicable prepare and (subject to
Section 5(a) above) file with the SEC, at the expense of the Issuers, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Transfer Restricted
Securities being sold thereunder or to the purchasers of the Exchange Securities
to whom such Prospectus will be delivered by a Participating Broker-Dealer, any
such Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact, required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
10. Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, (i) provide the Trustee with
certificates for the Transfer Restricted Securities in a form eligible for
deposit with The Depository Trust Company and (ii) provide a CUSIP number for
the Transfer Restricted Securities.
11. In connection with an underwritten offering of Transfer Restricted
Securities pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing underwriters in order to
expedite or facilitate the registration or the disposition of such Transfer
Restricted Securities, and in such connection, (i) make such representations and
warranties to the underwriters, with respect to the business of the Issuers and
their subsidiaries and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Issuers and updates thereof in form and substance reasonably
satisfactory to the managing underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by underwriters;
(iii) obtain "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the independent
certified public accountants of the Issuers (and, if necessary, any other
independent certified public accountants of any subsidiary of the Issuers or of
any business acquired by them
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<PAGE> 13
for which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings and such other matters as are reasonably requested by underwriters as
permitted by Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to Holders of a majority in aggregate
principal amount of Transfer Restricted Securities covered by such Registration
Statement and the managing underwriters or agents) with respect to all parties
to be indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
12. If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, (i) make available, on a confidential basis and subject to
the last sentence of this paragraph, for inspection by any selling Holder of
such Transfer Restricted Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Transfer Restricted Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each such
Participating Broker-Dealer, as the case may be, or underwriter (collectively,
the "Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate documents
and properties of the Issuers and their subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and (ii) cause the officers,
directors and employees of the Issuers and their subsidiaries to supply all
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement. Information supplied pursuant to
clauses (i) and (ii) above is confidential and shall not be disclosed by the
Inspectors, unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or (iii) the information in such Records has
been made generally available to the public.
13. Provide an indenture trustee for the Transfer Restricted
Securities or the Exchange Securities, as the case may be, and cause the
Indenture to be qualified under the TIA not later than the effective date of the
Exchange Offer or the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the trustee
under any such indenture and the holders of the Transfer Restricted Securities,
to effect such
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<PAGE> 14
changes to such indenture as may be required for such indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use its best
efforts to cause such trustee to execute, all documents as may be required to
effect such changes, and all other forms and documents required to be filed with
the SEC to enable such indenture to be so qualified in a timely manner.
14. Comply with all applicable rules and regulations of the SEC and,
as soon as reasonably practicable, make generally available to its security
holders consolidated earnings statements (which need not be audited) of the
Issuers that satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder.
15. If an Exchange offer is to be consummated, upon delivery of the
Transfer Restricted Securities by Holders to the Issuers (or to such other
Person as directed by the Issuers) in exchange for the Exchange Securities, the
Issuers shall mark, or cause to be marked, on such Transfer Restricted
Securities that such Transfer Restricted Securities are being canceled in
exchange for the Exchange Securities; in no event shall such Transfer Restricted
Securities be marked as paid or otherwise satisfied.
16. Cooperate with each seller of Transfer Restricted Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Transfer Restricted Securities and
their respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD").
17. Use their best efforts to take all other steps necessary to effect
the registration of the Transfer Restricted Securities or Exchange Securities,
as applicable, covered by a Registration Statement contemplated hereby.
The Issuers may require each seller of Transfer Restricted Securities
or Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuers such information regarding such seller or Participating
Broker-Dealer and the distribution of such Transfer Restricted Securities or
Exchange Securities to be sold by such Participating Broker-Dealer, as the case
may be, as the Issuers may, from time to time, reasonably request or is required
by the rules of the SEC. The Issuers may exclude from such registration the
Transfer Restricted Securities of any seller or Participating Broker-Dealer who
fails to furnish such information within a reasonable time after receiving such
request and such excluded seller or Participating Brokers shall not be entitled
to Liquidated Damages hereunder.
Each Holder of Transfer Restricted Securities and each Participating
Broker-Dealer agrees by acquisition of such Transfer Restricted Securities or
Exchange Securities to be sold by such Participating Broker-Dealer, as the case
may be, that, upon receipt of any notice from the Issuers of the happening of
any event of the kind described in Section
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<PAGE> 15
5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi), such Holder will forthwith discontinue
disposition of such Transfer Restricted Securities covered by such Registration
Statement or Prospectus or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 5(j), or until it
is advised in writing (the "Advice") by the Issuers that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event the Issuers give any notice of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v) or 5(c)(vi), the time period for the effectiveness of such Registration
Statement set forth in Section 2 or Section 3 hereof, as applicable, shall be
extended by the number of days from the date of such notice to the date when
each selling Holder covered by such Registration Statement shall have received
copies of the supplemental or amended Prospectus contemplated by Section 5(j) or
shall have received the Advice that the use of the applicable Prospectus may be
resumed.
6. Registration Expenses
1. All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuers shall be borne by the Issuers, whether or not
the Exchange offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and expenses
of compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Transfer Restricted Securities or Exchange Securities
(x) where the Holders of Transfer Restricted Securities are located, in the case
of the Exchange Securities, or (y) as provided in Section 5(h), in the case of
Transfer Restricted Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Transfer Restricted Securities or Exchange Securities in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses if the
printing of prospectuses is requested by the managing underwriters, if any, or,
in respect of Transfer Restricted Securities or Exchange Securities to be sold
by any Participating Broker-Dealer during the Applicable Period, by the Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities included in any Registration Statement or of such Exchange
Securities, as the case may be), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Issuers, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(l)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) rating agency fees, (vii) Securities Act liability insurance, if the
Issuers desire such insurance, (viii) fees and expenses of all other Persons
retained by the Issuers, (ix) internal expenses of the Issuers (including,
without limitation, all salaries and expenses of officers and
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<PAGE> 16
employees of the Issuers performing legal or accounting duties), (x) the expense
of any annual audit, (xi) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange and (xii)
the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales agreements,
and indentures. Nothing contained in this Section 6 shall create an obligation
on the part of the Issuers to pay or reimburse any Holder for any underwriting
commission or discount attributable to any such Holder's Transfer Restricted
Securities included in an underwritten offering pursuant to a Registration
Statement filed in accordance with the terms of this Agreement, or to guarantee
such Holder any profit or proceeds from the sale of such Securities.
2. In connection with any Shelf Registration hereunder, the Issuers
shall reimburse the Holders of the Transfer Restricted Securities being
registered in such registration for the reasonable fees and disbursements of not
more than one counsel (in addition to one local counsel in each relevant
jurisdiction) chosen by the Holders of a majority in aggregate principal amount
of the Transfer Restricted Securities to be included in such Registration
Statement and other reasonable out-of-pocket expenses of the Holders of Transfer
Restricted Securities reasonably incurred in connection with the registration of
the Transfer Restricted Securities.
7. Indemnification
Each Issuer agrees, jointly and severally, to indemnify and hold
harmless (i) the Initial Purchasers, each Holder of Transfer Restricted
Securities, each Holder of Exchange Securities, each Participating
Broker-Dealer, (ii) each person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) any such
Person (any of the persons referred to in this clause (ii) being hereinafter
referred to as a "controlling person"), and (iii) the respective officers,
directors, partners, employees, representatives and agents of any of such Person
or any controlling person (any person referred to in clause (i), (ii) or (iii)
may hereinafter be referred to as an "Indemnified Person") to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including, without limitation, and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Person) directly or indirectly
caused by, related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the Issuers
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by (i) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and
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<PAGE> 17
in conformity with information furnished to the Issuers or any underwriter in
writing by such Indemnified Person for use therein, or (ii) any untrue statement
contained in or omission from a preliminary prospectus if a copy of the
Prospectus (as then amended or supplemented, if the Issuers shall have furnished
to or on behalf of the Holder participating in the distribution relating to the
relevant Registration Statement any amendments or supplements thereto) was not
sent or given by or on behalf of such Holder to the person asserting any such
losses, liabilities, claims, damages or expenses who purchased Securities, if
such is required by law at or prior to the written confirmation of the sale of
such Securities to such person and the untrue statement contained in or omission
from such preliminary prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented). The Issuers shall notify the Trustee
promptly of the institution, threat or assertion of any claim, proceeding
(including any governmental investigation) or litigation of which it or they
shall have become aware in connection with the matters addressed by this
Agreement.
In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Issuers and their directors and officers and each person who
controls the Issuers within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Indemnified Person, but only with reference to
information furnished to the Issuers in writing by such Indemnified Person for
use in any Registration Statement or Prospectus, any amendment or supplement
thereto, or any preliminary prospectus. The liability of any Indemnified Person
pursuant to this paragraph shall in no event exceed the net proceeds received by
such Indemnified Person from sales of Transfer Restricted Securities giving rise
to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
person") in writing, and the indemnifying person shall have the right to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying person
may reasonably designate in such proceeding and shall pay the reasonable fees
and expenses actually incurred by such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party, unless (i) the indemnifying person and the
indemnified party shall have mutually agreed in writing to the contrary, (ii)
the indemnifying person failed to assume the defense within a reasonable time
after the commencement of the action and employ
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<PAGE> 18
counsel reasonably satisfactory to the indemnified party or (iii) the named
parties to any such action (including any impleaded parties) include both such
indemnified party and the indemnifying person, or any affiliate of the
indemnifying person and such indemnified party shall have been reasonably
advised by counsel in writing that either (x) there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying person or such affiliate of the indemnifying
person or (y) a conflict may exist between such indemnified party and the
indemnifying person or such affiliate of the indemnifying person (in which case
the indemnifying person shall not have the right to assume the defense of such
action on behalf of such indemnified party, it being understood, however, that
the indemnifying person shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all such indemnified parties, which firm shall be
designated in writing by indemnified parties who sold a majority in aggregate
principal amount of Transfer Restricted Securities sold by all such indemnified
parties and any such separate firm for the Issuers, their directors, their
officers and such control persons of the Issuers shall be designated in writing
by the Issuers. The indemnifying person shall not be liable for any settlement
of any proceeding effected without its written consent, which consent shall not
be unreasonably withheld, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying person agrees to indemnify
any indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying person shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding and does not include a statement as to, or an admission of
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable (other than by reason of the exceptions or
provisions therein) to, or is insufficient to hold harmless, an indemnified
party in respect of any losses, claims, damages, liabilities, or expenses
referred to therein (other than by reason of the exceptions provided therein),
then each indemnifying person under such paragraphs, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities, or expenses (i) in such proportion as is appropriate to reflect the
relative benefits of the indemnified party on the one hand and the indemnifying
person(s) on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities, or expenses or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
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<PAGE> 19
indemnifying person(s) and the indemnified party, as well as any other relevant
equitable considerations. The relative fault of the indemnifying person(s), on
the one hand, and any indemnified parties, on the other, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying person(s), on the one hand,
or by such indemnified parties, on the other, and the parties, relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if such indemnified parties were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
indemnified party be required to contribute any amount in excess of the amount
by which proceeds received by such indemnified party from sales of Transfer
Restricted Securities exceeds the amount of any damages that such indemnified
party has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7
will be in addition to any liability which the indemnifying persons may
otherwise have to the indemnified parties referred to above. The indemnified
parties, obligations to contribute pursuant to Section 7 are several in
proportion to the respective principal amount of Securities sold by each of the
indemnified parties hereunder and not joint.
8. Rules 144 and 144A
The Issuers covenant that they will file the reports required to be
filed by them pursuant to the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner and, if at any
time the Issuers are not required to file such reports, they will, upon the
request of any Holder of Transfer Restricted Securities, make available
information required by Rules 144 and 144A under the Securities Act in order to
permit sales pursuant to Rule 144 and Rule 144A.
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9. Underwritten Registrations
1. If any of the Transfer Restricted Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Securities included in such offering and reasonably
acceptable to the Issuers.
No Holder of Transfer Restricted Securities may participate in any
underwritten registration hereunder, unless such Holder (i) agrees to sell such
Holder's Transfer Restricted Securities on the basis provided in any customary
underwriting arrangements entered into in connection therewith and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
2. Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering or placement agent in a private-offering of the, Company's
debt securities, not to effect any private sale or distribution (including a
sale pursuant to Rule 144(k) and Rule 144A, but excluding non-public sales to
any of its affiliates, officers, directors, employees and controlling persons)
of any of the Securities except pursuant to an Exchange Offer, during the period
beginning 10 days prior to, and ending 90 days after, the closing date of the
underwritten offering.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement.
The Issuers agree, without the written consent of the managing
underwriters in an underwritten offering of Transfer Restricted Securities
covered by a Registration Statement filed pursuant to Section 3 hereof, not to
effect any public or private sale or distribution of their respective debt
securities, including a sale pursuant to Regulation D or Rule 144A under the
Securities Act, during the period beginning 10 days prior to, and ending 90 days
after, the closing date of each underwritten offering made pursuant to such
Registration Statement; provided, however, that such period shall be extended by
the number of days from and including the date of the giving of any notice
pursuant to Section 5(c)(v) or S(c)(vi) hereof to and including the date when
each seller of Transfer Restricted Securities covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 5(j) hereof and provided further, that no
such offering restriction shall apply to more than one such underwritten
offering per twelve-month period.
10. Miscellaneous
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<PAGE> 21
1. Remedies. In the event of a breach by the Issuers of any of their
obligations under this Agreement, each Holder of Transfer Restricted Securities,
in addition to being entitled to exercise all rights provided herein, in the
Indenture or, in the case of the Initial Purchasers, in the Purchase Agreement,
or granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. Subject to Section 4, the
Issuers agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by them of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they shall waive the defense that a
remedy at law would be adequate.
2. No Inconsistent Agreements. None of the Issuers will enter into any
agreement with respect to any of their respective securities which will grant to
any Person piggy-back registration rights with respect to an Exchange Offer
Registration Statement or a Shelf Registration.
3. Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Issuers have obtained the written consent of holders of at
least a majority of the then outstanding aggregate principal amount of-Transfer
Restricted Securities and Exchange Securities held by Participating
Broker-Dealers holding Exchange Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter-that relates exclusively to the
rights of Holders and Participating Broker-Dealers holding Exchange Securities
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect, impair, limit or compromise the rights
of other Holders and Participating Broker-Dealers holding Exchange Securities
may be given by holders of at least majority in aggregate principal amount of
the Transfer Restricted Securities and Exchange Securities held by Participating
Broker-Dealers being sold by such holders pursuant to such Registration
Statement; provided that the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.
4. Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
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(i) if to a Holder of Transfer Restricted Securities, at the most
current address given by the Trustee to the Issuers; and
(ii) if to the Issuers: James E. Butler, Venture Holdings Trust, 33662
James J. Pompo Drive, Fraser, Michigan 48026, (Tel: 810-294-1500) (Fax:
810-294-1960), with copies to Dykema Gossett PLLC, 400 Renaissance Center,
Detroit, Michigan 48234-1668, Attention Fredrick M. Miller, Esq. (Tel:
313-568-6800) (Fax: 313-568-6832) and Paul Lieberman, P.C., 1471 S.
Woodward Avenue, Suite 250, Bloomfield Hills, Michigan 48302 (Tel:
248-335-4000) (Fax: 248-335-4689).
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; ten business days after
being deposited in the mail, postage prepaid, if mailed; three business days
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
5. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities. The Issuers agree that the
holders of the Securities shall be third party beneficiaries to the agreements
made hereunder by the Issuers and each holder shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights hereunder.
6. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
7. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL 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.
22
<PAGE> 23
9. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
10. Entire Agreement. This Agreement, together with the
Purchase Agreement, is intended by the parties as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
11. Securities Held by the Issuers or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Issuers or any of their affiliates (as such term is defined in Rule 405 under
the Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
23
<PAGE> 24
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
VENTURE HOLDINGS TRUST
VEMCO INC.
VEMCO LEASING, INC.
VENTURE INDUSTRIES CORPORATION
VENTURE HOLDINGS CORPORATION INC.
VENTURE LEASING COMPANY
VENTURE MOLD & ENGINEERING
CORPORATION
VENTURE SERVICE COMPANY
EXPERIENCE MANAGEMENT LLC
VENTURE EUROPE, INC.
VENTURE EU CORPORATION
VENTURE HOLDINGS COMPANY LLC
By: /s/ JAMES E. BUTLER, JR.
---------------------------------
Name: James E. Butler, Jr.
Title: Chief Financial Officer
S-1
<PAGE> 25
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above written.
BANC ONE CAPITAL MARKETS, INC.
GOLDMAN SACHS & CO.
By: Banc One Capital Markets, Inc.
By: /s/ THOMAS GORDY
-----------------------------------
Name: Thomas Gordy
Title: Managing Director
S-2
<PAGE> 1
EXHIBIT 5.1
[DYKEMA GOSSETT LETTERHEAD]
July 9, 1999
Venture Holdings Company LLC
33662 James J. Pompo Drive
Fraser, Michigan 48026
Re: Registration Statement on Form S-4 in Connection With
the Exchange Offer of (i) 11% Senior Notes due 2007
for outstanding 11% Senior Notes due 2007 and (ii)
12% Senior Subordinated Notes due 2009 for
outstanding 12% Senior Subordinated Notes due 2009
Gentlemen:
We have acted as special counsel for Venture Holdings Company LLC
("Venture"), a Michigan limited liability company and successor to Venture
Holdings Trust under the Indentures (as defined herein), Vemco, Inc., Venture
Industries Corporation, Venture Mold & Engineering Corporation, Venture Leasing
Company, Vemco Leasing, Inc., Venture Holdings Corporation, Venture Service
Company, Venture Europe, Inc. and Venture EU Corporation, each a Michigan
corporation, and Experience Management LLC, a Michigan limited liability company
(each a "Guarantor" and, together with Venture, the "Issuers"), in connection
with the preparation and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), of a Registration
Statement on Form S-4 (the "Registration Statement") relating to the exchange
offer by the Issuers of (i) $125,000,000 aggregate principal amount of 11%
Senior Notes due 2007 (the "Senior Exchange Notes") for outstanding 11% Senior
Notes due 2007 (the "Senior Note Exchange") and (ii) $125,000,000 aggregate
principal amount of 12% Senior Subordinated Notes (the "Senior Subordinated
Exchange Notes" and, together with the Senior Exchange Notes, the "Exchange
Notes") for outstanding 12% Senior Subordinated Notes due 2009 (the "Senior
Subordinated Note Exchange" and, together with the Senior Note Exchange, the
"Exchange Offer"). The Exchange Notes are to be issued pursuant to Indentures,
each dated May 27, 1999 (the "Indentures"), between Venture Holdings Trust and
The Huntington National Bank, as trustee (the "Trustee").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such of the Issuers'
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
<PAGE> 2
Venture Holdings Company LLC
July 9, 1999
Page 2
Based upon the foregoing, we are of the opinion that:
The Exchange Notes, when executed and authenticated in
accordance with the terms of the Indentures, and upon issuance
in accordance with the terms of the Exchange Offer in the
prospectus constituting a part of the Registration Statement
(the "Prospectus"), will be valid and binding obligations of
the Issuers, enforceable against the Issuers in accordance
with their terms, except as (a) the enforceability thereof may
be limited by or subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, arrangement, moratorium, usury or
similar laws now or hereafter affecting creditors' rights
generally and (b) rights or remedies (including, without
limitation, acceleration, specific performance and injunctive
relief) may be limited by equitable principles of general
applicability (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness)
whether such principles are considered in a proceeding in
equity or at law, and may be subject to the discretion of the
court before which any proceedings therefor may be brought.
We hereby consent to the use of this opinion as Exhibit 5.1 of the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus. In giving such consent, we do not concede
that we are experts within the meaning of the Act or the rules or regulations
thereunder or that this consent is required by Section 7 of the Act.
Very truly yours,
DYKEMA GOSSETT PLLC
/s/ Dykema Gossett PLLC
<PAGE> 1
EXHIBIT 10.1
VENTURE HOLDINGS TRUST
CREDIT AGREEMENT
dated as of May 27, 1999
THE LENDERS PARTY HERETO,
THE FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent
THE BANK OF NOVA SCOTIA, as Syndication Agent
MORGAN STANLEY SENIOR FUNDING, INC., as Documentation Agent
Arranged by:
BANC ONE CAPITAL MARKETS, INC.
<PAGE> 2
EXHIBITS
EXHIBIT A BORROWING BASE CERTIFICATE
EXHIBIT B FOREIGN SUBSIDIARY OPINIONS
EXHIBIT C GUARANTY
EXHIBITS D-1 AND D-2 PLEDGE AGREEMENTS
EXHIBIT E REVOLVING CREDIT NOTE
EXHIBIT F SECURITY AGREEMENTS
EXHIBITS G-1, G-2 AND G-3 TERM NOTES
EXHIBIT H DOMESTIC LEGAL OPINIONS
EXHIBIT I TRANSFER AND FUNDING INSTRUCTIONS
EXHIBIT J COMPLIANCE CERTIFICATE
EXHIBIT K ASSIGNMENT AGREEMENT
EXHIBIT L NOTICE OF ASSIGNMENT
SCHEDULES
SCHEDULE 1.1-A PRICING GRID
SCHEDULE 1.1-B COMMITMENTS
SCHEDULE 1.1-C PEGUFORM RESTRUCTURING
SCHEDULE 5.6 TAXES
SCHEDULE 5.7 LITIGATION
SCHEDULE 5.8 SUBSIDIARIES
SCHEDULE 5.14 OWNERSHIP OF PROPERTIES EXCEPTIONS
SCHEDULE 5.26 INTELLECTUAL PROPERTY
SCHEDULE 5.30 1999 SENIOR UNSECURED AND
SUBORDINATED DEBT DOCUMENTS
SCHEDULE 5.32 FOREIGN SUBSIDIARY DIVIDEND RESTRICTIONS
SCHEDULE 6.11 PERMITTED INDEBTEDNESS
SCHEDULE 6.14 PERMITTED INVESTMENTS
SCHEDULE 6.15 PERMITTED LIENS
SCHEDULE 6.19 SUBSIDIARY DIVIDEND RESTRICTIONS
SCHEDULE 6.20 ADDITIONAL COVENANT EXCLUSION
SCHEDULE 6.24 NEGATIVE PLEDGE LIMITATIONS
2
<PAGE> 3
CREDIT AGREEMENT
This Agreement, dated as of May 27, 1999, is among Venture Holdings Trust,
a grantor trust organized under the laws of Michigan, the Lenders, The First
National Bank of Chicago, as Administrative Agent.
1. DEFINITIONS
a. As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any Person, or division thereof, whether through purchase of
assets, merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the Capital Stock of a Person.
"Additional Subordinated Debt" means additional senior subordinated notes
(in addition to the 1999 Subordinated Notes) in the face amount of at least
$125,000,000, issued pursuant to agreements and documents, and on terms and
provisions, reasonably satisfactory to the Administrative Agent.
"Administrative Agent" means The First National Bank of Chicago in its
capacity as Administrative Agent for the Lenders pursuant to Article X, and not
in its individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article X.
"Advance" means an advance hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Revolving Credit
Loans, Interim Term Loan, Term Loan A, Term Loan B, Swing Loans or Facility
Letters of Credit made on the same Borrowing Date (or date of conversion or
continuation) by the Lenders to the Borrower of the same Type and, in the case
of Eurodollar Advances and Eurocurrency Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Available Multicurrency Revolving Credit Commitments" means at
any date of determination with respect to all Multicurrency Revolving Credit
Lenders, an amount equal to the Available Multicurrency Revolving Credit
Commitments of all Multicurrency Revolving Credit Lenders on such date.
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<PAGE> 4
"Aggregate Available Revolving Credit Commitments" means as at any date of
determination with respect to all Lenders, an amount equal to the Available
Revolving Credit Commitments of all Lenders on such date.
"Aggregate Interim Term Loan Commitment" means the aggregate amount of
Interim Term Loan Commitments of all the Interim Term Loan Lenders, not to
exceed $125,000,000, as reduced from time to time pursuant to the terms hereof.
"Aggregate Interim Term Loan Outstandings" means at any date of
determination with respect to any Lender, the aggregate unpaid principal amount
of such Lender's Interim Term Loan on such date.
"Aggregate Multicurrency Revolving Credit Commitment" means the aggregate
amount, stated in Dollars, of the Multicurrency Revolving Credit Commitments of
all the Multicurrency Revolving Credit Lenders, not to exceed $75,000,000, or
such greater or lesser amount as determined by the Administrative Agent from
time to time, as reduced from time to time pursuant to the terms hereof.
"Aggregate Multicurrency Revolving Credit Outstandings" means on any date
of determination with respect to any Multicurrency Revolving Credit Lender, the
aggregate unpaid principal amount of such Lender's Multicurrency Revolving
Credit Loans on such date.
"Aggregate Revolving Credit Commitment" means the aggregate of the
Revolving Credit Commitments of all the Revolving Credit Lenders, not to exceed
the Dollar Equivalent of $200,000,000, as reduced from time to time pursuant to
the terms hereof.
"Aggregate Revolving Credit Outstandings" means as at any date of
determination with respect to any Revolving Credit Lender, the Dollar Equivalent
of the sum of the aggregate unpaid principal amount of such Lender's Revolving
Credit Loans on such date and the amount of such Lender's Pro Rata Share of the
Facility Letter of Credit Obligations and Swing Loans to the Borrower on such
date and without duplication the amount of such Lender's participation in other
Revolving Credit Loans pursuant to Section 2.25 on such date.
"Aggregate Term Loan A Commitment" means the aggregate amount of the Term
Loan A Commitment of all Term Loan A Lenders, not to exceed $100,000,000, as
reduced from time to time pursuant to the terms hereof.
"Aggregate Term Loan B Commitment" means the aggregate amount of Term Loan
B Commitments of all the Term Loan B Lenders, not to exceed $150,000,000, as
reduced from time to time pursuant to the terms hereof.
"Aggregate Term Loan A Outstandings" means at any date of determination
with respect to any Lender, the sum of the aggregate unpaid principal amount of
such Lender's Term Loan A on such date.
"Aggregate Term Loan B Outstandings" means as at any date of determination
with respect to any Lender, the aggregate unpaid principal amount of such
Lender's Term Loan B on such date.
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<PAGE> 5
"Aggregate Term Loan Outstandings" means as at any date of determination
with respect to any Lender, the sum of the Aggregate Term Loan A Outstandings,
the Aggregate Interim Term Loan Outstandings and Aggregate Term Loan B
Outstandings of such Lender.
"Aggregate Total Outstandings" means as at any date of determination with
respect to any Lender, the Dollar Equivalent of an amount equal to the sum of
(a) the Aggregate Revolving Credit Outstandings of such Lender on such date and
(b) the Aggregate Term Loan Outstandings of such Lender on such date.
"Agreed Currencies" means Dollars and Eurocurrencies.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Sections 5.4 and
subject to Section 9.9.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Margin" is defined on Schedule 1.1-A.
"Arranger" means Banc One Capital Markets, Inc.
"Asset Sale" means the sale, transfer or other disposition by the Borrower
or any Subsidiary of any asset of any kind to any Person.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means the Principal and, subject to the revocation by
either the Principal or the Board of Directors, Michael G. Torakis or James E.
Butler, or any other person designated in writing by the Board of Directors, the
Principal or Michael G. Torakis, or, with respect to any Borrowing Notice or
Conversion/Continuation Notice, the controller or assistant controller of the
Borrower, in each case acting singly.
"Available Multicurrency Revolving Credit Commitment" means at any date of
determination with respect to any Multicurrency Revolving Credit Lender (after
giving effect to the making and payment of any Revolving Credit Loans required
on such date pursuant to Section 2.6(b)), the lesser of (a) the excess, if any,
of (i) the Dollar Equivalent of such Multicurrency Revolving Credit Lender's
Multicurrency Revolving Credit Commitment in effect on such date over (ii) the
Aggregate Multicurrency Revolving Credit Outstandings of such Multicurrency
Credit Lender on such date and (b) the Available Revolving Credit Commitment of
such Lender on such date.
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<PAGE> 6
"Available Revolving Credit Commitment" means at any date of determination
with respect to any Revolving Credit Lender (after giving effect to the making
and payment of any Revolving Credit Loans required on such date pursuant to
Section 2.6(b)), an amount in Dollars equal to the excess, of (a) the amount of
such Lender's Revolving Credit Commitment in effect on such date over (b) the
Aggregate Revolving Credit Outstandings of such Lender on such date.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership or any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Beneficiary" means (i) any beneficiary of the Borrower while it is a trust
or (ii) any shareholder or member, as the case may be, of a successor
corporation or limited liability company to the Borrower after a Trust
Contribution.
"Board of Directors" means:
(1) either the board of directors, general partners or manager(s) of
the Borrower's Subsidiaries or any duly authorized committee of such board; or
(2) in the case of the Borrower, the Principal; provided that (a) in
the event the Principal's rights, duties and powers are assumed by the Successor
Special Advisor Group, "Board of Directors" means the Successor Special Advisor
Group and (b) in the event the Borrower is reorganized as a corporation or
limited liability company or a Trust Contribution shall occur, "Board of
Directors" means the board of directors or manager(s) of the successor
corporation or limited liability company.
"Borrower" means (i) Venture Holdings Trust, a grantor trust organized
under the laws of Michigan or (ii) any successor Person to the Borrower in
accordance with the provisions of Section 6.12.
"Borrowing Base" means, as of any date, the sum of (a) an amount equal to
70% of the amount of Eligible Accounts Receivable, plus (b) an amount equal to
40% of the amount of Eligible Inventory.
"Borrowing Base Certificate" for any date means an appropriately completed
report as of such date and substantially in the form of Exhibit A hereto,
certified as true and correct as of such date by an Authorized Officer of the
Borrower.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.10.
"British Pound Sterling" or "(pound)" means the lawful currency of the
United Kingdom.
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<PAGE> 7
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Detroit, Chicago and New York for the conduct
of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
(ii) with respect to any borrowing, payment or rate selection of Eurocurrency
Advances, a day (other than a Saturday or Sunday) on which banks generally are
open in Detroit, Chicago and New York for the conduct of substantially all of
their commercial lending activities and on which dealings in Dollars and
Eurocurrencies are carried on in the London interbank market (and, if the
Eurocurrency Advances which are the subject of such borrowing, payment or rate
selection are denominated in Euros, a day upon which such clearing or settlement
of the Euro is open for business), and (iii) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in Detroit,
Chicago and New York for the conduct of substantially all of their commercial
lending activities.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.
"Capital Stock" means (i) in the case of any corporation, all capital stock
and any securities exchangeable for or convertible into capital stock and any
warrants, rights or other options to purchase or otherwise acquire capital stock
or such securities or any other form of equity securities, (ii) in the case of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distribution of assets of, the issuing
Person, including without limitation trust beneficiary interests, but excluding
commissions and incentive compensation plans in the ordinary course of business.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalents" means:
(1) cash;
(2) securities issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof);
(3) time deposits and certificates of deposit and commercial paper issued
by the parent
7
<PAGE> 8
corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000;
(4) commercial paper issued by others rated at least A-1 or the equivalent
thereof by Standard & Poor's Corporation or at least P-1 or the equivalent
thereof by Moody's Investors Service, Inc;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered into
with any bank meeting the qualifications specified in clause (3) above;
(6) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $250,000,000;
(7) investments in money market funds which invest substantially all their
assets in securities of the type described in clauses (1), (2) (3) and (4) above
and in the case of (1), (2) and (3) maturing within one year after the date of
acquisition.
"Change in Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one transaction
or a series of related transactions, of all or substantially all of the
properties or assets of the Borrower and its Subsidiaries, taken as a whole, to
any "person" (as that term is used in Section 13(d)(3) of the Exchange Act)
other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of the Borrower;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principal and his Related Parties,
becomes the Beneficial Owner, directly or indirectly, or more than 40% of the
Capital Stock of the Borrower or the total voting power in the aggregate
normally entitled to vote in the election of directors, managers, or trustees,
as applicable, of the transferee(s) or surviving entity or entities, measured by
voting power rather than number of shares, but only if the Principal and his
Related Parties are the Beneficial Owners, directly or indirectly, of less than
a majority of the total voting power in the aggregate normally entitled to vote
in the election of directors, managers, or trustees, as applicable, of the
Borrower or the transferee(s) or surviving entity or entities, measured by
voting power rather than number of shares; or
(4) during any 12 consecutive months after the Effective Date,
individuals who at the beginning of any such 12 month period constituted the
Board of Directors of the Borrower (together with any new directors or managers
whose election by such Board or whose nomination for election by the equity
holders of the Borrower, (A) with respect to Venture Holdings Trust was made
pursuant to the terms of the Venture Trust Instrument and (B) with respect to
Venture Holding Corporation or another successor to the Borrower, or their
respective successors, after the occurrence of a Trust Contribution, (x)
8
<PAGE> 9
was approved by the Beneficiary of Venture Holdings Trust on or before the date
of the Trust Contribution, or (y) was approved by a majority of the Board of
Directors of the Borrower whose appointment, election or nomination to the Board
of Directors was approved in accordance with the preceding clause (x) or by this
clause (y)) cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office.
(5) the occurrence of any "Change of Control", "Change in Control" or
similar term or event under the 1997 Senior Unsecured Debt Document, the 1999
Senior Unsecured Debt Documents or the 1999 Senior Subordinated Debt Documents.
Notwithstanding anything in this definition to the contrary, a "Change in
Control" shall not be deemed to have occurred solely as a result of a
transaction pursuant to which the Borrower is reorganized or reconstituted as a
corporation or limited liability company or a Trust Contribution occurs in
accordance with the provisions described herein and no event which is otherwise
a "Change in Control" shall have occurred.
"Change in Control Notice" is defined in Section 2.23.1.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means all Property of the Borrower and of the Guarantors.
"Collateral Documents" means, collectively, the Security Agreements, the
Mortgages, the Pledge Agreements and all other agreements granting a Lien in
favor of the Administrative Agent for the benefit of the Lenders, as any of the
foregoing may be amended or modified from time to time.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Condemnation" is defined in Section 7.8.
"Consolidated" or "consolidated" means, when used with reference to any
financial term in this Agreement, the aggregate for two or more persons of the
amounts signified by such term for all such persons determined on a consolidated
basis in accordance with Agreement Accounting Principles.
"Consolidated Current Assets" means the consolidated current assets of the
Borrower and its Subsidiaries determined in accordance with Agreement Accounting
Principles.
"Consolidated Current Liabilities" means the consolidated current
liabilities of the Borrower and its Subsidiaries determined in accordance with
Agreement Accounting Principles.
"Consolidated Interest Expense" means, for any period, total net interest
and related expense owed to Persons other than the Borrower and its Wholly Owned
Subsidiaries (including, without limitation or duplication, that portion of any
Capitalized Lease Obligation attributable to interest expense in conformity with
Agreement Accounting Principles, amortization of debt discount, all capitalized
9
<PAGE> 10
interest, the interest portion of any deferred payment obligations, all
commissions, discounts and other fees and charges owed with respect to letter of
credit and bankers acceptance financing, the net costs and net payments under
any interest rate hedging, cap or similar agreement or arrangement, agency fees
and capitalized transaction costs allocated to interest expense) paid, payable
or accrued during such period, without duplication for any other period or
otherwise, with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, all as determined for the Borrower and its Subsidiaries on a
consolidated basis for such period in accordance with Agreement Accounting
Principles.
"Consolidated Net Income" means, for any period, the net income (or loss)
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period, determined in accordance with Agreement
Accounting Principles; provided that in determining Consolidated Net Income
there shall be excluded, without duplication: (a) the income of any Person
(other than a Subsidiary of the Borrower) in which any Person other than the
Borrower or any of its Subsidiaries has a joint interest or partnership
interest, except to the extent of the amount of dividends or other distributions
actually paid in cash to the Borrower or any of its Subsidiaries by such Person
during such period, and all such cash dividends and distributions shall be
included in Consolidated Net Income for the period in which such dividends or
other distributions were actually paid, (b) the income of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries or that Person's
assets are acquired by the Borrower or any of its Subsidiaries, (c) gains and
losses from the sale, exchange, transfer or other disposition of property or
assets not in the ordinary course of business of the Borrower and its
Subsidiaries, and related tax effects in accordance with Agreement Accounting
Principles, (d) any extraordinary or non-recurring gains and losses, and related
tax effects in accordance with Agreement Accounting Principles, (e) any other
income not from the continuing operations of the Borrower or its Subsidiaries,
and related tax effects in accordance with Agreement Accounting Principles, (f)
the income of any Subsidiary of the Borrower that is not a Guarantor to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the date of determination permitted by
operation of the terms of its charter or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary, or its owners; provided, that if such declaration or payment is not
permitted at such date, such income shall nevertheless be included to the extent
of the amount of dividends or other distributions are actually paid in cash,
directly or indirectly, to the Borrower during such period if such declaration
and payment were made during the applicable period without the prior required
approval of any Person or governmental authority and were not made in violation
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental resolution applicable to that Restricted subsidiary or its
stockholders, (g) any non-cash items added to income, excluding any such
non-cash items to the extent it represents the reversal of an accrual or reserve
for potential cash items in any prior period, and (h) Permitted Tax
Distributions to the extent not already deducted.
"Consolidated Net Worth" means the aggregate amount of trust equity (i.e.,
consolidated trust principal) and common shareholders' or members' equity, as
applicable, as determined from a consolidated balance sheet of the Borrower and
its Subsidiaries, prepared in accordance with Agreement Accounting Principles.
"Contingent Obligation" of a Person means, without duplication, any
agreement, undertaking or
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<PAGE> 11
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or takeorpay contract, but excluding the endorsement of instruments
for deposit or collection in the ordinary course of business.
"Conversion/Continuation Notice" is defined in Section 2.11.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414(b) of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time or, when used in
connection with any Advance denominated in any Eurocurrency, means the
correlative floating rate of interest customarily applicable to similar
extensions of credit to corporate borrowers denominated in such currency, as
determined by the Administrative Agent, changing when and as said corporate base
rate or correlative rate changes.
"Cost Rate" means
1. The cost of compliance with existing requirements of the Bank of England
Act 1998 (the "Act") and/or Bank of England and/or the Financial Services
Authority (or any authority which replaces all or any of their functions)
of a requirement to place non-interest-bearing or Special Deposits (whether
interest bearing or not) with the Bank of England and/or pay fees to the
Financial Services Authority in respect of liabilities used to fund
Advances denominated in British Pounds Sterling will be calculated by the
Administrative Agent in relation to each Advance on the basis of rates
supplied by the Administrative Agent by reference to the circumstances
existing on the first day of each Interest Period in respect of such
Advance and, if any such Interest Period exceeds three months, at three
calendar monthly intervals from the first day of such Interest Period
during its duration calculated in accordance with the following formula:
AB +C(B-D) + E x 0.01 per cent per annum
---------------------
100 - (A+C)
Where:
A. is the percentage of eligible liabilities (assuming these to be in
excess of any stated minimum) which the Administrative Agent is from
time to time required pursuant to the Act to maintain as an interest
free cash ratio deposit with the Bank of England to comply with cash
ratio requirements.
B. is the percentage (expressed as a decimal) rate per annum at which
sterling deposits are offered by the Administrative Agent in
accordance with its normal practice, for a period equal to (a) the
relevant Interest Period (or, as the case may be, remainder of such
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<PAGE> 12
Interest Period) in respect of the relevant Advance or (b) three
months, whichever is the shorter, to a leading bank in the London
Interbank Market at or about 11:00 a.m. in a sum approximately equal
to the amount of such Advance.
C. is the percentage of eligible liabilities which the Administrative
Agent is required from time to time to maintain as interest bearing
special deposits with the Bank of England.
D. is the percentage (expressed as a decimal) rate per annum payable by
the Bank of England to the Administrative Agent on interest bearing
special deposits.
E. is the rate payable by the Administrative Agent to the Financial
Services authority pursuant to the Fees Regulations (but, for this
purpose, the figure at paragraph [2.02b]/[2.03b] of the Fees
Regulations shall be deemed to be zero) and calculated in pounds per
(pound)1,000,000 of the Fee Base of the Administrative Agent.
2. For the purposes of this definition:
(a) "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" shall bear the meanings
ascribed to them from time to time under or pursuant to the Bank of
England Act 1998 or (as appropriate) by the Bank of England;
(b) "FEE REGULATIONS" means the Banking Supervision (Fees) Regulations
1998 or such other regulations as may be in force from time to time in
respect of the payment of fees for banking supervision; and
(c) "FEE BASE" shall bear the meaning ascribed to it, and shall be
calculated in accordance with, the Fees Regulations.
3. The percentages used in A and C above shall be those required to be
maintained on the first day of the relevant period as determined in
accordance with B above.
4. In application of the above formula, A, B, C and D will be included in the
formula as figures and not as percentages e.g. if A is 0.5 per cent and B
is 12 per cent, AB will be calculated as 0.5 x 12 and not as 0.5 per cent x
12 per cent.
5. Calculations will be made on the basis of a 365 day year (or, if market
practice differs, in accordance with market practice).
6. A negative result obtained by subtracting D from B shall be taken as zero.
7. The resulting figures shall be rounded upwards, if not already such a
multiple, to the nearest whole multiple of one-thirty second of one percent
per annum.
8. Additional amounts calculated in accordance with this definition are
payable on the last day of the Interest Period to which they relate.
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<PAGE> 13
9. The determination of the relevant Cost Rate by the Administrative Agent in
relation to any period shall, in the absence of manifest error, be
conclusive and binding on all of the parties hereto.
10. The Administrative Agent may from time to time, after consultation with the
Borrower and the Lenders, determine and notify to all parties any
amendments or variations which are required to be made to the formula set
out above in order to comply with any requirements from time to time
imposed by the Bank of England or the Financial Services Authority (or any
other authority which replaces all or any of their functions) in relation
to Advances denominated in British Pounds Sterling (including any
requirements relating to sterling primary liquidity) and, any such
determination shall, in the absence of manifest error, be conclusive and
binding on all the parties hereto.
"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that (i) on any Borrowing Date fails
to make available to the Administrative Agent such Lender's Loans required to be
made to the Borrower on such Borrowing Date, (ii) shall not have made a payment
to the Administrative Agent required under Section 2.1(d) or (iii) shall not
have made a payment to the Issuer pursuant to Section 2.2.5(b). Once a Lender
becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender
until such time as such Defaulting Lender makes available to the Administrative
Agent, the amount of such Defaulting Lender's Loans and/or to the Issuer, such
payments requested by the Issuer together with all other amounts required to be
paid to the Administrative Agent and/or the Issuer pursuant to this Agreement.
"Disqualified Capital Stock" means (a) with respect to a Person, except as
to any Subsidiary of such Person, any Capital Stock of such Person that, by its
terms or by the terms of any security into which it is convertible, exercisable
or exchangeable, is, or upon the happening of an event or the passage of time
would be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such Person or any of its Subsidiaries, in whole or in part,
on or prior to the latest of the Term Loan A Maturity Date, the Term Loan B
Maturity Date or the Termination Date and (b) with respect to any Subsidiary of
such Person (including with respect to any Subsidiary of the Borrower), any
Capital Stock other than any common equity with no preference, privileges, or
redemption or repayment provisions.
"Documentation Agent" means, Morgan Stanley Senior Funding, Inc., in its
capacity as Documentation Agent hereunder and not in its individual capacity as
a Lender.
"Dollar Equivalent" means, with respect to any currency, at any date, the
equivalent thereof in Dollars, calculated on the basis of the arithmetical mean
of the buy and sell spot rates of exchange of the Administrative Agent for such
other currency at 11:00 a.m., London time, on the date on or as of which such
amount is to be determined.
"Dollar Revolving Credit Lender" means any Lender which has a Dollar
Revolving Credit Commitment.
"Dollar Revolving Credit Loans" means Revolving Credit Loans denominated in
Dollars made to the Borrower pursuant to Section 2.1(a).
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<PAGE> 14
"Dollar Revolving Credit Commitment" means, with respect to each Lender,
the commitment of each such Lender to make Revolving Credit Loans in Dollars
under Section 2.1(a), and to participate in Facility Letters of Credit and Swing
Loans denominated in Dollars, in amounts not exceeding in the aggregate
principal or face amount outstanding at any time the Dollar Revolving Credit
Commitment amount for such Lender set forth opposite such Lender's name in
Schedule 1.1-B under the heading "Dollar Revolving Credit Commitment" or as
otherwise established, reduced, or modified pursuant to the provisions hereof.
"Dollars" and "$" means the lawful money of the United States of America.
"Domestic Subsidiary" means any Subsidiary which is organized under
the laws of any State of the United States of America or the District of
Columbia.
"EBITDA" means, for any period, Consolidated Net Income for such
period plus all amounts deducted in determining such Consolidated Net Income on
account of (a) Consolidated Interest Expense, (b) taxes based on income or
profits of the Borrower and its Subsidiaries and, without duplication, payments
of the State of Michigan single business tax and Permitted Tax Distributions,
(c) depreciation expense and non-cash amortization expense, and (d) other
non-cash items (excluding any such non-cash item to the extent it represents an
accrual or reserve for potential cash items in any future period), all as
determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles.
"Effective Date" means the date inserted by the Administrative Agent
in the last paragraph of this Agreement.
"Eligible Accounts Receivable" means, as of any date, those accounts
receivable of the Borrower and its Subsidiaries, on a consolidated basis, valued
at the face amount thereof less, without duplication, such reserves as may be
established by the Borrower or on the books and records of the Borrower and less
such reserves as the Administrative Agent elects to establish in its credit
judgment; but shall not include any such account receivable (a) that is
outstanding more than 90 days after the earlier of the date of the related
invoice or the date the related goods were shipped or services provided, or (b)
that for any other reason is at any time deemed by the Administrative Agent to
be ineligible in its reasonable credit judgment.
"Eligible Currency" means any currency other than Dollars (i) that is
readily available, (ii) that is freely traded, (iii) in which deposits are
customarily offered to banks in the London interbank market, (iv) which is
convertible into Dollars in the international interbank market and (v) as to
which a Dollar Equivalent may be readily calculated.
"Eligible Inventory" means, as of any date, that inventory (including raw
materials, work in process and finished goods) of the Borrower and its
Subsidiaries, on a consolidated basis, less, without duplication, such reserves
as may be established by the Borrower or on its books and records and less such
reserves as the Administrative Agent elects to establish in its credit judgment;
but shall not include any such inventory (a) that does not constitute inventory
readily salable or usable in the business of the
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<PAGE> 15
Borrower or any Subsidiary, or (b) that for any other reason is at any time
deemed by the Administrative Agent to be ineligible in its reasonable credit
judgment.
"Environmental Certificate" means an appropriately completed environmental
certificate, substantially in the form approved by the Administrative Agent,
delivered by each of the Borrower and Guarantors, certified as true and correct
as of such date by an Authorized Officer of the Borrower and each Guarantor.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Euro" and/or "EUR" means the euro referred to in Council Regulation (EC) No.
1103/97 dated June 17, 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of Economic and Monetary Union.
"Eurocurrency" means (i) so long as such currencies remain Eligible Currencies,
British Pounds Sterling and the Euro, and (ii) any other Eligible Currency which
the Borrower requests the Administrative Agent to include as a Eurocurrency
hereunder and which is acceptable to all of the Multicurrency Revolving Credit
Lenders and the Administrative Agent. If, after the designation by the
Multicurrency Revolving Credit Lenders of any currency as a Eurocurrency, (x)
currency control or other exchange regulations are imposed in the country in
which such currency is issued with the result that different types of such
currency are introduced, (y) such currency is, in the determination of the
Administrative Agent, no longer readily available or freely traded or (z) in the
determination of the Administrative Agent, a Dollar Equivalent of such currency
is not readily calculable, the Administrative Agent shall promptly notify the
Lenders and the Borrower, and such currency shall no longer be a Eurocurrency
until such time as all of the Lenders agree to reinstate such currency as an
Eurocurrency and promptly, but in any event within five Business Days of receipt
of such notice from the Administrative Agent, the Borrower shall repay all Loans
in such affected currency or convert such Loans into Loans in Dollars or another
Eurocurrency, subject to the other terms set forth in Article II.
"Eurocurrency Advance" means a Multicurrency Advance which bears interest
at the Eurocurrency Rate.
"Eurocurrency Reference Rate" means, with respect to each Interest Period
for a Multicurrency Loan:
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(a) the rate per annum quoted at or about 11:00 a.m. (London time) on the
Quotation Date for such period on that page of the Bloombergs' or
Reuters' Screen which displays British Bankers Association Interest
Settlement Rates for deposits in the relevant Eurocurrency for such
period or, if such page or service shall cease to be available, such
other page or such other service (as the case may be) for the purpose
of displaying British Bankers Association Interest Settlement Rates
for such currency as the Administrative Agent, in its discretion,
shall select.
(b) If no such rate is displayed for the relevant currency and the
relevant period and there is no Eurocurrency alternative service on
which two or more such quotations for the Eurocurrency are displayed,
"Eurocurrency Reference Rate" will be the rate at which deposits in
the Eurocurrency of that amount are offered by the Administrative
Agent for that period to prime banks in the London inter bank market
at or about 11:00 a.m. (London time) on the Quotation Date for such
period.
Plus, in each case in which the Eurocurrency Advance is to be made in
British Pounds Sterling, the Cost Rate.
"Eurocurrency Loan" means a Multicurrency Loan which bears interest at the
Eurocurrency Rate.
"Eurocurrency Rate" means, with respect to a Eurocurrency Loan for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurocurrency
Reference Rate applicable to such Interest Period, divided by (ii) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest Period,
plus (b) the Applicable Margin.
"Eurodollar Advance" means an Advance which bears interest at a Eurodollar
Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the rate determined by the Administrative Agent to be
the rate at which deposits in Dollars are offered to First Chicago by prime
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, in the
approximate amount of First Chicago's relevant Eurodollar Loan and having a
maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excess Cash Flow" means for any period, the total of the following for the
Borrower and its
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<PAGE> 17
Subsidiaries on a consolidated basis: (a) EBITDA, plus (b) increases in deferred
income taxes, plus (c) decreases in Working Capital, less (d) Capital
Expenditures, less (e) Interest Expense, less (f) all principal payments on the
Advances (other than Revolving Credit Advances) during such period and all
mandatory principal payments on any other Indebtedness of the Borrower and its
Subsidiaries during such period, less (g) decreases in deferred incomes taxes
resulting from tax payments actually made during, or to be made with respect to,
such period, less (h) increases in Working Capital, less (i) taxes bases on
income or profits of the Borrower and its Subsidiaries and, without duplication,
payments of the State of Michigan single business tax and Permitted Tax
Distributions. It is acknowledged and agreed that cash being held pursuant to
Asset Sales which is expected to be reinvested in fixed assets shall be excluded
from Excess Cash Flow.
"Exchange Act" means the securities Exchange Act of 1934, as amended from
time to time, and the rules, regulations and interpretations thereunder.
"Facility Letter of Credit" means a Letter of Credit issued by the Issuer
pursuant to Section 2.2.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to the Facility Letters of Credit, including the sum of
(a) Reimbursement Obligations and (b) the aggregate undrawn face amount of the
outstanding Facility Letters of Credit.
"Fairness Committee" means a committee duly established pursuant to the
Venture Trust Instrument and the bylaws or other organizational documents of
each other Guarantor, Subsidiary and any successor to the Borrower in accordance
with the terms hereof without whose approval (and without the approval of a
majority of its Independent members) the Borrower, a Guarantor or a Subsidiary
shall not be authorized to enter into any transaction or take any action which
pursuant to the terms hereof requires approval of the Fairness Committee.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Detroit
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion or, when used in connection with any
Advance denominated in any Eurocurrency, "Federal Funds Effective Rate" means
the correlative rate of interest with respect to such Eurocurrency as determined
by the Administrative Agent in its sole discretion for such day.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, and (ii) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.
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"First Chicago" means The First National Bank of Chicago, a national
banking association, including any of its branches and Affiliates, and its
successors and assigns.
"Fixed Charges" means, for any period, without duplication, the sum of the
following amounts for such period (i) Consolidated Interest Expense, (ii) taxes
based on income or profits of the Borrower and its Subsidiaries and, without
duplication, payments of the State of Michigan single business tax payable by
the Borrower or any of its Subsidiaries and Permitted Tax Distributions, and
(iii) all scheduled principal payments paid or payable on Indebtedness, all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles.
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal quarter,
the ratio of (a) EBITDA minus Capital Expenditures to (b) Fixed Charges, in each
case calculated for the four consecutive fiscal quarters then most recently
ended for the Borrower and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles consistently applied. Any
purchase of fixed assets paid for with the Net Cash Proceeds from the sale of
any other fixed assets within 360 days of such sale shall not be considered a
Capital Expenditure under this definition to the extent such Net Cash Proceeds
were used for such payment.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Foreign Plan" means any employee pension or welfare plan as described in
Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit
of employees of the Borrower, any of its subsidiaries or any other member of the
Controlled Group, and (ii) is not covered by ERISA pursuant to Section 4(b)(4)
of ERISA.
"Foreign Subsidiary" means each Subsidiary of the Borrower other than a
Domestic Subsidiary.
"Foreign Subsidiary Opinion" means with respect to any Foreign Subsidiary,
a legal opinion of counsel to such Foreign Subsidiary addressed to the
Administrative Agent and the Lenders with respect to the matters listed on
Exhibit B, with such assumptions, qualifications and deviations therefrom as the
Administrative Agent shall approve.
"Governmental Authority" means any nation or government, any state, or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, whether foreign or domestic.
"Guarantor" means each present and future Domestic Subsidiary of the
Borrower and each present and future Foreign Subsidiary of the Borrower required
by the Administrative Agent to enter into a Guaranty, which Guaranty is not
prohibited by applicable law or existing contractual restrictions or
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<PAGE> 19
determined by the Administrative Agent to be impractical or cost prohibitive.
"Guaranty" means, collectively, that certain Guaranty in the form of
Exhibit C hereto, executed by the Guarantors in favor of the Administrative
Agent, for the ratable benefit of the Lenders, and any other guaranty executed
at any time by any Guarantor in connection herewith, as any of the foregoing may
be amended or modified from time to time.
"Indebtedness" of a Person means, without duplication, such Person's (i)
obligations for borrowed money or similar monetary obligations, (ii) obligations
representing the deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's business
payable on terms customary in the trade), (iii) obligations of others, whether
or not assumed, secured by Liens or payable out of the proceeds or production
from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, bonds, indentures or
other instruments, (v) Capitalized Lease Obligations, (vi) obligations under
Financial Contracts, provided that any obligation under any specific Financial
Contract shall be net of amount owing to such Person under such Financial
Contract, (vii) all reimbursements obligations under outstanding Letters of
Credit in respect of drafts which (A) may be presented or (B) have been
presented and have not yet been paid, (viii) monetary obligations under any
receivables factoring, receivable sales or similar transactions and all monetary
obligations under any synthetic lease, tax ownership/operating lease,
off-balance sheet financing or similar financing, and (ix) Contingent
Obligations of such Person for any of the obligations of other Persons of the
type described in the foregoing clauses (i) through (viii).
"Independent" shall have the meanings ascribed thereto in the 1999 Senior
Unsecured Indenture as in effect on the date hereof.
"Interim Term Loan" means the term loans made on the Effective Date to the
Borrower by the Interim Term Loan Lenders pursuant to Section 2.5.
"Interim Term Loan Lenders" means the Lenders from time to time parties
hereto as lenders of the Interim Term Loan.
"Interim Term Loan Maturity Date" means November 27, 2000.
"Interim Term Loan Commitment" means with respect to each Interim Term Loan
Lender, the commitment of such Lender to make the Advance of the Interim Term
Loan on the Effective Date in an amount not exceeding the Interim Term Loan
Commitment amount for such Lender set forth on Schedule 1.1-B, or as otherwise
established, reduced or modified pursuant to the provisions hereof.
"Interim Term Loan Percentage" means with respect to each Interim Term Loan
Lender, its percentage share of Interim Term Loan.
"Interest Coverage Ratio" means, as of the end of any fiscal quarter, the
ratio of (a) EBITDA for the four fiscal quarters then ending to (b) to the sum
of Consolidated Interest Expense, in each case calculated for the four
consecutive fiscal quarters then most recently ended for the Borrower and its
Subsidiaries on a consolidated basis in accordance with Agreement Accounting
Principles consistently
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applied, provided, however, that (i) Consolidated Interest Expense as calculated
for the period ending September 30, 1999 shall be deemed equal to the amount of
Consolidated Interest Expense for the fiscal quarter ending September 30, 1999
times four, (ii) Consolidated Interest Expense calculated for the period ending
December 31, 1999 shall be deemed equal to the amount of Consolidated Interest
Expense for the two consecutive fiscal quarters ending December 31, 1999 times
two and (iii) Consolidated Interest Expense as calculated for the period ending
March 31, 2000 shall be deemed equal to the amount of Consolidated Interest
Expense for the three consecutive fiscal quarters ending March 31, 2000 times
four thirds.
"Interest Period" means, with respect to a Eurodollar Advance or a
Eurocurrency Advance, a period of one, two, three or six months commencing on a
Business Day selected by the Borrower pursuant to this Agreement. Such Interest
Period shall end on the day which corresponds numerically to such date one, two,
three, or six months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third, or sixth succeeding month. If a Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Issuer" means First Chicago and any other Lender designated at any time in
writing to the parties to the Agreement as an Issuer by the Borrower and the
Administrative Agent.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers, employees and independent contractors
made in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on terms
customary in the trade) or contribution of capital by such Person; stocks,
bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and certificate of deposit
owned by such Person; and structured notes, derivative financial instruments and
other similar instruments or contracts owned by such Person.
"Joint Venture" means a limited purpose corporation, partnership, limited
liability company, joint venture or similar legal arrangement (whether created
by contract or conducted through a separate legal entity) now or hereafter
formed by the Borrower or any of its Subsidiaries with another Person or Persons
in order to conduct a common venture or enterprise with such Person or Persons.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, any office, branch, subsidiary or Affiliate of such Lender
or the Administrative Agent with respect to each Eurocurrency listed on the
administrative information sheets provided to the Administrative Agent in
connection herewith or otherwise selected by such Lender or the Administrative
Agent pursuant to Section 2.18.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon
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the application of such Person or upon which such Person is an account party or
for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 2.2.7.
"Leverage Ratio" means, at any time, the ratio of Total Debt at such time
to EBITDA calculated for the four most recently ended fiscal quarters as of such
time.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement benefiting a
third party of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capitalized Lease or
other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof), and, with respect to the
Administrative Agent, the Swing Loans.
"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
the Guaranty, the Environmental Certificate, Rate Hedging Agreements with any
Lender or its Affiliates and all other agreements and documents contemplated
hereby or otherwise executed in connection herewith by the Borrower or any
Guarantor.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower or any Guarantor to perform its obligations under the
Loan Documents, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders
thereunder.
"Mortgages" means each mortgage, deed of trust or similar document granting
a Lien on real property entered into by the Borrower or any Guarantor for the
benefit of the Administrative Agent and the Lenders pursuant to this Agreement,
substantially in the forms as approved by the Administrative Agent, as amended
or modified from time to time.
"Multicurrency Advance" means a borrowing hereunder (or continuation or a
conversion thereof) consisting of the several Multicurrency Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to a
Borrower of the same Type, in the same Eurocurrency and for the same Interest
Period.
"Multicurrency Revolving Credit Commitment" means, as to any Multicurrency
Revolving Credit Lender at any time, its obligation to make Revolving Credit
Loans to the Borrower in Eurocurrencies under Section 2.1.(b) in an aggregate
amount not to exceed at any time outstanding the Dollar Equivalent of the amount
set forth opposite such Lender's name in Schedule 1.1-B under the heading
"Multicurrency Revolving Credit Commitment" or as otherwise established, reduced
or
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modified pursuant to the provisions hereof.
"Multicurrency Revolving Credit Lender" means a Revolving Credit Lender
which has a Multicurrency Revolving Credit Commitment or holds a Multicurrency
Revolving Credit Loan.
"Multicurrency Revolving Credit Loans" means Revolving Credit Loans
denominated in Eurocurrencies made to the Borrower pursuant to Section 2.1(b).
"Multiemployer Plan" means a plan defined in Section 4001(a)(3) of ERISA to
which the Borrower or any member of the Controlled Group has an obligation to
contribute.
"Net Cash Proceeds" means, without duplication (a) in connection with any
sale or other disposition of any asset or any settlement by, or receipt of
payment in respect of, any property insurance claim or condemnation award, the
cash proceeds (including any cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such sale,
settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Administrative Agent for the benefit
of the Administrative Agent and the Lenders) and other customary fees and
expenses actually incurred in connection therewith, taxes paid or reasonably
estimated to be payable as a result thereof, and any cash reserves required to
be maintained for liabilities associated with the sale (provided that such cash
reserves shall become Net Cash Proceeds when no longer required to be held as
reserves), and (b) in connection with any issuance or sale of any equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of investment
banking fees, reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other reasonable and customary fees
and expenses actually incurred in connection therewith.
"1997 Credit Agreement" means the Credit Agreement dated as of July_9,
1997, as amended, among the borrowers named therein, the lenders party thereto
and NBD Bank, as agent.
"1997 Senior Unsecured Indenture" means the Indenture dated as of July 1,
1997 among the Borrower and certain of its Subsidiaries, as Issuers and The
Huntington National Bank, as Indenture Trustee, under which the 1997 Senior
Unsecured Notes were issued.
"1997 Senior Unsecured Debt Documents" means the 1997 Senior Unsecured
Indenture, together with all agreements, documents and instruments executed in
connection therewith at any time related to the 1997 Senior Unsecured Notes.
"1997 Senior Unsecured Notes" means the $205,000,000 9 1/2% Senior Notes
due 2005 issued by the Borrower and certain of its Subsidiaries on July 9, 1997.
"1999 Senior Unsecured Indenture" means that certain Indenture dated as of
the Effective Date among the Borrower, as issuer, and The Huntington National
Bank, as Indenture Trustee, under which
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<PAGE> 23
the 1999 Senior Unsecured Notes were issued.
"1999 Senior Unsecured Debt Documents" means the 1999 Senior Unsecured
Indenture, together with all agreements, documents and instruments executed in
connection therewith at any time related to the 1999 Senior Unsecured Notes.
"1999 Senior Unsecured Notes" means the $125,000,000 Senior Notes due 2007
issued by the Borrower on the Effective Date.
"1999 Subordinated Debt" means all Indebtedness owing pursuant to the 1999
Subordinated Debt Documents.
"1999 Subordinated Debt Documents" means the 1999 Subordinated Indenture,
together with all agreements, documents and instruments executed in connection
therewith at any time related to the 1999 Subordinated Notes.
"1999 Subordinated Indenture" means that certain Indenture dated as of the
Effective Date among the Borrower, as issuer, and The Huntington National Bank,
as Indenture Trustee, under which the 1999 Subordinated Notes were issued.
"1999 Subordinated Notes" means the $125,000,000 Senior Subordinated Notes
due 2009 issued by the Borrower on the Effective Date.
"Note" means the Swingline Note, any Revolving Credit Note or any Term
Note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means, without duplication, all unpaid principal of and
accrued and unpaid interest on the Loans, all accrued and unpaid fees, all
Facility Letter of Credit Obligations and all other obligations of any of the
Borrower or Guarantors to the Lenders or to any Lender or the Issuer or the
Administrative Agent arising under the Loan Documents, in each case whether now
or hereafter owing.
"Operating Expense or Cost Reduction" means, with respect to the
calculation of any financial ratio under this Agreement on a Pro Forma Basis, an
operating expense or cost reduction with respect to an Acquisition, which, in
the good faith estimate of management, will be realized as a result of such
Acquisition, provided that the foregoing eliminations of operating expenses and
realizations of cost reductions shall be of the types permitted to be given
effect to in accordance with Article 11 of Regulation S-X under the Exchange Act
and the rules and regulations promulgated by the Securities and Exchange
Commission thereunder, as in effect on the Effective Date and such reduction is
subject to negative comfort by the Borrower's independent public accountants.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
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"Overdue Rate" means (a) in respect of principal of Floating Rate Loans, a
rate per annum that is equal to the sum of three percent (3%) per annum plus the
Floating Rate, (b) in respect of principal of Eurodollar Loans or Eurocurrency
Loans, a rate per annum that is equal to the sum of three percent (3%) per annum
plus the per annum rate in effect thereon until the end of the then current
Interest Period for such Loan and, thereafter, a rate per annum that is equal to
the sum of three percent (3%) per annum plus the Floating Rate, and (c) in
respect of other amounts payable by the Borrower hereunder (other than
interest), a per annum rate that is equal to the sum of three percent (3%) per
annum plus the Floating Rate.
"Participants" is defined in Section 12.2.1.
"Pass Through Entity" is defined in Section 6.10.
"Payment Date" means the last Business Day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Peguform" means Peguform GmbH, a limited liability company organized under
the laws of Germany.
"Peguform Acquisition" means the Acquisition to be completed pursuant to
the Peguform Acquisition Documents.
"Peguform Acquisition Documents" means the agreements dated on March 8,
1999 between the Borrower and those companies listed in the agreements for the
Acquisition of Peguform, together with all agreements, documents and instruments
executed in connection therewith or otherwise pursuant thereto.
"Peguform Restructuring" means the restructuring to be completed following
the Peguform Acquisition as described on Schedule 1.1-C hereto.
"Permitted Tax Distributions" is defined in Section 6.10.
"Person" or "person" means any natural person, corporation, firm, limited
liability company, joint venture, partnership, association, enterprise, trust or
other entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreements" means each Pledge Agreement entered into by the
Borrower or any Guarantor for the benefit of the Administrative Agent and the
Lenders pursuant to this Agreement substantially in the forms attached hereto as
Exhibits D-1 and D-2, as amended or modified from time to time.
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"Principal" means Larry J. Winget.
"Pro Forma Basis" means, for purposes of calculating compliance with any
financial ratio under this Agreement, giving pro forma effect to certain
transactions such that, (i) Acquisitions which occurred during the four full
fiscal quarters ended immediately preceding any date upon which any
determination is to be made pursuant to this Agreement (the "Reference Period")
or subsequent to the Reference Period and on or prior to the determination date
shall be assumed to have occurred on the first day of the Reference Period and
any Operating Expense or Cost Reduction with respect to such Acquisition shall
be deducted from such calculation, (ii) transactions giving rise to the need to
calculate any financial ratio under this Agreement shall be assumed to have
occurred on the first day of the Reference Period, (iii) the incurrence of any
Indebtedness or issuance of any Disqualified Capital Stock during the Reference
Period or subsequent to the Reference Period and on or prior to the
determination date (and the application of the proceeds therefrom, including to
refinance or retire other Indebtedness) shall be assumed to have occurred on the
first day of such Reference Period (except that, in making such computation, the
amount of Indebtedness under any revolving credit facility shall be computed
based on the average daily balance during the Reference Period), and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the
average rate in effect from the beginning of the Reference Period to the
determination date had been the applicable rate for the entire period, unless
such person or any of its Subsidiaries is a party to any Rate Hedging Agreement
(which shall remain in effect for the 12-month period immediately following the
determination date) that has the effect of fixing the interest rate on the date
of computation, in which case such rate (whether higher or lower) shall be used.
"Pro Forma Financial Statements and Projections" mean the pro forma
financial statements giving effect to the Acquisition and projections of the
financial results of the Borrower previously furnished by the Borrower to the
Administrative Agent and the Lenders.
"Pro Rata Share" means, for each Lender, the ratio such Lender's Revolving
Credit Commitment bears to the Aggregate Revolving Credit Commitment, or, if the
Revolving Credit Commitments have been terminated, the ratio such Lender's
Revolving Credit Commitment bore to the Aggregate Revolving Credit Commitment
immediately prior to such termination, subject to Section 2.5(b).
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Quotation Date" in relation to any period for which a Eurocurrency
Reference Rate is to be determined hereunder, means the date on which quotations
would ordinarily be given by prime lenders in the London inter-bank market for
deposits in the Eurocurrency in relation to which such rate is to be determined
for delivery on the first day of that period, provided that, if, for such
period, quotations would ordinarily be given on more than one date, the
Quotation Date for that period shall be the last of those dates.
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<PAGE> 26
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
commodity prices, exchange rates or forward rates, including, but not limited
to, dollardenominated or crosscurrency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Hedging Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Reimbursement Obligations" means, at any time, without duplication, the
aggregate of the obligations of the Borrower to the Lenders and the Issuer in
respect of all unreimbursed payments or disbursements made by the Issuer and the
Lenders under or in respect of the Facility Letters of Credit.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Related Party" means the Principal's estate or legal representative,
members of his immediate family and all lineal descendants of the Principal and
all spouses of such lineal descendants (or any trust(s) or entity(ies) whose
sole beneficiaries or holders of Capital Stock, or the holders of a majority of
the outstanding Voting Stock are any one or more of the foregoing).
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
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"Required Lenders" at any time means Lenders holding at least 51% of the
Revolving Credit Commitments, the Aggregate Interim Term Loan Outstandings of
all Lenders, the Aggregate Term Loan A Outstandings of all Lenders and the
Aggregate Term Loan B Outstandings of all Lenders (or 51% of the Aggregate Total
Outstandings at such time if the Revolving Credit Commitments have been
terminated).
"Required Multicurrency Revolving Credit Lenders" at any time means
Multicurrency Revolving Credit Lenders holding at least 51% of the Multicurrency
Revolving Credit Commitments (or 51% of the Aggregate Multicurrency Revolving
Credit Outstandings at such time if the Revolving Credit Commitments have been
terminated).
"Required Revolving Credit Lenders" means Revolving Credit Lenders holding
not less than 51% of the Revolving Credit Commitments (or 51% of the Revolving
Credit Loans and Reimbursement Obligations if the Revolving Credit Commitments
have been terminated).
"Required Term Loan A Lenders" means Term Loan A Lenders holding not less
than 51% of the Term Loan A Commitments (or 51% of the Aggregate Term Loan A
Outstandings if the Term Loan A Commitments have been terminated.)
"Required Term Loan B Lenders" means Term Loan B Lenders holding not less
than 51% of the Term Loan B Commitments (or 51% of the Aggregate Term Loan B
Outstandings if the Term Loan B Commitments have been terminated.)
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities and/or under any applicable requirements of any Governmental
Authority in the country in which such Eurocurrency circulates in the case of
any Multicurrency Loan, without duplication of the effect of the Cost Rate in
the determination of applicable interest rates and costs hereunder.
"Revolving Credit Commitments" means, with respect to each Lender, the
commitment of each such Lender to make Revolving Credit Loans, and to
participate in Facility Letters of Credit and Swing Loans, in amounts not
exceeding in the aggregate principal or face amount outstanding at any time the
Revolving Credit Commitment amount for such Lender set forth next to the name of
such Lender on the signature pages hereof, or, as to any Lender becoming a party
hereto after the Effective Date, as set forth in the applicable assignment, in
each case as reduced or modified pursuant to this Agreement.
"Revolving Credit Lenders" means those Lenders which have Revolving Credit
Commitments or, if such Revolving Credit Commitments shall have been terminated,
have outstanding Revolving Credit Loans or Facility Letters of Credit
Obligations.
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"Revolving Credit Loan" means any borrowing under Section 2.1(a) or (b).
"Revolving Credit Notes" means the promissory notes, if any, of the
Borrower in substantially the form of Exhibit E hereto evidencing the Revolving
Credit Loans, respectively, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Same Day Funds" means (i) with respect to disbursements and payments in
Dollars, immediately available funds, and (ii) with respect to disbursements and
payments in any Eurocurrency, same day or other funds as may be determined by
the Administrative Agent to be customary in the place of disbursement or payment
for the settlement of international banking transactions in the relevant
Eurocurrency.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii) all
Rate Hedging Obligations owing to one or more Lenders or their Affiliates.
"Securities Act" means the Securities Act of 1993, as amended from time to
time, and the rules, regulations and interpretations thereunder.
"Security Agreement" means each security agreement in substantially the
form of Exhibit F hereto entered into by the Borrower or any Guarantor for the
benefit of the Administrative Agent and the Lenders pursuant to this Agreement,
as amended or modified from time to time.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Significant Subsidiary" means any one or more Subsidiaries of the Borrower
which, if considered in the aggregate as a single Subsidiary, (i) represent more
than 5% of the consolidated assets of the Borrower and its Subsidiaries as would
be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve month period ending with the
month in which such determination is made, or (ii) are responsible for more than
10% of the consolidated net sales or of the consolidated net income of the
Borrower and its Subsidiaries as reflected in the financial statements referred
to in clause (i) above.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Secured
Obligations to the written satisfaction of the Required Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business
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organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" means a Subsidiary
of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, property which (i) represents more than 5% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Swing Loans" is defined in Section 2.1(d).
"Swingline Note" means the promissory note of the Borrower evidencing the
Swing Loans, in form satisfactory to the Administrative Agent, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Syndication Agent" means The Bank of Nova Scotia as Syndication Agent
hereunder, and not in its individual capacity as a Lender.
"Term Loan A" means the term loans made on the Effective Date to the
Borrower by the Term Loan A Lenders pursuant to Section 2.3.
"Term Loan A Lenders" means the Lenders from time to time parties hereto as
lenders of Term Loan A.
"Term Loan A Commitment" means with respect to each Term Loan A Lender, the
commitment of such Lender to make an Advance of Term Loan A in an amount not
exceeding the Term Loan A Commitment amount for such Lender set forth on
Schedule 1.1-B, or as otherwise established, reduced or modified pursuant to the
provisions hereof.
"Term Loan A Maturity Date" means May 27, 2004.
"Term Loan A Percentage" means with respect to each Term Loan A Lender, its
percentage share of Term Loan A.
"Term Loan Lenders" means collectively the Interim Term Loan Lenders, the
Term Loan A Lenders and the Term Loan B Lenders.
"Term Loan B" means the term loans made on the Effective Date to the
Borrower by the Term Loan B Lenders pursuant to Section 2.4.
"Term Loan B Commitment" means with respect to each Term Loan B Lender, the
commitment of such Lender to make Advances of Term Loans B on the Effective Date
in an amount not exceeding
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the Term Loan B Commitment amount for such Lender set forth on Schedule 1.1-B,
or as otherwise established, reduced or modified pursuant to the provisions
hereof.
"Term Loan B Lenders" means the Lenders from time to time parties hereto as
lenders of Term Loan B.
"Term Loan B Maturity Date" means April 1, 2005.
"Term Loan B Percentage" means with respect to each Term Loan B Lender, its
percentage share of Term Loan B.
"Term Notes" means the term notes, if any, made by the Borrower to each of
the applicable Lenders in the form attached as Exhibits G-1, G-2 and G-3 to this
Agreement to evidence Term Loan A, Term Loan B and the Interim Term Loan,
respectively, as such notes may be amended or supplemented from time to time,
and any notes issued in substitution,_renewal or replacement thereof from time
to time.
"Termination Date" means the earlier to occur of (a) May 27, 2004, and (b)
the date on which the Revolving Credit Commitments shall be terminated pursuant
hereto.
"Total Debt" as of any date, means all of the following for the Borrower
and its Subsidiaries on a consolidated basis and without duplication: (i) all
debt for borrowed money and similar monetary obligations evidenced by bonds,
notes, debentures, Capitalized Lease Obligations or otherwise, including without
limitation obligations in respect of the deferred purchase price of properties
or assets and all monetary obligations and other amounts financed pursuant to
any receivables factoring, receivable sales or similar transactions, any
synthetic lease, tax ownership/operating lease, off-balance sheet financing or
similar financing, in each case whether direct or indirect; (ii) all liabilities
of others secured by any Lien existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(iii) all reimbursement obligations under outstanding letters of credit, bankers
acceptances or similar instruments in respect of drafts which (A) may be
presented or (B) have been presented and have not yet been paid and are not
included in clause (i) above; and (iv) all guarantees and other Contingent
Obligations relating to indebtedness or liabilities of the type described in the
foregoing clauses (i), (ii) or (iii).
"Transferee" is defined in Section 12.4.
"Trust Contribution" is defined in Section 6.12.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance, Eurodollar Advance or Eurocurrency Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
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"United Kingdom" or "U.K." means the United Kingdom of Great Britain and
Northern Ireland.
"United States" or "U.S." means the United States of America.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Venture Trust Instrument" means the Agreement, dated December 28, 1987, as
amended and restated on February 16, 1994, as amended, among the Principal, as
Trustee, and the Principal, as Settlor, Beneficiary and Special Advisor, as such
agreement may be amended in accordance with the terms hereof.
"VHT Trustee" means the Principal, as trustee under the Venture Trust
Instrument, and any successor or replacement trustee or any co-trustee appointed
pursuant to the terms of the Venture Trust Instrument.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, trustees or
similar persons thereof.
"WhollyOwned Subsidiary" of a Person means any Subsidiary of such Person
for which at least 99% of the outstanding Voting Stock of such Subsidiary shall
at the time be owned or controlled, directly or indirectly, by such Person.
"Working Capital" means, as of any date, the amount, if any, by which
Consolidated Current Assets exceeds Consolidated Current Liabilities.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries and of the Borrower's and its Subsidiaries' material customers,
suppliers and vendors.
"Year 2000 Program" is defined in Section 5.28.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
2. THE CREDITS
a. Revolving Credit Commitments of the Lenders
(1) Dollar Revolving Credit Loans. Each Revolving Credit Lender
agrees, for itself only, subject to the terms and conditions
of this Agreement, to make Dollar Revolving Credit Loans to
the Borrower from time to time from and including the
Effective Date to but excluding the Termination
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Date, not to exceed in aggregate principal amount at any
time outstanding the amount determined pursuant to Section
2.1(c). Dollar Revolving Credit Loans or any portion thereof
at the Borrower's option, may be Floating Rate Loans or
Eurodollar Loans or any combination thereof subject to the
terms thereof, with the initial selection by the Borrower in
accordance with procedures acceptable to the Administrative
Agent and the subsequent selections in accordance with
Sections 2.10 or 2.11 .
(2) Multicurrency Revolving Credit Loans Each Multicurrency
Revolving Credit Lender agrees, for itself only, subject to
the terms and conditions of this Agreement, to make
Multicurrency Revolving Credit Loans to the Borrower from
time to time from and including the Effective Date to but
excluding the Termination Date, not to exceed in aggregate
principal amount at any time outstanding the amount
determined pursuant to Section 2.1(c). Multicurrency
Revolving Credit Loans shall be Eurocurrency Loans, with the
initial selection by the Borrower in accordance with
procedures acceptable to the Administrative Agent and any
subsequent selections in accordance with Sections 2.10 and
2.11.
(3) Limitation on Amount of Advances. Notwithstanding anything
in this Agreement to the contrary, (i) the Dollar Equivalent
of the aggregate principal amount of the Revolving Credit
Loans, the Swing Loans and the Facility Letter of Credit
Obligations at any time outstanding to the Borrower shall
not exceed the lesser of (A) the amount of the Borrowing
Base as of the most recently received Borrowing Base
Certificate and (B) the Aggregate Revolving Credit
Commitment as of the date any such Advance is made,
provided, however, that the Dollar Equivalent of the
aggregate Facility Letter of Credit Obligations at any time
shall not exceed $50,000,000 and the Dollar Equivalent of
the aggregate of Swing Loans at any time outstanding shall
not exceed $15,000,000, (ii) the Dollar Equivalent of the
Aggregate Revolving Credit Outstandings of any Revolving
Credit Lender shall not exceed the Revolving Credit
Commitment of such Lender, and (iii) the Dollar Equivalent
of the Aggregate Multicurrency Revolving Credit Outstandings
of any Multicurrency Revolving Credit Lender shall not
exceed the Multicurrency Revolving Credit Commitment of such
Lender.
(4) Swing Loans.
(a) Making of Swing Loans. The Administrative Agent may
elect in its sole discretion to make revolving loans
(the "Swing Loans") to the Borrower from time to time
prior to the Termination Date in Dollars or any
Eligible Currency up to an aggregate Dollar Equivalent
at any one time outstanding not to exceed the lesser of
(i) $15,000,000 or (ii) the amount allowable
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under Section 2.1(c). The Administrative Agent may make
Swing Loans (provided that the Administrative Agent has
received a request in writing or via telephone from an
Authorized Officer for funding of a Swing Loan) no
later than noon, Detroit time, on the Business Day on
which such Swing Loan is requested to be made, or 11:00
a.m., London time, on such Business Day, in the case of
any Swing Loan in an Eligible Currency. Each
outstanding Swing Loan shall be payable on the Business
Day following demand therefor and in any event no later
than five Business Days after the Borrowing Date for
such Swing Loan, with interest at such rate as the
Borrower and the Administrative Agent shall agree,
shall be secured as part of the Secured Obligations by
the Collateral and shall otherwise be subject to all
the terms and conditions applicable to Loans, except
that all interest thereon shall be payable to the
Administrative Agent solely for its own account.
(b) Swing Loan Borrowing Requests. The Borrower agrees to
deliver promptly to the Administrative Agent a written
confirmation of each telephonic notice for Swing Loans
signed by an Authorized Officer. If the written
confirmation differs in any material respect from the
action taken by the Administrative Agent, the records
of the Administrative Agent shall govern, absent
manifest error.
(c) Repayment of Swing Loans. At any time after making a
Swing Loan, the Administrative Agent may request the
Borrower to, and upon request by the Administrative
Agent the Borrower shall, promptly request a Revolving
Credit Loan from all the Revolving Credit Lenders and
apply the proceeds of such Revolving Credit Loan to the
repayment of any Swing Loan owing by the Borrower not
later than three Business Days following the
Administrative Agent's request. Notwithstanding the
foregoing, upon the earliest to occur of (a) 12 noon,
Detroit time, on the sixth Business Day after a Swing
Loan is made, (b) three Business Days after demand is
made by the Administrative Agent, (c) the date a Swing
Loan is to be refunded with a Revolving Credit Loan,
and (d) the Termination Date, the Borrower agrees that
each Swing Loan outstanding in an Eligible Currency
shall be immediately and automatically converted to and
redenominated in Dollars equal to the Dollar Equivalent
of each such Swing Loan determined as of the date of
such conversion, and each Revolving Credit Lender
(other than the Administrative Agent) shall irrevocably
and unconditionally purchase from the Administrative
Agent, without recourse or warranty, an undivided
interest and participation in such Swing Loan in an
amount equal to such
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Lender's Pro Rata Share of such Swing Loan and promptly
pay such amount to the Administrative Agent in
immediately available funds. Such payment shall be made
by the other Lenders whether or not a Default or
Unmatured Default is then continuing or any other
condition precedent set forth in Section 4.2 is then
met and whether or not the Borrower has then requested
an Advance in such amount; and such Swing Loan shall
thereupon be deemed to be a Floating Rate Advance
hereunder made on the date of such purchase (except, as
aforesaid, with respect to the existence of any Default
or Unmatured Default or the meeting of any condition
precedent specified in Section 4.2 on such date). If
any Lender fails to make available to the
Administrative Agent any amounts due to the
Administrative Agent pursuant to this Section, the
Administrative Agent shall be entitled to recover such
amount, together with interest thereon at the Federal
Funds Effective Rate for the first three Business Days
after such Lender receives notice of such required
purchase and thereafter, at the Floating Rate, payable
(i) on demand, (ii) by setoff against any payments made
to the Administrative Agent for the account of such
Lender or (iii) by payment to the Administrative Agent
by the Administrative Agent of amounts otherwise
payable to such Lender under this Agreement. The
failure of any Revolving Credit Lender to make
available to the Administrative Agent its Pro Rata
Share of any unpaid Swing Loan shall not relieve any
other Revolving Credit Lender of its obligation
hereunder to make available to the Administrative Agent
its Pro Rata Share of any unpaid Swing Loan on the date
such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make
available to the Administrative Agent its Pro Rata
Share of any unpaid Swing Loan.
b. Facility Letters of Credit.
i. Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Borrower and the Guarantors in the Loan Documents, the Issuer
hereby agrees to issue for the account of the Borrower through such of
the Issuer's Lending Installations as the Issuer and the Borrower may
jointly agree, one or more Facility Letters of Credit in accordance
with this Section 2.2, from time to time during the period, commencing
on the Effective Date and ending on the Business Day prior to the
Termination Date.
ii. Conditions for Issuance. In addition to being subject to the
satisfaction of the conditions contained in Section 4.2, the
obligation of the Issuer to issue any Facility Letter of Credit is
subject to the satisfaction in full of the following conditions:
(a) the aggregate maximum amount then available for drawing
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under Letters of Credit issued by the Issuer, after giving
effect to the Facility Letter of Credit requested hereunder,
shall not exceed any limit imposed by law or regulation upon
the Issuer;
(b) after giving effect to the requested issuance of any
Facility Letter of Credit, the sum of (a) the Facility
Letter of Credit Obligations and (b) the total aggregate
unpaid principal balance of the Revolving Credit Loans and
Swing Loans does not exceed the amount permitted under
2.1(c).
(c) the requested Letter of Credit has an expiration date prior
to the earlier of the Termination Date or the date one year
after the issuance of such Letter of Credit;
(d) the Borrower shall have delivered to the Issuer at such
times and in such manner as the Issuer may reasonably
prescribe such documents and materials as may be required
pursuant to the terms of the proposed Letter of Credit and
the proposed Letter of Credit shall be reasonably
satisfactory to the Issuer as to form and content; and
(e) as of the date of issuance, no order, judgment or decree of
any court, arbitrator or governmental authority shall
purport by its terms to enjoin or restrain the Issuer from
issuing the Facility Letter of Credit and no law, rule or
regulation applicable to the Issuer and no request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuer
shall prohibit or request that the Issuer refrain from the
issuance of Letters of Credit generally or the issuance of
that Facility Letter of Credit.
iii. Procedure for Issuance of Facility Letters of Credit.
(1) The Borrower shall give the Issuer two Business Day's prior
written notice of any requested issuance of a Facility Letter of
Credit under this Agreement (except that, in lieu of such written
notice, the Borrower may give the Issuer (x) notice of such
request by tested telex or other tested arrangement satisfactory
to the Issuer or (y) telephonic notice of such request if
confirmed in writing by delivery to the Issuer (i) immediately
(A) of a telecopy of the written notice required hereunder which
has been signed by an Authorized Officer of the Borrower or (B)
of a telex containing all information required to be contained in
such written notice and (ii) promptly (but in no event later than
the requested time of issuance) of a copy of the written notice
required hereunder containing the original signature of an
Authorized Officer of the Borrower); such notice shall be
irrevocable and shall specify the stated amount of the Facility
Letter of Credit requested, the effective date (which day shall
be a Business Day) of issuance of such requested Facility Letter
of Credit, the date on which such requested Facility Letter of
Credit is to expire (which date shall be a Business Day and shall
in no event be later than the earlier of Termination Date or the
date one year after the issuance of
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such Letter of Credit), the purpose for which such Facility
Letter of Credit is to be issued, and the Person for whose
benefit the requested Facility Letter of Credit is to be issued.
At the time such request is made, the Borrower shall also provide
the Issuer with a copy of the form of the Facility Letter of
Credit it is requesting be issued. Such notice, to be effective,
must be received by the Issuer not later than 2:00 p.m. (Detroit
time) or the time agreed upon by the Issuer and the Borrower on
the last Business Day on which notice can be given under this
Section 2.2.3(a). The Issuer shall promptly forward to the
Lenders a copy of the Borrower's request for the issuance of a
Letter of Credit hereunder.
(2) Subject to the terms and conditions of this Section 2.2.3 and
provided that the applicable conditions set forth in Sections 4.2
and 2.2.2 hereof have been satisfied, the Issuer shall, on the
requested date, issue a Facility Letter of Credit on behalf of
the Borrower in accordance with the Issuer's usual and customary
business practices.
(3) The Issuer shall not extend or amend any Facility Letter of
Credit unless the requirements of this Section 2.2.3 are met as
though a new Facility Letter of Credit was being requested and
issued.
iv. Reimbursement Obligations.
(1) The Borrower agrees to pay to the Administrative Agent, without
duplication, the amount of all Reimbursement Obligations,
interest and other amounts payable to the Administrative Agent
under or in connection with any Facility Letter of Credit
immediately when due, irrespective of any claim, setoff, defense
or other right which the Borrower or any Subsidiary may have at
any time against the Issuer or any other Person, under all
circumstances, including without limitation, any of the following
circumstances:
(a) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(b) the existence of any claim, setoff, defense or other right
which the Borrower or any Subsidiary may have at any time
against a beneficiary named in a Facility Letter of Credit
or any transferee of any Facility Letter of Credit (or any
Person for whom any such transferee may be acting), the
Issuer, any Lender, or any other Person, whether in
connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying
transactions between the Borrower or any Subsidiary and the
beneficiary named in any Facility Letter of Credit);
(c) any draft, certificate or any other document presented under
the Facility Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
(provided that, if all Reimbursement Obligations have been
paid in full and there is no Default or Unmatured Default,
the Issuer shall assign,
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without recourse, representation or warranty, to the
Borrower any claim, if any, it may have against any person
that has drawn on a Facility Letter of Credit pursuant to a
draft, certificate or other document which was forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being true or inaccurate in any respect
pursuant to such Facility Letter of Credit);
(d) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
Loan Documents;
(e) the occurrence of any Default or Unmatured Default.
(2) The Issuer shall promptly notify the Borrower of any draw under a
Facility Letter of Credit. The Borrower shall reimburse the
Issuer for drawings under a Facility Letter of Credit issued by
it no later than the Business Day after the payment by the
Issuer. Any Reimbursement Obligation with respect to any Facility
Letter of Credit shall bear interest from the date of the
relevant drawings under the pertinent Facility Letter of Credit
until paid at the Overdue Rate.
v. Participation.
(1) Immediately upon issuance by the Issuer of any Facility Letter of
Credit in accordance with the procedures set forth in Section
2.2.3 each Revolving Credit Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the
Issuer, without recourse or warranty, an undivided interest and
participation equal to its Pro Rata Share in such Facility Letter
of Credit (including, without limitation, all obligations of the
Borrower with respect thereto) and any security therefor or
guaranty pertaining thereto; provided, that a Letter of
Credit issued by the Issuer shall not be deemed to be a Facility
Letter of Credit for purposes of this Section 2.2.5 if the Issuer
shall have received written notice from any Revolving Credit
Lender on or before one Business Day prior to the date of its
issuance of such Letter of Credit that one or more of the
conditions contained in Section 4.2 is not then satisfied, and,
in the event the Issuer receives such a notice, it shall have no
further obligation to issue any Letter of Credit until such
notice is withdrawn by that Revolving Credit Lender or such
condition has been effectively waived in accordance with the
provisions of this Agreement.
(2) In the event that the Issuer makes any payment under any Facility
Letter of Credit and the Borrower shall not have repaid such
amount to the Issuer pursuant to Section 2.2.4, the Issuer shall
promptly notify each Revolving Credit Lender of such failure, and
each Revolving Credit Lender shall promptly and unconditionally
pay to the Administrative Agent for the account of the Issuer the
amount of such Revolving Credit Lender's Pro Rata Share of the
unreimbursed amount of any such payment. If any Revolving Credit
Lender fails to make available to the
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Issuer, any amounts due to the Issuer pursuant to this Section
2.2.5(b), the Issuer shall be entitled to recover such amount,
together with interest thereon at the Federal Funds Effective
Rate, for the first three Business Days after such Revolving
Credit Lender receives such notice and thereafter, at the
Floating Rate, payable (i) on demand, (ii) by setoff against any
payments made to the Issuer for the account of such Revolving
Credit Lender or (iii) by payment to the Issuer by the
Administrative Agent of amounts otherwise payable to such
Revolving Credit Lender under this Agreement. The failure of any
Revolving Credit Lender to make available to the Administrative
Agent its Pro Rata Share of the unreimbursed amount of any such
payment shall not relieve any other Revolving Credit Lender of
its obligation hereunder to make available to the Administrative
Agent its Pro Rata Share of the unreimbursed amount of any
payment on the date such payment is to be made, but no Revolving
Credit Lender shall be responsible for the failure of any other
Revolving Credit Lender to make available to the Administrative
Agent its Pro Rata Share of the unreimbursed amount of any
payment on the date such payment is to be made.
(3) Whenever the Issuer receives a payment on account of a
Reimbursement Obligation, including any interest thereon, it
shall promptly pay to each Revolving Credit Lender which has
funded its participating interest therein, in immediately
available funds, an amount equal to such Revolving Credit
Lender's Pro Rata Share thereof.
(4) The obligations of a Revolving Credit Lender to make payments to
the Administrative Agent with respect to a Facility Letter of
Credit shall be absolute, unconditional and irrevocable, not
subject to any counterclaim, setoff, qualification or exception
whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances.
(5) In the event any payment by the Borrower or any Subsidiary
received by the Administrative Agent with respect to a Facility
Letter of Credit and distributed by the Administrative Agent to
the Revolving Credit Lenders on account of their participations
is thereafter set aside, avoided or recovered from the
Administrative Agent in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each
Revolving Credit Lender which received such distribution shall,
upon demand by the Administrative Agent, contribute such
Revolving Credit Lender's Pro Rata Share of the amount set aside,
avoided or recovered together with interest at the rate required
to be paid by the Administrative Agent upon the amount required
to be repaid by it.
vi. Compensation for Facility Letters of Credit.
(1) The Issuer shall have the right to receive from the Borrower,
solely for the Issuer's own account, an issuance fee of 0.25% per
annum on the average daily undrawn amount under each Facility
Letter of Credit
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issued by it as well as the Issuer's reasonable and customary
costs of issuing and servicing the Facility Letters of Credit.
(2) The Borrower shall pay to the Administrative Agent, for the
benefit of the Revolving Credit Lenders, a fee computed at the
Applicable Margin calculated on the maximum amount available to
be drawn from time to time under each Facility Letter or Credit,
which fee shall be paid annually in advance at the time each
Facility Letter of Credit is issued for the period from and
including the date of issuance thereof to and including the
stated expiry date thereof.
vii. Letter of Credit Collateral Account. The Borrower hereby agrees that
it will, until the final expiration date of any Facility Letter of
Credit and thereafter as long as any amount is payable to the Lenders
in respect of any Facility Letter of Credit, maintain a special
collateral account (the "Letter of Credit Collateral Account") at the
Administrative Agent's office at the address specified pursuant to
Article XIII, in the name of the Borrower but under the sole dominion
and control of the Administrative Agent, for the benefit of the
Lenders and in which the Borrower shall have no interest other than as
set forth in Section 8.1. The Borrower is not required by this Section
2.2.7 to deposit any funds in the Letter of Credit Collateral Account,
and the obligation to make deposits into the Letter of Credit
Collateral Account are described in Section 8.1. The Administrative
Agent will invest any funds on deposit from time to time in the Letter
of Credit Collateral Account in certificates of deposit of the
Administrative Agent having a maturity not exceeding 30 days. Nothing
in this Section 2.2.7 shall either obligate the Administrative Agent
to require the Borrower to deposit any funds in the Letter of Credit
Collateral Account or limit the right of the Administrative Agent to
release any funds held in the Letter of Credit Collateral Account
other than as required by Section 8.1.
viii. Nature of Obligations. As among the Borrower, the Issuer and the
Lenders, the Borrower assumes all risks of the acts and omissions of,
or misuse of the Facility Letters of Credit by, the respective
beneficiaries of the Facility Letters of Credit. In furtherance and
not in limitation of the foregoing, the Issuer and the Lenders shall
not be responsible for (i) the forms, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Facility
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Facility Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of a Facility Letter of
Credit to comply fully with conditions required in order to draw upon
such Facility Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise; (v) errors in interpretation of
technical terms; (vi) misapplication by the beneficiary of a Facility
Letter of Credit of the proceeds of any drawing under such Facility
Letter of Credit; (vii)
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any consequences arising from causes beyond the control of the
Issuer or the Lenders. In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any
action taken or omitted by the Issuer or any Lender under or in
connection with the Facility Letters of Credit or any related
certificates, if taken or omitted in good faith, shall not put
the Issuer or such Lender under any resulting liability to the
Borrower or relieve the Borrower of any of its obligations
hereunder to the Issuer, the Administrative Agent or any Lender.
Notwithstanding anything to the contrary contained in this
Section 2.2, the Borrower shall not have any obligation to
indemnify an Issuer under this Section 2.2 in respect of any
liability incurred by such Issuer arising primarily out of the
gross negligence or willful misconduct of such Issuer, as
determined by a court of competent jurisdiction.
c. Term Loan A. Subject to the terms and conditions hereof, each Term
Loan A Lender, severally and for itself alone, agrees to make an
Advance of Term Loan A to the Borrower in Dollars, in a single
disbursement on the Effective Date, in an aggregate amount not to
exceed such Lender's Term Loan A Commitment. Term Loan A, or any
portion thereof at the Borrower's option, may be Floating Rate Loans
or Eurodollar Loans, or a combination thereof subject to the terms
hereof, with the initial selection by the Borrower in accordance with
procedures acceptable to the Administrative Agent and any subsequent
selections in accordance with Sections 2.10 or 2.11.
d. Term Loan B. Subject to the terms and conditions hereof, each Term
Loan B Lender, severally and for itself alone, agrees to make an
Advance of Term Loan B to the Borrower in a single disbursement on the
Effective Date, in Dollars in an aggregate amount not to exceed such
Lender's Term Loan B Commitment. Term Loan B or any portion thereof at
the Borrower's option, may be Floating Rate Loans or Eurodollar Loans,
or any combination thereof in accordance with the terms hereof, with
the initial selection by the Borrower in accordance with procedures
acceptable to the Administrative Agent and any subsequent selections
in accordance with Sections 2.10 or 2.11.
e. Interim Term Loan. Subject to the terms and conditions hereof, each
Interim Term Loan Lender, severally and for itself alone, agrees to
make an Advance of the Interim Term Loan to the Borrower in a single
disbursement on the Effective Date, in Dollars in an aggregate amount
not to exceed such Lender's Interim Term Loan Commitment. The Interim
Term Loan or any portion thereof at the Borrower's option, may be
Floating Rate Loans or Eurodollar Loans, or any combination thereof in
accordance with the terms hereof, with the initial selection by the
Borrower in accordance with procedures acceptable to the
Administrative Agent and any subsequent selections in accordance with
Sections 2.10 or 2.11.
f. Ratable Loans. (a) Subject to Section 2.6(b), each Dollar Revolving
Credit Advance hereunder shall consist of Dollar Revolving Credit
Loans made from the several Revolving Credit Lenders ratably in
proportion to the ratio that their respective Dollar Revolving Credit
Commitments bear to the Aggregate Dollar Revolving Credit Commitment.
Each Multicurrency Revolving Credit Advance hereunder shall consist of
Multicurrency Revolving Credit Loans made from the several
Multicurrency Revolving Credit Lenders ratably in proportion to the
ratio that their respective Multicurrency
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Revolving Credit Commitments bear to the Aggregate Multicurrency
Revolving Credit Commitment. Each Term Loan A Advance hereunder shall
consist of Term Loan A Loans made from the several Term Loan A Lenders
ratably in proportion to the ratio that their respective Term Loan A
Commitments bear to the Aggregate Term Loan A Commitments. Each Term
Loan B Advance hereunder shall consist of Term Loans B made from the
several Term Loan B Lenders ratably in proportion to the ratio that
their respective Term Loan B Commitments bear to the Aggregate Term
Loan B Commitments.
(b) If on any Borrowing Date on which the Borrower has requested
Multicurrency Revolving Credit Loans (the "Requested Multicurrency Loans"), (i)
the Dollar Equivalent of the aggregate principal amount of the Requested
Multicurrency Revolving Credit Loans exceeds the Aggregate Available
Multicurrency Revolving Credit Commitments on such Borrowing Date (before giving
effect to the making and payment of any Loans required to be made pursuant to
this clause (b) on such Borrowing Date) and (ii) the Dollar Equivalent of the
amount of such excess is less than or equal to the Aggregate Available Revolving
Credit Commitments of all Multicurrency Revolving Credit Lenders (before giving
effect to the making and payment of any Loans pursuant to this clause (b) on
such Borrowing Date), each Dollar Revolving Credit Lender shall make a Dollar
Revolving Credit Loan to the Company on such Borrowing Date, and the proceeds of
such Loans shall be simultaneously applied to repay outstanding Dollar Revolving
Credit Loans of the Multicurrency Revolving Credit Lenders, in amounts such
that, after giving effect to (1) such borrowings and repayments and (2) the
borrowing from the Multicurrency Revolving Credit Lenders of the Requested
Multicurrency Loans, the Aggregate Revolving Credit Outstandings of each Lender
will equal (as nearly as possible) its Pro Rata Share. To effect such borrowings
and repayments, (x) not later than 11:00 A.M., Detroit time, on such Borrowing
Date, the proceeds of such Dollar Revolving Credit Loans shall be made available
by each Dollar Revolving Credit Lender to the Administrative Agent at its
applicable Lending Installation in immediately available funds and the
Administrative Agent shall apply the proceeds of such Dollar Revolving Credit
Loans toward repayment of outstanding Dollar Revolving Credit Loans of the
Multicurrency Revolving Credit Lenders and (y) concurrently with the repayment
of such outstanding Dollar Revolving Credit Loans of such Multicurrency
Revolving Credit Lender on such Borrowing Date, (1) such Multicurrency Revolving
Credit Lenders shall, in accordance with the applicable provisions hereof, make
the Requested Multicurrency Loans in an aggregate amount equal to the amount so
requested (but not in any event greater than the amount allowed under Section
2.1(c)) after giving effect to the making of such repayment of any Loans on such
Borrowing Date and (2) the Borrower shall pay to the Administrative Agent for
the account of the Lenders whose Loans to such Borrower are paid on such
Borrowing Date pursuant to this clause (b) all interest accrued on the amounts
repaid to the date of such repayment, together with any amounts payable pursuant
to Section 3.4 in connection with such repayment. If any borrowing of Dollar
Revolving Credit Loans is required pursuant to this clause (b), the Borrower
shall notify the Administrative Agent in the manner provided for Dollar
Revolving Credit Loans in Section 2.10.
g. Revolving Credit Commitment Fee; Reductions in Aggregate Revolving
Credit Commitment. The Borrower agrees to pay to the Administrative
Agent for the account of each Revolving Credit Lender a commitment fee
at the Applicable Margin on the daily unborrowed portion of such
Lender's Revolving Credit Commitment from the date
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hereof to and including the Termination Date, payable on each Payment
Date hereafter and on the Termination Date. For purposes of computing
the commitment fee payable hereunder, Swing Loans shall not be
considered usage of a Lender's Revolving Credit Commitment until such
time as such Lender shall be required to fund its Pro Rata Share of
such Swing Loans pursuant to Section 2.1(d)(iii). The Borrower may
permanently reduce the Aggregate Revolving Credit Commitment in whole,
or in part ratably among the Revolving Credit Lenders in amounts of
not less than $5,000,000 and integral multiples of $1,000,000
thereafter, upon at least five Business Days' written notice to the
Administrative Agent, which notice shall specify the amount of any
such reduction, provided, however, that the amount of the Aggregate
Revolving Credit Commitment may not be reduced below the aggregate
principal amount of the outstanding Revolving Credit Loans, Swing
Loans and Facility Letters of Credit.
h. Types of Advances; Minimum Amount of Each Advance. Advances
denominated in Dollars may be Floating Rate Advances or Eurodollar
Advances and Advances denominated in Eurocurrencies may be
Eurocurrency Advances, or a combination thereof, selected by the
Borrower in accordance with Sections 2.10 and 2.11 Each Eurodollar
Advance shall be in the minimum amount of $5,000,000 (and in multiples
of $1,000,000 if in excess thereof), and each Floating Rate Advance
shall be in the minimum amount of $5,000,000 (and in multiples of
$1,000,000 if in excess thereof), provided, however, that any Floating
Rate Advance may be in the amount of the unused Aggregate Revolving
Credit Commitment. Each Eurocurrency Advance shall be in the minimum
Dollar Equivalent of $5,000,000 (and in multiples of $1,000,000 if in
excess thereof or such other lesser multiple as the Administrative
Agent deems appropriate)
i. Principal Payments.
i. Revolving Credit Advances. Unless earlier payment is required
under this Agreement, the Borrower shall pay to the Revolving
Credit Lenders on the Termination Date the entire outstanding
principal amount of the Revolving Credit Loans and Facility
Letters of Credit outstanding to it. If the Revolving Credit
Loans and Facility Letters of Credit at any time exceed the
amount allowed pursuant to Section 2.1(c), the Borrower shall
prepay the Revolving Credit Loans and Facility Letters of Credit
by an amount equal to or greater than such excess.
ii. Term Loan A. The Borrower hereby unconditionally promises to pay
to the Administrative Agent for the pro rata account of each Term
Loan A Lender in Dollars the unpaid principal amount of each Term
Loan A of such Lender in twenty quarterly principal payments as
follows:
<TABLE>
<CAPTION>
Payment Date Principal Installment
- ------------ ---------------------
<S> <C>
September 30, 1999 $700,000
</TABLE>
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<PAGE> 43
<TABLE>
<CAPTION>
Payment Date Principal Installment
- ------------ ---------------------
<S> <C>
December 31, 1999 $700,000
March 31, 2000 $700,000
June 30, 2000 $700,000
September 30, 2000 $4,500,000
December 31, 2000 $4,500,000
March 31, 2001 $4,500,000
June 30, 2001 $4,500,000
September 30, 2001 $5,500,000
December 31, 2001 $5,500,000
March 31, 2002 $5,500,000
June 30, 2002 $5,500,000
September 30, 2002 $6,500,000
December 31, 2002 $6,500,000
March 31, 2003 $6,500,000
June 30, 2003 $6,500,000
September 30, 2003 $7,800,000
</TABLE>
43
<PAGE> 44
<TABLE>
<CAPTION>
Payment Date Principal Installment
- ------------ ---------------------
<S> <C>
December 31, 2003 $7,800,000
March 31, 2004 $7,800,000
May 27, 2004 $7,800,000
</TABLE>
On the Term Loan A Maturity Date each Term Loan A shall be paid in full.
iii. Term Loan B. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the pro
rata account of each Term Loan B Lender in Dollars the
unpaid principal amount of Term Loan B of such Lender
in twenty-three quarterly principal payments on the
last day of each calendar quarter and at the Term Loan
B Maturity Date as follows:
<TABLE>
<CAPTION>
Payment Dates Principal Installment
- ------------- ---------------------
<S> <C>
September 30, 1999-June 30, 2004 $375,000
September 30, 2004 $7,800,000
December 31, 2004 $7,800,000
April 1, 2005 $126,900,000
</TABLE>
On the Term Loan B Maturity Date, Term Loan B shall be paid in full.
iv. Interim Term Loan. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the pro
rata account of each Interim Term Loan Lender in
Dollars the unpaid principal amount of the Interim Term
Loan of such Lender in full on the Interim Term Loan
Maturity Date.
j. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and,
in the case of each Eurodollar Advance and Eurocurrency
Advance, the Interest Period applicable to each Advance from
time to time, provided, however, that unless the
Administrative Agent in its sole discretion shall have
consented, the Borrower may not select an Interest Period of
longer than 7 days until the first to occur of (a) the date
90 days after the Effective Date, and (b) the date the
Administrative Agent shall have determined that the
syndication of the Commitments
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<PAGE> 45
under this Agreement is complete. The Borrower shall give
the Administrative Agent irrevocable notice (a "Borrowing
Notice") not later than noon (Detroit time) at least one
Business Day before the Borrowing Date of each Floating Rate
Advance, three Business Days before the Borrowing Date for
each Eurodollar Advance, and four Business Days before the
Borrowing Date for each Eurocurrency Advance (which in each
case the Agent will promptly forward to the appropriate
Lenders), specifying:
(a) the Borrowing Date, which shall be a Business
Day, of such Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected,
(d) in the case of each Eurodollar Advance or
Eurocurrency Advance, the Interest Period
applicable thereto,
(e) in the case of each Eurocurrency Advance, the
Eurocurrency of such Advance; and
(f) payment and wiring instructions.
Not later than 2:00 p.m. (Detroit time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Detroit to the Administrative Agent at its address specified pursuant to Article
XIII, provided, however, that in the case of Eurocurrency Loans, each Lender
shall make available its Loan not later than noon, local time, at the
Administrative Agent's Lending Installation for such currency, in such funds as
may then becustomary for the settlement of international transactions in such
currency in the city of and at the address of the Administrative Agent's Lending
Installation for such currency. Unless the Administrative Agent determines that
any applicable condition specified in Article IV has not been satisfied, the
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the Administrative Agent's aforesaid address.
k. Conversion and Continuation of Outstanding Advances.
Floating Rate Advances shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are
converted into Eurodollar Advances. Each Eurodollar and
Eurocurrency Advance shall continue as a Eurodollar or
Eurocurrency Advance until the end of the then applicable
Interest Period therefor, at which time such Advance shall
be automatically converted into a Floating Rate Advance in
the case of Eurodollar Advances and converted to a
Eurocurrency Advance in the same currency and with an
Interest Period of one month in the case of Eurocurrency
Advances, unless the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice
requesting that, at the end of such Interest Period, such
Eurodollar or Eurocurrency Advance either continue as a
Eurodollar Advance for the same or another Interest Period
or be converted into an Advance of another Type. Subject to
the terms of Sections 2.8 and 2.10, the Borrower may elect
from time to time to convert all or any part of anAdvance of
any Type into any other Type or Types of Advances; provided
that any conversion of any Eurodollar and Eurocurrency
Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto. The Borrower shall give
the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an
Advance or continuation of a Eurodollar and Eurocurrency
Advance not later than noon (Detroit time) at least one
Business Day, in the case of a conversion into a Floating
Rate Advance, three Business Days, in the case of a
conversion into or continuation of a
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<PAGE> 46
Eurodollar Advance, or four Business Days, in the case of a
conversion into or continuation of a Eurocurrency Advance,
prior to the date of the requested conversion or
continuation, specifying:
(a) the requested date which shall be a Business
Day, of such conversion or continuation,
(b) the aggregate amount and Type of the Advance
which is to be converted or continued, and
(c) the amount and Type(s) of Advance(s) into
which such Advance is to be converted or
continued and, in the case of a conversion
into or continuation of a Eurodollar Advance,
the duration of the Interest Period
applicable thereto.
l. Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such
Advance is made or is converted from a Eurodollar Advance
into a Floating Rate Advance pursuant to Section 2.11 to but
excluding the date it becomes due or is converted into a
Eurodollar Advance pursuant to Section 2.11 hereof, at a
rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any
Advance maintained as a Floating Rate Advance will take
effect simultaneously with each change in the Alternate Base
Rate. Each Eurodollar and Eurocurrency Advance shall bear
interest on the outstanding principal amount thereof from
and including the first day of the Interest Period
applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as
applicable to such Eurodollar or Eurocurrency Advance. No
Interest Period (a) with respect to any Revolving Credit
Loan may end after the Termination Date, (b) with respect to
any Term Loan A may end after the Term Loan A Maturity Date,
and (c) with respect to any Term Loan B may end after the
Term Loan B Maturity Date. Additionally, the Borrower shall
select Interest Periods with respect to the Term Loans to
avoid breaking any Interest Period with respect to any
principal installment due on the Term Loans.
m. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.10 or 2.11, during the
continuance of a Default or Unmatured Default the Required
Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in
interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar or Eurocurrency
Advance. During the continuance of a Default the Required
Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in
interest rates), declare that each Advance (including each
Multicurrency Advance) shall bear interest at the Overdue
Rate, provided that each Advance (including each
Multicurrency Advance) shall automatically bear interest at
the Overdue Rate in connection with any Default pursuant to
Section 7.6 or 7.7.
n. Method of Payment. (i) All payments of the Obligations
hereunder shall be made, without setoff, deduction, or
counterclaim, in Same Day Funds to the Administrative Agent
at the Administrative Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the
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<PAGE> 47
Administrative Agent to the Borrower, by 11:00 a.m. (local
time) on the date when due and shall be applied ratably by
the Administrative Agent among the Lenders. All payments to
be made by the Borrower hereunder in any currency other than
Dollars shall be made in such currency on the date due in
Same Day Funds for the account of the Administrative Agent,
at its Lending Installation for such currency and shall be
applied ratably by the Administrative Agent among the
Lenders. Each payment delivered to the Administrative Agent
for the account of any Lender shall be delivered promptly by
the Administrative Agent to such Lender in the same type of
funds that the Administrative Agent received at its address
specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the
Administrative Agent from such Lender. The Administrative
Agent is hereby authorized to charge the account of the
Borrower maintained with the Administrative Agent or any of
its Affiliates for each payment of principal, interest and
fees as it becomes due hereunder.
(ii) Notwithstanding the foregoing provisions of this Section, if, after
the making of any Advance in any currency other than Dollars, currency control
or exchange regulations are imposed in the country which issues such currency
with the result that the type of currency in which the Advance was made (the
"Original Currency") no longer exists or the Borrower is not able to make
payment to the Administrative Agent for the account of the Lenders in such
currency, then all payments to be made by the Borrower hereunder in such
currency shall instead be made when due in Dollars in an amount equal to the
Dollar Equivalent (as of the date of repayment) of such payment due, it being
the intention of the parties hereto that the Borrower take all risks of the
imposition of any such currency control or exchange regulations.
o. Noteless Agreement; Recordation; Telephonic Notices. (i)
Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness
of the Borrower to such Lender resulting from each Loan made
by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which it will
record (a) the amount of each Loan made hereunder, the Type thereof and the
Interest Period and currency with respect thereto, (b) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (c) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(iii) The entries maintained in the accounts maintained pursuant to paragraphs
(i) and (ii) above shall be prima facie evidence of the existence and amounts of
the Obligations therein recorded; provided, however, that the failure of the
Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by the appropriate
Note(s). In such event, the Borrower shall prepare, execute and deliver to such
Lender Note(s) payable to the order of such Lender in a form supplied by the
Administrative Agent. Thereafter, the Loans evidenced by such Note(s) and
interest thereon shall at all times (including after any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee
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<PAGE> 48
pursuant to Section 12.3, except to the extent that any such Lender or assignee
subsequently returns any such Note(s) for cancellation and requests that such
Loans once again be evidenced as described in paragraphs (i) and (ii) above.
Each Lender is hereby authorized to record the principal amount of each of its
Loans and each repayment on the schedule attached to its Note(s), provided,
however, that neither the failure to so record nor any error in such recordation
shall affect the Borrower's obligations under such Note(s).
(v) The Borrower hereby authorizes the Lenders and the Administrative Agent to
extend, convert or continue Advances, effect selections of Types of Advances and
to transfer funds based on telephonic or facsimile notices made by any person or
persons the Administrative Agent or any Lender in good faith believes to be an
Authorized Officer or authorized to act on behalf of an Authorized Officer. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, if such confirmation is requested by the Administrative Agent or
any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.
p. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
Floating Rate Advance shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof, on any date on which the
Floating Rate Advance is prepaid, whether due to acceleration or otherwise, and
at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance and Eurocurrency Advance shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Advance or Eurocurrency Advance is prepaid, whether by acceleration
or otherwise, and at maturity. Interest accrued on each Eurodollar Advance and
Eurocurrency Advance having an Interest Period longer than three months shall
also be payable on the last day of each three-month interval during such
Interest Period. Interest and commitment fees shall be calculated for actual
days elapsed on the basis of a 360-day year, except that interest on any Loan
denominated in British Pounds Sterling shall be calculated for actual days
elapsed on the basis of a 365 day-year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
q. Notification of Advances, Interest Rates, Prepayments and Revolving Credit
Commitment Reductions. Promptly after receipt thereof, the Administrative Agent
will notify each Lender of the contents of each Aggregate Revolving Credit
Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice,
and repayment notice received by it hereunder. The Administrative Agent will
notify each Lender of the interest rate applicable to each Eurodollar and
Eurocurrency Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Alternate Base Rate.
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<PAGE> 49
r. Lending Installations. Subject to the terms of this Agreement, each Lender
may book its Loans at any Lending Installation selected by such Lender and may
change its Lending Installation from time to time. All terms of this Agreement
shall apply to any such Lending Installation and the Notes and Loans shall be
deemed held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written or telex notice to the Administrative Agent and the
Borrower, designate a Lending Installation through which Loans will be made by
it and for whose account Loan payments are to be made.
s. NonReceipt of Funds by the Administrative Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Administrative Agent prior to the date
on which it is scheduled to make payment to the Administrative Agent of (i) in
the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for the first five such days and at the interest
rate applicable to the relevant Loan for each such day thereafter, or (ii) in
the case of payment by the Borrower, the interest rate applicable to the
relevant Loan for each such day.
t. Market Disruption. Notwithstanding the satisfaction of all conditions
referred to in Article II and Article IV with respect to any Advance in any
Eurocurrency, if there shall occur on or prior to the date of such Advance any
change in national or international financial, political or economic conditions
or currency exchange rates or exchange controls which would in the reasonable
opinion of the Administrative Agent or the Required Multicurrency Revolving
Credit Lenders make it impracticable for the Eurocurrency Loans comprising such
Advance to be denominated in the Eurocurrency specified by the Borrower, then
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Lenders, and such Loans shall not be denominated in such Eurocurrency but
shall be made on such Borrowing Date in Dollars, in an aggregate principal
amount equal to the Dollar Equivalent of the aggregate principal amount
specified in the related Borrowing Notice as Floating Rate Loans, unless the
relevant Borrower notifies the Administrative Agent at least two Business Days
before such date that (i) it elects not to borrow on such date or (ii) it elects
to borrow on such date in a different Eurocurrency, as the case may be, in which
the denomination of such Loans would in the opinion of the Administrative Agent
and the Required Multicurrency Revolving Credit Lenders be practicable and in an
aggregate principal amount equal to the Dollar Equivalent of the aggregate
principal amount specified in the related Borrowing Notice.
u. Judgment Currency. If for the purposes of obtaining judgment in any court
it is necessary to convert a sum due from the Borrower hereunder in the currency
expressed to be payable herein (the "specified 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 specified
currency with such other currency at
49
<PAGE> 50
the Administrative Agent's main office on the Business Day preceding that on
which final, non-appealable judgment is given. The obligations of the Borrower
in respect of any sum due to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than the specified
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 such other currency such Lender or the
Administrative Agent (as the case may be) may in accordance with normal,
reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the
sum originally due on the judgment to such Lender or the Administrative Agent,
as the case may be, in the specified currency, the Borrower agrees, to the
fullest extent that they may effectively do so, 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 specified currency so purchased exceeds (a) the sum originally due on the
judgment to any Lender or the Administrative Agent, as the case may be, in the
specified currency and (b) any amounts shared with other Lenders as a result of
allocations of such excess as a disproportionate payment to such Lender under
Section 11.2, such Lender or the Administrative Agent, as the case may be,
agrees to remit such excess to the relevant Borrower.
v. Optional Prepayments. The Borrower may at any time and from time to time
prepay Floating Rate Loans, in whole or in part, without penalty or premium,
upon at least one Business Day's irrevocable notice to the Administrative Agent,
specifying the date and amount of prepayment. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein. Partial prepayment of Floating Rate Loans shall be in a minimum
aggregate amount of $2,500,000 or any integral multiple of $1,000,000 in excess
thereof.
i. The Borrower may at any time and from time to time prepay, without premium
or penalty (but together with payment of any amount payable pursuant to Section
3.4), its Eurodollar Loans and its Multicurrency Loans in whole or in part, upon
at least three Business Days' irrevocable notice to the Administrative Agent
specifying the date and amount of prepayment. Partial payments of Eurodollar
Loans shall be in a minimum aggregate amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof. Partial prepayments of Multicurrency
Loans shall be in an aggregate principal amount in the relevant Eurocurrency of
5,000,000 units or any integral multiple of 1,000,000 units in excess thereof,
or such lesser principal amount as may equal the outstanding Multicurrency Loans
or such lesser amount as may be agreed to by the Administrative Agent.
ii. Each prepayment pursuant to this Section 2.22 and each conversion pursuant
to Section 2.11 shall be accompanied by accrued and unpaid interest on the
amount prepaid to the date of prepayment and any amounts payable under Section
3.4 in connection with such payment.
iii. Prepayments pursuant to this Section 2.22 shall be applied as the Borrower
may direct, provided that all prepayments of the Term Loans, will be applied to
the maturities thereof in inverse order and prepayments of Term Loan B shall be
subject to Section 2.23.3.
w. Mandatory Prepayments.
i. Within 30 Business Days prior to the consummation of any transaction which
would cause a Change in Control, the Borrower shall notify (a "Change in Control
Notice") the Administrative Agent and each
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<PAGE> 51
Lender of such expected transaction, including as to such Change in Control
Notice the expected closing date of such transaction. Within 15 Business Days of
receipt of such Change in Control Notice by any Lender, such Lender may, at its
option, give notice to the Administrative Agent and the Borrower that such
Lender elects to terminate its Commitments hereunder. Unless an earlier date is
otherwise agreed upon between the Borrower, the Administrative Agent and the
terminating Lender, such Lender's Commitments shall terminate simultaneously
with the closing of such transaction and the Borrower shall repay at such time
all Obligations owing to such Lender, together with accrued interest thereon,
any accrued fees with respect to such Lender's Revolving Credit Commitment, any
costs, losses or expenses incurred by such Lender in connection with such
prepayment payable by the Borrower pursuant to Section 3.4 and any other
obligations of the Borrower to such Lender hereunder.
ii. In addition to all payments of the Term Loans required hereunder, the
Borrower shall prepay the Term Loans by an amount equal to:
(1) 100% of the Net Cash Proceeds after the Effective Date of any capital
contribution to the Borrower (other than a capital contribution by the
Principal) or issuance of any Capital Stock of the Borrower or any of its
Subsidiaries (excluding the issuance of any Capital Stock of any Subsidiaries to
the Borrower or to a Wholly Owned Subsidiary);
(2) 100% of the Net Cash Proceeds of the issuance of any Indebtedness for
borrowed money, asset securitizations or similar obligations incurred at any
time after the Effective Date, other than Indebtedness permitted by Section
6.11(i)-(vi) or (viii);
(3) 100% of the Net Cash Proceeds from any Asset Sale in excess of
$10,000,000 in aggregate amount in any fiscal year of the Borrower (excluding
the Net Cash Proceeds from any Asset Sale permitted by Section 6.13(i), (iii),
(iv), (v) or (vi) and other than such Net Cash Proceeds from the sale of fixed
assets to the extent permitted by Section 6.13(ii) which are used within 360
days of the date received for the purposes allowed by Section 6.13(ii), and
provided that if, but only if, any cash proceeds are received pursuant to any
condemnation award or casualty insurance in connection with any loss or damage
to any Property which are not used to repair or replace such Property within 360
days, they shall be considered Net Cash Proceeds from an Asset Sale) which
payments shall be due (subject to the terms of the following sentence) 20 days
after the end of each month for all such sales and other dispositions during
such month. The Borrower shall provide a certificate to the Administrative Agent
within 20 days after each sale of assets which, but for the above parenthetical
as to Section 6.13(ii), would cause a prepayment under this Section 2.23.2(c),
which certificate shall describe such sale of assets and estimate when such Net
Cash Proceeds will be used to purchase assets of a comparable value, and if such
Net Cash Proceeds are not used within 360 days after such sale or such earlier
date when the Borrower has determined not to purchase assets of comparable value
with such Net Cash Proceeds, the Borrower will then prepay the Loans with such
Net Cash Proceeds; and
(4) 75% of Excess Cash Flow for any fiscal year ending after December 31,
1999, in which the ratio of Total Debt to EBITDA was 3.0 to 1.0 or higher.
iii. The Borrower shall give the Administrative Agent at least ten Business
Days' notice of each prepayment that the Borrower expects to make on Term Loan
B, in each case specifying the amount of such prepayment and a brief description
of the event or events which cause such prepayment to be made.
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<PAGE> 52
(i) At least five Business Days before the date (an "Unscheduled
Prepayment Date") on which any prepayment of the Term Loan B (a "Term Loan B
Unscheduled Prepayment") would, but for the provisions of this subsection (i),
become payable hereunder, the Borrower shall deliver a notice conforming to the
requirements of paragraph (ii) below (a "Term Loan B Prepayment Notice") to the
Administrative Agent and on or before such Unscheduled Prepayment Date, the
Borrower shall deposit in a cash collateral account with the Administrative
Agent an amount equal to such Term Loan B Unscheduled Prepayment (together with
interest accrued thereon to but excluding the Deferred Term Loan B Prepayment
Date specified in such Term Loan B Prepayment Notice). Such Term Loan B
Unscheduled Prepayment shall not be made on such Unscheduled Payment Date but
shall instead be deferred as provided in this subsection (i). Upon receipt of
any Term Loan B Prepayment Notice, the Administrative Agent shall promptly
notify each Term Loan B Lender of the contents hereof.
(ii) Each Term Loan B Prepayment Notice shall (w) set forth the amount
of the relevant Term Loan B Unscheduled Prepayment and the portion thereof that
each Term Loan B Lender will be entitled to receive if it accepts prepayment of
its Term Loan B Loans in accordance with this subsection, (x) contain an offer
to prepay on a specified date (a "Deferred Term Loan B Prepayment Date"), which
shall not be less than 10 days or more than 25 days after the date of such Term
Loan B Prepayment Notice, the Term Loan B Loans of such Term Loan B Lender by an
aggregate principal amount equal to such Term Loan B Lender's share of such Term
Loan B Unscheduled Prepayment, (y) request such Term Loan B Lender to notify the
Borrower and the Administrative Agent in writing, no later than the fifth
Business Day before the Deferred Term Loan B Prepayment Date, of such Term Loan
B Lender's acceptance or rejection (in each case, in whole and not in part) of
such offer of prepayment and (z) inform such Term Loan B Lender that, if it
fails to reject such offer in writing on or before the fifth Business Day before
such Deferred Term Loan B Prepayment Date, it shall be deemed to accept such
offer. Each Term Loan B Prepayment Notice shall be given by facsimile and
confirmed by hand delivery or overnight courier service, in each case addressed
to the Administrative Agent and each Term Loan B Lender as provided herein.
(iii) On each Deferred Term Loan B Prepayment Date, the Administrative
Agent shall withdraw from such cash collateral account the amount deposited
therein with respect to the relevant Term Loan B Unscheduled Prepayment (and any
interest earned thereon) and shall apply such amount as follows:
(x) to prepay a portion of the principal of the Term Loan B Loans of
each Term Loan B Lender that shall have accepted (or be deemed to have
accepted) such prepayment in accordance with the related Term Loan B
Prepayment Notice (an "Accepting Term Loan B Lender") equal to the portion
of the relevant Term Loan B Unscheduled Prepayment initially allocated to
such Accepting Term Loan B Lender;
(y) to prepay a portion of the principal of the Term Loan A and the
Term Loan B Loans of the Accepting Term Loan B Lenders, ratably in
proportion to the then outstanding principal amounts thereof, in an
aggregate amount equal to the portion of the relevant Term Loan B
Unscheduled Prepayment initially allocated to the Term Loan B Lenders that
rejected such prepayment; and
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(z) to pay interest accrued on the principal amounts so prepaid to the
date of prepayment in the case of optional prepayments.
If the amount withdrawn from such cash collateral account is not sufficient to
make the foregoing payments, the Borrower shall pay to the Administrative Agent
on such Deferred Term Loan B Prepayment Date an amount equal to the shortfall.
Notwithstanding anything herein to the contrary, if Term Loan A is paid in full,
the Term Loan B Lenders may not refuse a prepayment on Term Loan B.
iv. Notwithstanding anything herein to the contrary, each
mandatory prepayment of the Term Loans pursuant to
Section 2.23.2 shall be applied first to the Interim
Term Loan. After payment in full of the Interim Term
Loan, each mandatory prepayment under Section 2.23.2
shall be applied ratably to Term Loan A and Term Loan B
and applied to the outstanding principal installments
thereof ratably, subject to Section 2.23.3.
x. Prepayment Premium; Sublimits. In the event that the
Borrower makes any prepayment of Term Loan B at any time on
or prior to the date one year after the Effective Date the
Borrower shall pay to each Term Loan B Lender a prepayment
premium equal to 1.00% of the amount prepaid to such Lender.
The Borrower agrees that the amounts payable pursuant to
this Section are a reasonable preestimate of loss and not a
penalty. Such amounts are payable as liquidated damages for
the loss of bargain and payment of such amounts shall not in
any way reduce, affect or impair any other obligations of
the Borrower under this Agreement.
i. In addition to all other payments required hereunder,
as of the last Business Day of each month and as of the
date each Advance is made or continued or converted
hereunder, if the Dollar Equivalent of the Aggregate
Revolving Credit Outstandings of all Revolving Credit
Lenders exceeds the Aggregate Revolving Credit
Commitment, the Borrower shall prepay (or cash
collateralize in the case of Letters of Credit) the
Revolving Credit Advances, in such order as determined
by the Borrower, in an amount such that the Dollar
Equivalent of the Aggregate Revolving Credit
Outstandings of all Revolving Credit Lenders does not
exceed the Aggregate Revolving Credit Commitment as of
such date, together with all amounts owing to the
applicable Banks under Section 3.4.
ii. In addition to all other payments required hereunder,
as of the last Business Day of each month and as of the
date each Revolving Credit Advance is made or continued
or converted hereunder, if the Dollar Equivalent of all
Revolving Credit Advances denominated in Eurocurrencies
exceeds $75,000,000, the Borrower shall prepay the
Advances, in such order as determined by the Borrower,
in an amount equal to such excess as of such date,
together with all amounts owing to the applicable
Lenders under Section 3.4.
y. Multicurrency Participation. Immediately and automatically
upon the occurrence of a Default under Sections 7.2, 7.6 or
7.7, (A) each Dollar Revolving Credit Lender shall be
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deemed to have unconditionally and irrevocably purchased
from each Multicurrency Revolving Credit Lender, without
recourse or warranty, an undivided interest in and
participation in each Multicurrency Revolving Credit Loan
ratably in accordance with such Lender's Pro Rata Share, (B)
immediately and automatically all Multicurrency Revolving
Credit Loans shall be converted to and redenominated in
Dollars equal to the Dollar Equivalent of each such
Multicurrency Loan determined as of the date of such
conversion, (C) each Multicurrency Revolving Credit Lender
shall be deemed to have unconditionally and irrevocably
purchased from each Dollar Revolving Credit Lender, without
recourse or warranty, an undivided interest in and
participation in each Dollar Revolving Credit Loan ratably
in accordance with such Multicurrency Revolving Credit
Lender's Revolving Credit Commitment Percentage. Each of the
Dollar Revolving Credit Lenders shall pay to the applicable
Multicurrency Revolving Credit Lender not later than two (2)
Business Days following a request for payment from such
Lender, in Dollars, an amount equal to the undivided
interest in and participation in the Multicurrency Revolving
Credit Loan purchased by such Dollar Revolving Credit Lender
pursuant to this Section 2.25, and each of the Multicurrency
Revolving Credit Lenders shall pay to the applicable Dollar
Revolving Credit Lender not later than two (2) Business Days
following a request for payment from such Revolving Credit
Lender, in Dollars, an amount equal to the undivided
interest in and participation in the Dollar Revolving Credit
Loan purchased by such Multicurrency Revolving Credit Lender
pursuant to this Section 2.25, it being the intent of the
Revolving Credit Lenders that following such equalization
payments, each Revolving Credit Lender shall hold its Pro
Rata Share of the Aggregate Revolving Credit Outstandings.
z. Contribution Among Borrower and Guarantors. In order to
provide for just and equitable contribution among the
Borrower and the Guarantors, the Borrower and the Guarantors
shall execute a subrogation and contribution agreement
(which shall be deemed a Loan Document) in form and
substance satisfactory to the Required Lenders.
aa. Financial Condition of Borrower. Neither the Administrative
Agent nor any Lender shall have any obligation to the
Borrower or any Guarantor to disclose or discuss with such
Borrower or any Guarantor the Administrative Agent's or any
Lender's assessment of the financial condition of the
Borrower or any Guarantor, and the Borrower and each
Guarantor hereby waives any obligation of any Lender to
disclose any matter, fact or thing relating to the business,
operations or conditions of the Borrower or any Guarantor
now or hereafter known by the Administrative Agent or any
Lender. The Borrower and each Guarantor assumes the
responsibility for being and keeping informed of the
financial condition of each other Borrower and each
Guarantor and of all circumstances bearing upon the risk of
nonpayment of the Secured Obligations by any other Borrower.
No Lender shall have any obligation to the Borrower or any
Guarantor arising from any Lender's assessment of, or
failure to assess, the Borrower's or any Guarantor's
financial condition in connection with the granting of any
Loans or other extensions of credit hereunder.
bb. Collateral Security; Further Assistance.
(1) As security for the payment of the Obligations, the
Borrower shall cause to be granted to the
Administrative Agent, for the ratable benefit of the
Lenders, a Lien on and security interest in all of
the
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following, whether now or hereafter existing or
acquired: (i) all of the shares of Capital Stock
of each Subsidiary now or hereafter directly
owned by the Borrower or any Guarantor and all
proceeds thereof, all as more specifically
described in the Pledge Agreements; (ii) all
other Property now or hereafter owned by the
Borrower or any Domestic Subsidiary of the
Borrower; (iii) all other Property of each
Foreign Subsidiary which is a Guarantor to the
extent the obtaining of such collateral is
determined to be practical, cost effective and
not unduly burdensome; and (iv) all other
Property described in the Collateral Documents.
(2) Concurrently with the consummation of any
Acquisition or the formation of any new
Subsidiary of the Borrower which is permitted
hereunder, the Borrower shall:
(a) in the case of an Acquisition of Capital
Stock by the Borrower or a Subsidiary or
the formation of a new Subsidiary: (A)
deliver or cause to be delivered to the
Administrative Agent, for the ratable
benefit of the Lenders, (I) in the case
of the Acquisition of the stock of a
Domestic Subsidiary or the formation of
a Domestic Subsidiary, all of the
certificates representing the capital
stock (or other instruments or
securities evidencing ownership) of such
new Domestic Subsidiary which is being
acquired or formed, and (II) in the case
of the Acquisition of the stock of a
Foreign Subsidiary or the formation of a
Foreign Subsidiary, now or hereafter
directly owned by the Borrower or any
Guarantor, all of the shares of Capital
Stock of such new Foreign Subsidiary
which is being acquired or formed, as
additional collateral for the Secured
Obligations, to be held by the
Administrative Agent; (B) cause each new
Subsidiary which qualifies as a
Guarantor hereunder and which is being
acquired or formed to deliver to the
Administrative Agent a Guaranty and
Collateral Documents, granting to the
Administrative Agent, for the ratable
benefit of the Lenders, a Lien on and
security interest in all of the Property
now or hereafter owned by such new
Subsidiary; and (C) deliver to the
Administrative Agent such other
documents as the Administrative Agent,
individually or on behalf of the
Lenders, may have reasonably requested;
(b) in any case, provide such other
documentation to the Administrative
Agent, including, without limitation,
one or more opinions of counsel
satisfactory to the Administrative
Agent, environmental surveys, articles
of incorporation, bylaws and
resolutions, which in the reasonable
opinion of the Administrative Agent is
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necessary or advisable in connection
with such Acquisition or formation of
such new Subsidiary.
cc. Liability of Grantor, Beneficiary or Trustee. The
grantor or Beneficiary or the Special Advisor or
Successor Special Advisor Group of the Borrower shall
not be subject to any personal liability whatsoever
under the Loan Documents. The Loan Documents and each
representation, warranty, undertaking and agreement
herein made on the part of the Borrower is made and
intended not as a personal representation, warranty,
undertaking and agreement by the VHT Trustee or for the
purpose or with the intention of binding the VHT
Trustee personally but is made and intended for the
purpose of binding only the trust estate held pursuant
to the Venture Trust Instrument and this Agreement is
executed and delivered by the VHT Trustee solely in the
exercise of the powers expressly conferred upon it as
VHT Trustee; and no personal liability or
responsibility is assumed hereunder by nor shall this
Agreement at any time be enforceable against the VHT
Trustee or its successor in trust on account of this
Agreement or any representation, warranty, covenant,
undertaking or agreement hereunder of the VHT Trustee,
either express or implied, all such personal liability,
if any, being expressly waived. Except as expressly
provided in the preceding sentence, all liability
hereunder of the Borrower shall be limited solely to
recourse against the assets of the trust estate held
pursuant to the Venture Trust Instrument or otherwise
of the Borrower.
dd. Application of Payments with Respect to Defaulting
Lenders. No payments of principal, interest or fees
delivered to the Administrative Agent for the account
of any Defaulting Lender shall be delivered by the
Administrative Agent to such Defaulting Lender.
Instead, such payments shall, for so long as such
Defaulting Lender shall be a Defaulting Lender, be held
by the Administrative Agent, and the Administrative
Agent is hereby authorized and directed by all parties
hereto to hold such funds in escrow and apply such
funds as follows:
(a) First, if applicable to any payments due to the
Administrative Agent pursuant to Section 2.1(d)
and to the Issuer under Section 2.2.5; and
(b) Second, to Loans required to be made by such
Defaulting Lender on any Borrowing Date to the
extent such Defaulting Lender fails to make such
Loans.
Notwithstanding the foregoing, upon the termination of the Aggregate Revolving
Credit Commitment and the payment and performance of all of the Obligations
(other than those owing to a Defaulting Lender), any funds then held in escrow
by the Administrative Agent pursuant to the preceding sentence shall be
distributed to each Defaulting Lender, pro rata in proportion to amounts that
would be due to each Defaulting Lender but for the fact that it is a Defaulting
Lender.
3. CHANGE IN CIRCUMSTANCES
a. Yield Protection. (a) If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the
force of law), or any change in the interpretation or
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administration thereof by any governmental or quasi-governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender
or applicable Lending Installation with any new or changed request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency,
(a) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on
or from payments due from the Borrower (excluding
federal, state and local taxation of the overall net
income of any Lender or applicable Lending
Installation), or changes the basis of taxation of
payments to any Lender in respect of its Loans or other
amounts due it hereunder, or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender
or any applicable Lending Installation (other than
reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar
Advances), or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable
Lending Installation of making, funding or maintaining
loans or reduces any amount receivable by any Lender or
any applicable Lending Installation in connection with
loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by
reference to the amount of loans held or interest
received by it, by an amount deemed material by such
Lender, then, within 15 days of demand by such Lender,
the Borrower shall pay such Lender that portion of such
increased expense incurred or reduction in an amount
received, without duplication of any other amount
claimed pursuant to this Section 3.1 or any other
provision herein, which such Lender determines is
attributable to making, funding and maintaining its
Loans and its Commitments.
(b) If any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive of any jurisdiction outside of the
United States of America or any subdivision thereof (whether or not having the
force of law) imposes or deems applicable any reserve requirement against or fee
with respect to assets of, deposits with or for the account of, or credit
extended by, any lender or any applicable Lending Installation, and the result
of the foregoing is to increase the cost to such lender or applicable Lending
Installation of making or maintaining its Multicurrency Loans to the Borrower or
its Commitment or to reduce the return received by such Lender or applicable
Lending Installation in connection with such Multicurrency Loans or Commitment,
then within 15 days of demand by such Lender, the Borrower shall pay such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received, provided that the Borrower shall
not be required to compensate any lender for such reserve costs or fees to the
extent that
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an amount equal to such reserve costs or fees is received by such lender as a
result of the calculation of the interest rate applicable to Multicurrency
Advances.
b. Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation
controlling such Lender is increased as a result of a Change, then,
within 15 days of demand by such Lender, the Borrower shall pay such
Lender the amount necessary, without duplication of any other amount
claimed pursuant to this Section 3.2 or any other provision of this
Agreement, to compensate for any shortfall in the rate of return on
the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans or its obligation to make
Loans hereunder (after taking into account such Lender's policies as
to capital adequacy). "Change" means (i) any change after the date of
this Agreement in the RiskBased Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or
quasigovernmental rule, regulation, policy, guideline, interpretation,
or directive (whether or not having the force of law) after the date
of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or
any corporation controlling any Lender. "RiskBased Capital Guidelines"
means (i) the riskbased capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements
and Capital Standards," including transition rules, and any amendments
to such regulations adopted prior to the date of this Agreement.
c. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans or Eurocurrency Loans at a
suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or
if the Required Lenders or, with respect to Eurocurrency Loans, the
Required Multicurrency Revolving Credit Lenders, determine that (i)
deposits of a type and maturity appropriate to match fund Eurodollar
Advances or Eurocurrency Advances are not available or (ii) the
interest rate applicable to a Type of Advance or a Eurocurrency
Advance does not accurately reflect the cost of making or maintaining
such Advance, then the Administrative Agent shall suspend the
availability of the affected Type of Advance or Eurocurrency Advance
and require any Eurodollar Advances of the affected Type or affected
Eurocurrency Advances to be repaid.
d. Funding Indemnification. If any payment of a Eurodollar Advance or
Eurocurrency Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurodollar Advance or Eurocurrency
Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower will indemnify
each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Advance
or Eurocurrency Advance.
e. Alternative Lending Installation; Lender Statements; Survival of
Indemnity. To the
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extent reasonably possible, each Lender shall designate an alternate
Lending Installation with respect to its Eurodollar Loans or
Eurocurrency Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1 and 3.2 or to avoid the unavailability of a
Type of Advance or a Eurocurrency Advance under Section 3.3 or 2.20,
so long as such designation is not disadvantageous to such Lender.
Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Administrative Agent) as to the amount
due, if any, under Section 3.1, 3.2 or 3.4. Such written statement
shall set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection
with a Eurodollar or Eurocurrency Loan shall be calculated as though
each Lender funded its Eurodollar or Eurocurrency Loan through the
purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar or
Eurocurrency Rate applicable to such Loan, whether in fact that is the
case or not. Unless otherwise provided herein, the amount specified in
the written statement of any Lender shall be payable on demand after
receipt by the Borrower of such written statement. The obligations of
the Borrower under Sections 3.1, 3.2 and 3.4 shall survive payment of
the Obligations and termination of this Agreement.
f. Taxes.
i. (a) All payments of principal and interest made by the Borrower
under this Agreement and any Note, if any, and all Reimbursement
Obligations shall be made free and clear of, and without
deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding income taxes and franchise
taxes and State of Michigan single business tax (imposed in lieu
of 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 other Loan Document). 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, any Issuer
or any Lender hereunder or under any Note or Facility Letter of
Credit, the amounts so payable to the Administrative Agent, such
Issuer 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 and in the amounts
specified in this Agreement provided, however, that (i) with
respect to any Loan or Facility Letter of Credit in Dollars to or
for the account of the Borrower, the Borrower shall not be
required to increase any such amounts payable to any Lender that
is not organized under the laws of the United States of America
or a state thereof if
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such Lender fails to comply with the requirements of Section 3.6.2,
and (ii) with respect to any Loan in any Eurocurrency, the Borrower
shall not be required to increase any such amounts payable to any
Lender if such Lender fails to comply with the requirements of Section
3.6.3. 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, the Issuer and
the Lenders for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent, the Issuer or any Lender
as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.
(b) If any Lender or the Administrative Agent shall become aware that
it is entitled to receive a refund or credit (such credit to include any
increase in any foreign tax credit as a result of Non-Excluded Taxes) as to
which it has been indemnified by the Borrower pursuant to this Section 3.6.1, it
shall promptly notify the Borrower of the availability of such refund or credit
and shall, within 45 days after receipt of a request by the Borrower, apply for
such refund or credit at the Borrower's expense, and in the case of any
application for such refund or credit by the Borrower, shall, if legally able to
do so, deliver to the Borrower such certificates, forms or other documentation
as may be reasonably necessary, and reasonably acceptable to the Lender or the
Administration Agent, to assist the Borrower in such application. If any Lender
or the Administrative Agent receives a refund or credit (such credit to include
any increase in any foreign tax credit) in respect to any Non-Excluded Taxes as
to which it has been indemnified by the Borrower pursuant to this Section 3.6.1,
it shall promptly notify the Borrower of such refund or credit and shall, within
45 days after receipt of such refund or the benefit of such credit, repay the
amount of such refund or benefit of such credit (with respect to the credit, as
determined by the Lender or the Administrative Agent in its sole judgment) to
the Borrower (to the extent of amounts that have been paid by the Borrower under
this Section 3.6.1 with respect to Non-Excluded Taxes giving rise to such refund
or credit), net of all reasonable out-of-pocket expenses of such Lender or the
Administrative Agent and without interest (other than interest actually received
from the relevant taxing authority or other Governmental Authority with respect
to such refund or credit); provided however, that the Borrower, upon the request
of such Lender or the Administrative Agent, agrees to return the amount of such
refund or benefit of such credit to such Lender or the Administrative Agent in
the event such Lender or the Administrative Agent is required to repay the
amount of such refund or benefit of such credit to the relevant taxing authority
or other Governmental Authority.
ii. Each Lender that is not organized under the laws of the United
States of America or a state thereof shall:
(1) at least five Business Days before the date of the initial
payment to be made by the Borrower under this Agreement to
such
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Lender, deliver to the Borrower and the Administrative Agent
(A) if such Lender is a "bank" within the meaning of Section
881 (c) (3) (A) of the Code, deliver to the Borrower and the
Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 (or other
appropriate form), certifying in either case that such
Lender is entitled to receive payments under the Loan
Documents without deduction or withholding of any United
States federal income taxes or (B) if such Lender is not a
"bank within the meaning of Section 881 (c) (3) (A) of the
Code and intends to claim exemption from U.S. Federal
withholding tax under Section 871 (h) or 881 (c) of the Code
with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors
thereto (and, if such non-U.S. Lender delivers a Form W-8, a
certificate representing that such non-U.S. Lender is not a
bank for purposes of Section 881 (c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871
(h) (3) (B) of the Code of the Borrower and is not a
controlled foreign corporation related to the Borrower
(within the meaning of Section 864 (d) (4) of the Code)),
properly completed and duly executed by such non-U.S. Lender
claiming complete exemption from U.S. Federal withholding
tax on payments of interest by the Borrower under the Loan
Documents. Each Lender which so delivers a Form 1001 or 4224
further undertakes to deliver to the Borrower and the
Administrative Agent two additional copies of such form (or
a successor form) on or before the date that such form (or a
replacement of an expired form) expires (currently, three
successive calendar years for Form 1001 and one calendar
year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in
each case certifying that such Lender is entitled to receive
payments under the Loan Documents without deduction or
withholding of any United States federal income taxes,
unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required 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 promptly advises the
Borrower and the Administrative Agent that it is not capable
of receiving payments without any deduction or withholding
of United States federal income tax.
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iii. If any payments by the Administrative Agent or the Borrower to
any Multicurrency Revolving Credit Lender are subject to any
withholding tax, such Multicurrency Revolving Credit Lender shall
file such forms and take such other actions to avoid the payment
of the withholding tax by the Administrative Agent or the
Borrower to the extent the Multicurrency Revolving Credit Lender
is able to do so.
4. CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION
a. Effectiveness of Agreement. This Agreement shall become effective only
upon receipt by the Administrative Agent of all of the documents and
other materials described below, with sufficient copies for the
Lenders, and satisfaction of all of the other conditions set forth
below, to wit:
(1) Copies of the trust agreement, articles of incorporation or
other organizational documents of the Borrower and each
Guarantor, and in the case of any corporation or limited
liability company a certificate of good standing.
(2) Copies, certified by the secretary or assistant secretary or
trustee, as the case may be, of the Borrower and each
Guarantor, of its bylaws or operating agreement and of its
Board of Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by the Administrative
Agent) authorizing the execution of the Loan Documents.
(3) An incumbency certificate, executed by the secretary or
assistant secretary or trustee, as the case may be, of the
Borrower and each Guarantor, which shall identify by name
and title and bear the signature of the officers or other
Person of the Borrower and each Guarantor authorized to sign
the Loan Documents and to make borrowings hereunder, upon
which certificate the Administrative Agent and the Lenders
shall be entitled to rely until informed of any change in
writing by the Borrower.
(4) A certificate, signed by the chief financial officer of the
Borrower, stating that on the Effective Date no Default or
Unmatured Default has occurred and is continuing.
(5) The written opinion of the Borrower's and Guarantors'
counsel, addressed to the Lenders, in substantially the form
of Exhibit H hereto.
(6) The Foreign Subsidiary Opinions and such other legal
opinions as may be required by the Administrative Agent.
(7) Written money transfer instructions, in substantially the
form of Exhibit I hereto (to the extent required by the
Administrative Agent), addressed to the Administrative Agent
and signed by an Authorized Officer, together with such
other related money transfer authorizations as the
Administrative Agent may have reasonably requested.
(8) The Collateral Documents duly executed on behalf of the
Borrower and
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the Guarantors, as the case may be, or amendments thereto,
confirming the continuing effectiveness of such documents,
granting to the Lenders and the Administrative Agent the
collateral and security intended to be provided pursuant to
Section 2.28, together with:
(a) Recordation, filing and other action (including payment
of any applicable taxes or fees) in such jurisdictions
as the Lenders or the Administrative Agent may deem
necessary or appropriate with respect to the Security
Documents, including the filing of financing statements
and similar documents which the Lenders or the
Administrative Agent may deem necessary or appropriate
to create, preserve or perfect the liens, security
interests and other rights intended to be granted to
the Lenders or the Administrative Agent thereunder,
together with Uniform Commercial Code record searches
in such offices as the Lenders or the Administrative
Agent may request;
(b) Policies of mortgage title insurance issued by an
insurer and in amounts satisfactory to the Lenders and
the Administrative Agent, insuring the interest of the
Lenders and the Administrative Agent under the
Mortgages without standard exceptions and without any
special exceptions not acceptable to the Lenders and
the Administrative Agent and containing such further
endorsements, affirmative coverage and other terms as
the Lenders and the Administrative Agent may request;
(c) Surveys of the property subject to the Mortgages made
by a land surveyor licensed in the State in which such
property is located and acceptable to the Lenders and
the Administrative Agent complying with the Minimum
Standard Detail Requirements for Land Title Surveys as
adopted by the American Title Association and the
American Congress on Surveying and Mapping and showing
such details as the Lenders and the Administrative
Agent may request, certified to the Lenders and the
Administrative Agent and the issuer of such mortgage
title insurance policy in form acceptable to the
Lenders and the Administrative Agent, or such surveys
recertified by such a surveyor sufficient to permit the
issuers of all mortgage title insurance policies to
remove their standard exceptions;
(d) A schedule setting forth all real property leased by
the Borrower, together with copies of the related
leases, certified as true and correct as of the
Effective Date by a duly authorized officer of such
Borrower, and an agreement of each landlord under such
leases, in form and substance acceptable to the Lenders
and the Administrative Agent, waiving its distraint,
lien and similar rights with respect to any property
subject to the Security Documents and agreeing to
permit the Lenders and the Administrative Agent to
enter such premises in connection
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therewith; and
(e) Evidence that the casualty and other insurance required
pursuant to the Loan Documents is in full force and
effect.
(9) The terms and provisions of the 1999 Subordinated Debt
Documents, and the 1999 Senior Unsecured Debt Documents
shall have been approved by the Administrative Agent and the
Lenders, which approval shall be deemed given upon delivery
of such Lender's signature page to this Agreement, and the
Borrower shall be in compliance with all material provisions
of the 1999 Subordinated Debt Documents and the 1999 Senior
Unsecured Debt Documents.
(10) Copies of all governmental and nongovernmental consents,
approvals, authorizations, declarations, registrations or
filings required on the part of the Borrower or any
Guarantor in connection with the execution, delivery and
performance of the Loan Documents, or the transactions
contemplated hereby or thereby or as a condition to the
legality, validity or enforceability of the Loan Documents,
certified as true and correct in full force and effect as of
the Effective Date by a duly authorized officer of the
Borrower, or if none are required, a certificate of such
officer to that effect;
(11) Payment of all fees owing by the Borrower to the Lenders and
the Administrative Agent as of the Effective Date.
(12) An Environmental Certificate executed by the Borrower
together with all environmental audits and reports required
by the Administrative Agent.
(13) Evidence of the satisfactory completion of the Peguform
Acquisition and all due diligence with respect to the
Borrower, its Subsidiaries, Peguform and the Peguform
Acquisition, including but not limited to, the satisfactory
review (reasonably acceptable to the Administrative Agent)
of all Peguform Acquisition Documents, all terms, conditions
and provisions of the Peguform Acquisition, all final
projections, all pro forma and prospective financial
statements, audited year end financial statements for
Peguform and the Borrower, all sources and uses statements,
pro forma covenant compliance projections and certificates,
the organizational structure of the Borrower and its
Subsidiaries after the Peguform Acquisition, all
environmental matters relating to Peguform, and the form and
structure, including the financial, legal, accounting, tax
and all other aspects of the Peguform Acquisition, all of
which shall be satisfactory to the Administrative Agent and
its counsel.
(14) Evidence satisfactory to the Administrative Agent that no
Material Adverse Effect with respect to Peguform or any its
Subsidiaries since September 30, 1998 and as shown in, or
since, the pro forma financial statement dated December 31,
1998 and delivered to the Administrative Agent prior to the
Effective Date.
(15) The Borrower shall have received the Net Cash Proceeds from
the 1999 Senior Subordinated Notes and the 1999 Senior
Unsecured Notes.
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(16) The initial funding shall have occurred by no later than May
31, 1999.
(17) Evidence satisfactory to the Administrative Agent that the
Borrower shall have (or will with the proceeds of the first
Advance) paid or defeased all outstanding obligations under
the 1997 Credit Agreement (and it is acknowledged and agreed
by the Borrower that this Agreement refunds, refinances and
replaces the 1997 Credit Agreement) and the senior
subordinated notes due April 1, 2004.
(18) Evidence that the Borrower shall have entered into such Rate
Hedging Agreements with respect to the Obligations and 1997
Senior Unsecured Notes as shall be required by the
Administrative Agent.
(19) Delivery of such other agreements and documents, and the
satisfaction of such other conditions as may be reasonably
required by the Administrative Agent, including without
limitation a subrogation and contribution agreement executed
by the Borrower and Guarantors, such funding instructions,
sources and uses certificate and other certificates required
by the Administrative Agent and such evidence of the
perfection and priority of all liens and security interests
as required by the Administrative Agent.
(20) Evidence satisfactory to the Administrative Agent that the
Borrower shall be in compliance, both before and after
giving effect to this Agreement, the Peguform Acquisition
and the other transactions contemplated hereby, with all
terms and conditions of the 1997 Senior Unsecured Debt
Documents, the 1999 Senior Unsecured Debt Documents and the
1999 Senior Subordinated Debt Documents.
b. Each Advance. The Lenders shall not be required to make any Advance
unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in Article
V of this Agreement (excluding Section 5.5 and 5.24
with respect to the Borrower and its Subsidiaries
(other than the Subsidiaries being acquired in
connection with the Peguform Acquisition) in connection
with the Advances made on the Effective Date only) and
the other representations and warranties contained in
the Loan Documents are true and correct as of such
Borrowing Date except to the extent any such
representation or warranty is stated to relate solely
to an earlier date, in which case such representation
or warranty shall be true and correct on and as of such
earlier date.
(c) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lenders
and their counsel.
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.2(i) and (ii) have been satisfied. The Administrative Agent may
require a duly completed compliance certificate in substantially the form of
Exhibit J hereto as a condition to making an Advance.
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5. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
a. Corporate Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation or trust duly incorporated or organized
as the case may be, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite
authority to conduct its business in each jurisdiction in which its
business is conducted.
b. Authorization and Validity. The Borrower and each Guarantor has the
corporate and trust power, as the case may be, and authority and legal
right to execute and deliver the Loan Documents and to perform its
obligations thereunder. The execution and delivery by the Borrower and
each Guarantor of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by
proper corporate or trust proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Borrower and
each Guarantor enforceable against the Borrower and each Guarantor in
accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
c. No Conflict; Government Consent. Neither the execution and delivery by
the Borrower and each Guarantor of the Loan Documents to which it is a
party, nor the consummation of the transactions therein contemplated,
nor compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding
on the Borrower or any of its Subsidiaries or the Borrower's or any
Subsidiary's articles of incorporation, operating agreement, bylaws,
Venture Trust Instrument or other organizational document or the
provisions of any indenture, instrument or agreement to which the
Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a
default thereunder, or result in the creation or imposition of any
Lien in, of or on the Property of the Borrower or its Subsidiary
pursuant to the terms of any such indenture, instrument or agreement.
No order, consent, approval, license, authorization, or validation of,
or filing, recording or registration with, or exemption by, or other
action in respect of any governmental or public body or authority, or
any subdivision thereof, is required to authorize, or is required in
connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the
Loan Documents.
d. Financial Statements. The December 31, 1998 and the March 31, 1999
consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with
Agreement Accounting Principles in effect on the date such statements
were prepared and fairly present the consolidated financial condition
and operations of the Borrower and its Subsidiaries at such date and
the consolidated results of their operations for the period then
ended, subject, in the case of interim statements, to routine year-end
adjustments and the absence of footnotes. The Pro Forma Financial
Statements and Projections fairly present the pro forma consolidated
financial condition of the Borrower and its Subsidiaries after giving
effect to the Peguform Acquisition in accordance with Agreement
Accounting Principles and
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subject to adjustments based on the final debt structure, and
contain reasonable assumptions and give appropriate effect to those
assumptions, and are based on estimates and assumptions considered
reasonable by the Borrower's management and the best information
available to the Borrower's management at the time made, and use
information consistent with the plans of the Borrower.
e. Material Adverse Change. Since March 31, 1999, there has been no
change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
f. Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant
to any assessment received by the Borrower or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as
to which adequate reserves have been provided in accordance with
Agreement Accounting Principles. The United States income tax returns
of the Borrower and its Subsidiaries have been audited by the Internal
Revenue Service as shown on Schedule 5.6. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect
of any taxes or other governmental charges are adequate.
g. Litigation and Contingent Obligations. Other than as set forth on
Schedule 5.7, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of
any of their officers, threatened against or affecting the Borrower or
any of its Subsidiaries which could have a Material Adverse Effect or
which seeks to prevent, enjoin or delay the Peguform Acquisition or
the making of the Loans or Advances, and there is no basis for any of
the foregoing. The Borrower and its Subsidiaries have no material
contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.
h. Subsidiaries. Schedule 5.8 hereto contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting
forth their respective jurisdictions of incorporation and the
percentage of their respective capital stock owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of
Capital Stock of such Subsidiaries have been duly authorized and
issued and are fully paid and nonassessable.
i. ERISA; Etc. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $5,000,000 at any time within 10 days
after the Borrower knows of the amount of such Unfunded Liabilities.
Neither the Borrower nor any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any withdrawal liability
to Multiemployer Plans. Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor
any other members of the Controlled Group has withdrawn from any Plan
or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan. Each Foreign Plan is in compliance
in all material respects with all Requirements of Law. The aggregate
of the accumulated unfunded liabilities under all Foreign Pension
Plans does not exceed the Dollar Equivalent of $50,000,000. There are
no actions, suits or claims (other than routine claims for benefits)
pending or, to the knowledge of the Borrower, threatened against the
Borrower or any Subsidiary with respect to any Foreign Plan.
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j. Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Administrative Agent
or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the
statements contained therein not misleading; provided, however, that
to the extent any such information, exhibits or reports include or
incorporate by reference any forward-looking statement (each, a
"Forward-Looking Statement") which reflects the Borrower's current
view (as of the date such Forward-Looking Statement is made) with
respect to future events, prospects, projections or financial
performance, such Forward-Looking Statement is subject to
uncertainties and other factors which could cause actual results to
differ materially from such Forward-Looking Statement.
k. Regulation T, U and X. Margin Stock constitutes less than 25% of those
assets of the Borrower and its Subsidiaries which are subject to any
limitation on sale, pledge, or other restriction hereunder.
l. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or
other corporate restriction which could have a Material Adverse
Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is
a party, which default could have a Material Adverse Effect or (ii)
any agreement or instrument evidencing or governing Indebtedness.
m. Compliance With Laws. Other than with respect to Environmental Laws
(which is addressed in Section 5.16), the Borrower and its
Subsidiaries have complied with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the
ownership of their respective Property if failure to comply could
reasonably be expected to have a Material Adverse Effect.
n. Ownership of Properties. Except as set forth on Schedule 5.14 hereto,
on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by
Section 6.15, to all of the Property and assets reflected in the
financial statements as owned by it.
o. Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA or any plan (within the
meaning of Section 4975 of the Code); and neither the execution of
this Agreement nor the making of Loans hereunder gives rise to a
prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code.
p. Environmental Matters. All representations and warranties contained in
the Environmental Certificate are true and correct.
q. Investment Company Act. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Trust Act
of 1940, as amended.
r. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within
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the meaning of the Public Utility Holding Company Act of 1935,
as amended.
s. PostRetirement Benefits. The present value of the expected cost of
postretirement medical and insurance benefits payable by the Borrower
and its Subsidiaries to its employees and former employees, as
estimated by the Borrower in accordance with procedures and
assumptions deemed reasonable by the Required Lenders, does not exceed
$2,000,000.
t. Insurance. The certificate signed by the President or Chief Financial
Officer of the Borrower, that attests to the existence and adequacy
of, and summarizes, the property and casualty insurance program
carried by the Borrower and its Subsidiaries and that has been
furnished by the Borrower to the Administrative Agent and the Lenders,
is complete and accurate. This summary includes the insurer's or
insurers' name(s), policy number(s), expiration date(s), amount(s) of
coverage, type(s) of coverage, exclusion(s), and deductibles. This
summary also includes similar information, and describes any reserves,
relating to any selfinsurance program that is in effect.
u. Solvency.
(a) Immediately after the consummation of the Peguform
Acquisition and immediately following the making of each
Loan, if any, made on the date hereof and after giving
effect to the application of the proceeds of such Loans, (a)
the fair value of the assets of the Borrower and the
Subsidiaries on a consolidated basis, at a fair valuation,
will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Borrower and the
Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the property of the Borrower and the
Subsidiaries on a consolidated basis will be greater than
the amount that will be required to pay the probable
liability of the Borrower and the Subsidiaries on a
consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the
Borrower and the Subsidiaries on a consolidated basis will
be able to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities
become absolute and matured; and (d) the Borrower and the
Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the
businesses in which they are engaged as such businesses are
now conducted and are proposed to be conducted after the
date hereof.
(b) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay
such debts as they mature, taking into account the timing of
and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be
payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
v. Labor Controversies. There are no labor controversies pending or, to
the best of the
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Borrower's knowledge, threatened against the Borrower or any
Subsidiary, which could have a Material Adverse Effect.
w. No Adverse Development. Since March 31, 1999, neither the consolidated
financial position nor the business as a whole of the Borrower and its
Subsidiaries nor any Substantial Portion of the properties and assets
of the Borrower and its Subsidiaries has been materially adversely
affected as a result of any legislative or regulatory change or of any
fire, explosion, tidal wave, flood, windstorm, earthquake, landslide,
land subsidence, accident, condemnation or governmental intervention,
order of any court or governmental agency or commission, technological
development in the industries in which the Borrower operates, act of
God or of the public enemy or of armed forces, rebellion, strike,
labor disturbance or embargo, or otherwise, whether or not insured
against, which could reasonably be expected to impair materially the
ability of the Borrower and the Guarantors to fulfill punctually their
Obligations under the Loan Documents.
x. Burdensome Obligations. Neither the Borrower nor any Subsidiary is a
party to or is bound by any agreement, deed, lease, or other
instrument, or subject to any charter, bylaw or other corporate
restriction which, in the opinion of the management of the Borrower,
is so unusual or burdensome as in the foreseeable future might cause a
Material Adverse Effect. The Borrower does not presently anticipate
that future expenditures needed to meet the provisions of federal or
state statutes, orders, rules or regulations will be so burdensome as
to affect or impair in a materially adverse manner the consolidated
financial condition, business, operations or property of the Borrower.
y. Payment of Wages. The Borrower and its Domestic Subsidiaries are in
substantial compliance in all material respects with the Fair Labor
Standards Act, as amended, and have paid all minimum and overtime
wages required by law to be paid to its employees.
z. Intellectual Property. Set forth on Schedule 5.26 is a complete and
accurate list of all patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses (other than
those licenses implicit in purchase orders and supply agreements of
customers and suppliers) thereof, of the Borrower and each of its
Subsidiaries showing as of the Effective Date the jurisdiction in
which registered, the registration number and the date of
registration. The Borrower and each of its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, service marks,
copyrights, technology, know-how and processes necessary for the
conduct of its business as currently conducted (the "Intellectual
Property") except for those the failure to own or licenses which could
not be reasonably be expected to have a Material Adverse Effect. No
claim has been asserted and is pending by any person challenging or
questioning the use by the Borrower or any of its Subsidiaries of any
such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, nor does the Borrower or any of its
Subsidiaries know of any valid basis for any such claim, the use of
such Intellectual Property by the Borrower and each of its
Subsidiaries does not infringe on the rights of any Person, and, to
the knowledge of the Borrower, no such Intellectual Property of the
Borrower and its Subsidiaries has been infringed, misappropriated or
diluted by any other Person except for such claims, infringements,
misappropriation and dissolution that, in the aggregate, could not
have a Material Adverse Effect.
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aa. Other Representations. To the best knowledge of the Borrower, all
representations and warranties contained in the Peguform Acquisition
Documents are true and correct except as disclosed on the Schedules to
this Agreement.
bb. Year 2000. The Borrower has made a full and complete assessment of the
Year 2000 Issues and has a realistic and achievable program for
remediating the Year 2000 Issues on a timely basis (the "Year 2000
Program"). Based on such assessment and on the Year 2000 Program the
Borrower does not reasonably anticipate that Year 2000 Issues will
have a Material Adverse Effect.
cc. 1997 Senior Unsecured Debt Documents. All representations and
warranties of the Borrower contained in any Senior Unsecured Debt
Documents are true and correct in all material respects when made.
This Agreement and the other Loan Documents are the "Credit Agreement"
as defined in the 1997 Senior Unsecured Indenture. The incurrence of
the Secured Obligations is in full compliance with the 1997 Senior
Unsecured Debt Documents. The Term Loans are being incurred pursuant
to, and in full compliance with, the 1997 Senior Unsecured Indenture,
and the Term Loans are classified as Indebtedness incurred under the
"Debt Incurrence Ratio". There is no event of default or event or
condition which could become an event of default with notice or lapse
of time or both, under the 1997 Senior Unsecured Debt Documents and
each of the 1997 Senior Unsecured Debt Documents is in full force and
effect.
dd. 1999 Senior Subordinated Debt Documents and 1999 Senior Unsecured Debt
Documents. All representations and warranties of the Borrower
contained in any 1999 Senior Subordinated Debt Documents and in any
1999 Senior Unsecured Debt Documents are true and correct in all
material respects when made. This Agreement and the other Loan
Documents are the "Credit Agreement" as defined in the 1999 Senior
Unsecured Indenture and the 1999 Subordinated Indenture. The Borrower
will receive net proceeds in the approximate amount of $121,406,250 on
the Effective Date from its issuance of the 1999 Senior Subordinated
Notes and in the approximate amount of $121,562,500 on the Effective
Date from its issuance of the 1999 Senior Unsecured Notes, and all
agreements, instruments and documents executed or delivered pursuant
to the issuance of the 1999 Senior Subordinated Notes or the 1999
Senior Unsecured Notes are described on Schedule 5.30 hereto. The
incurrence of the Secured Obligations is in full compliance with the
1997 Senior Unsecured Debt Documents, the 1999 Senior Unsecured Debt
Documents and the 1999 Subordinated Debt Documents. All Secured
Obligations are "Senior Debt " and all Obligations are "Designated
Senior Debt" as defined in the 1999 Subordinated Debt Documents and,
other than the Obligations and the 1997 Senior Unsecured Notes (or any
permitted refinancing thereof), there is no other "Designated Senior
Debt" thereunder. There is no event of default or event or condition
which could become an event of default with notice or lapse of time or
both, under the 1999 Senior Subordinated Debt Documents or the 1999
Unsecured Debt Documents and each of the 1999 Senior Subordinated Debt
Documents and the 1999 Senior Unsecured Debt Documents is in full
force and effect.
ee. Peguform Acquisition. Simultaneously with the disbursement of initial
Advance hereunder, the Borrower will have completed the Peguform
Acquisition in accordance with the Peguform Acquisition Documents and
in accordance with all laws and regulations and all other Requirements
of Law, and will acquire, free and clear of all
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Liens, good and marketable title to all Capital Stock to be acquired
pursuant to the Peguform Acquisition. Complete and correct copies of
all Peguform Acquisition Documents have been delivered to the
Administrative Agent on or before the Peguform Acquisition Date, and
the Borrower has satisfied all conditions precedent required as of
closing under the Peguform Acquisition to complete the Peguform
Acquisition. The total consideration paid or payable for the Peguform
Acquisition will not exceed $475,000,000 plus $45,000,000 of
Indebtedness assumed in connection with the Peguform Acquisition.
ff. Subsidiary Advances. The making of any loans or other advances by any
Foreign Subsidiary to the Borrower which are subordinated to all
Secured Obligations does not violate or contravene (a) any provision
of any security issued by the Foreign Subsidiary or of any agreement,
instrument or other undertaking to which the Foreign Subsidiary is a
party or by which it or any of its property is bound (each a
"Contractual Obligation") or (b) the certificate of incorporation and
by-laws or other organizational or governing documents of such Foreign
Subsidiary, or any Requirement of Law. Other than the restrictions
described on Schedule 5.32, there are no restrictions on any dividends
or other distributions which may be paid by any Foreign Subsidiary
upon its Capital Stock, whether under any Contractual Obligation,
Requirement of Law or otherwise.
6. COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
a. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in
accordance with Agreement Accounting Principles, and furnish to the
Lenders:
(a) Within 90 days after the close of each of its fiscal years,
an unqualified audit report certified by independent
certified public accountants, acceptable to the Lenders,
prepared in accordance with Agreement Accounting Principles
on a consolidated basis for itself and the Subsidiaries,
including balance sheets as of the end of such period,
related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by
(a) any management letter prepared by said accountants, and
(b) a certificate of said accountants that, in the course of
their examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof.
(b) Within 45 days after the close of the first three quarterly
periods
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of each of its fiscal years, for itself and the
Subsidiaries, consolidated unaudited balance sheets as at
the close of each such period and consolidated unaudited
profit and loss and unaudited reconciliation of surplus
statements and an unaudited statement of cash flows for the
period from the beginning of such fiscal year to the end of
such quarter, all certified by its chief financial officer.
(c) Within 30 Business Days after the close of each fiscal month
end, a Borrowing Base Certificate prepared as of the close
of business on the last day of each month and such
supporting schedules requested by the Administrative Agent,
certified as true and correct by an authorized officer of
the Borrower.
(d) Within 30 days of the request of the Administrative Agent, a
report containing an aging as of the end of the preceding
month of accounts receivable and accounts payable of the
Borrower and its Subsidiaries, in a form satisfactory to the
Administrative Agent, and a report identifying the inventory
of the Borrower and its Subsidiaries, and the cost and
location thereof as of the end of the preceding month, in
form satisfactory to the Administrative Agent.
(e) Promptly and in any event within 10 days after receipt, a
copy of any management letter or comparable analysis
prepared by the auditors for the Borrower and its
Subsidiaries.
(f) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in
substantially the form of Exhibit J hereto signed by an
authorized officer showing the calculations necessary to
determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status
thereof.
(g) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single
Employer Plan, certified as correct by an actuary enrolled
under ERISA.
(h) As soon as possible and in any event within 10 days after
the Borrower or any Subsidiary knows that any Reportable
Event has occurred with respect to any Plan, a statement,
signed by the chief financial officer of the Borrower,
describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
(i) As soon as possible and in any event within 10 days after
receipt by the Borrower or any Subsidiary, a copy of (a) any
notice or claim to the effect that the Borrower or any of
its Subsidiaries is or may be liable to any Person as a
result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, and
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(b) any notice alleging any violation of any federal, state
or local environmental, health or safety law or regulation
by the Borrower or any of its Subsidiaries, which, in either
case, could have a Material Adverse Effect.
(j) Promptly upon the furnishing thereof to the shareholders or
Beneficiary or trustees of the Borrower or any holder of the
1999 Subordinated Debt, the 1999 Senior Unsecured Notes, or
the 1997 Senior Unsecured Notes or trustee therefor, copies
of all financial statements, reports, proxy statements and
other documents so furnished.
(k) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(l) Promptly and in any event within three calendar days after
becoming aware of the occurrence of a Default or an
Unmatured Default, or the occurrence of an event of default
under the Peguform Acquisition Documents, a certificate of
the chief financial officer of the Borrower stating the
nature and status thereof.
(m) Such other information (including nonfinancial information)
as the Administrative Agent or any Lender may from time to
time reasonably request.
b. Use of Proceeds. The Borrower will, and will cause each Subsidiary to,
use the proceeds of the Advances for working capital and other
corporate purposes. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to purchase or
carry any Margin Stock.
c. Notice of Default. The Borrower will, and will cause each Subsidiary
to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development,
financial or otherwise, which could have a Material Adverse Effect.
d. Conduct of Business. The Borrower will, and (subject to Sections 6.12
and 6.13) will cause each Subsidiary to, carry on and conduct its
business in substantially the same fields of enterprise as it is
presently conducted and to do all things necessary to remain duly
incorporated, validly existing and in good standing as a corporation
in its jurisdiction of incorporation and maintain all requisite
authority to conduct its business in each jurisdiction in which its
business is conducted; provided, however, that any Domestic Subsidiary
may transfer its jurisdiction of incorporation to another State of the
United States of America. The Borrower will not permit the
organizational documents of any successor to the Borrower under
Section 6.12 to be modified in any manner materially adverse to the
Lenders without the consent of the Administrative Agent.
e. Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due
all taxes, assessments and governmental charges and levies upon it or
its income, profits or Property, except those which are being
contested in good
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faith by appropriate proceedings and with respect to which adequate
reserves have been set aside in accordance with Agreement Accounting
Principles.
f. Insurance. The Borrower will maintain fire and extended coverage
insurance on its and each Subsidiary's equipment, inventory, real
property and other tangible assets containing a lender's loss payable
and mortgagee clause in favor of the Administrative Agent and
providing that said insurance will not be terminated except after at
least 30 days' written notice from the insurance company to the
Administrative Agent. The certificate signed by the President or Chief
Financial Officer of the Borrower, that attests to the existence and
adequacy of (as comparable to insurance customarily maintained by
similar companies in the Borrower's line of business), and summarizes,
the property and casualty insurance program carried by the Borrower
and that has been furnished by the Borrower to the Administrative
Agent and the Lenders, is complete and accurate. This summary includes
the insurer's or insurers' name(s), policy number(s), expiration
date(s), amount(s) of coverage, type(s) of coverage, exclusion(s), and
deductibles. This summary also includes similar information, and
describes any reserves, relating to any selfinsurance program that is
in effect.
g. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply in all material respects with all Requirements
of Law.
h. Maintenance of Properties. Except as to Property which is obsolete or
is not being used in the business or is to be replaced, the Borrower
will, and will cause each Subsidiary to, do all things necessary to
maintain, preserve, protect and keep its Property in good repair,
working order and condition, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
i. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Administrative Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, corporate
books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial
records of the Borrower and each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers
at such reasonable times and intervals as the Lenders may designate.
j. Dividends. The Borrower will not declare or pay any dividends or make
any distributions of any kind (including without limitation any
distribution of assets) on its Capital Stock (other than dividends
payable in its own Capital Stock) or redeem, repurchase or otherwise
acquire or retire any of its Capital Stock at any time outstanding,
except that the Borrower may make distributions to any Beneficiary of
the Borrower required to pay the aggregate federal, state and local
income and intangibles tax liability of such Beneficiary attributable
solely to earnings of the Borrower, provided that such amounts shall
be paid only so long as the Borrower is an entity described in Section
1361(a)(1), 1361(c)(2), 1361(d) or 1361(e) of the Code, an S
Corporation, a limited liability company or a partnership or an entity
that is disregarded as an entity separate from its owner(s) for tax
purposes (each a "Pass Through Entity") and such distributions may be
made only as and when such tax liability of the Beneficiary is due
(the "Permitted Tax Distributions"), and the Borrower shall comply
with all requirements of
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the 1997 Senior Unsecured Debt Documents, 1999 Senior Unsecured Debt
Documents and 1999 Subordinated Debt Documents in connection with the
payment of any such dividends or other distributions. The Borrower
will not issue any Disqualified Stock. For purposes of the calculation
and distribution in this Section 6.10, the Beneficiary shall be the
Person ultimately liable for the payment of taxes on the earnings of
the Borrower.
k. Indebtedness. The Borrower will not, nor will it permit any Subsidiary
to, create, incur or suffer to exist any Indebtedness, except:
(a) The Loans and Facility Letters of Credit and other
Indebtedness under the Loan Documents;
(b) Indebtedness existing on the date hereof and described in
Schedule 6.11 hereto, including the 1997 Senior Unsecured
Notes, the 1999 Senior Unsecured Notes and the 1999
Subordinated Notes, but no increase in the principal amount
thereof, as reduced from time to time;
(c) Indebtedness arising under Rate Hedging Agreements, provided
that such Rate Hedging Agreements are entered into to hedge
the Borrower's and its Subsidiaries' reasonably estimated
interest rate, foreign currency or commodity exposure and
are not entered into for purposes of financial speculation;
(d) Indebtedness incurred solely to refinance or replace any
then existing Indebtedness permitted hereunder, provided
that such Indebtedness does not in any case exceed the
amount of existing Indebtedness refinanced or replaced and
such existing Indebtedness is paid and discharged to the
extent of the new Indebtedness incurred;
(e) Indebtedness of the Borrower or any of its Subsidiaries
owing to the Borrower or any of its Subsidiaries, provided
that (w) if such Indebtedness is owing to a Borrower or a
Guarantor, the Administrative Agent shall have a first
priority, perfected and enforceable lien and security
interest in form and substance acceptable to the
Administrative Agent in such Indebtedness and all rights and
interests of the Borrower or such Guarantor with respect
thereto, (x) if the Borrower or the Guarantor is the obligor
on such Indebtedness, such Indebtedness, if required by the
Administrative Agent, shall be expressly subordinated, by
written agreement in form and substance acceptable to the
Administrative Agent, to the Secured Obligations, (y) the
aggregate principal amount of such Indebtedness to the
Borrower or any Guarantor owing by all Subsidiaries which
are not Guarantors shall not exceed the sum of the amount
incurred to complete the Peguform Acquisition and the
Peguform Restructuring and $100,000,000 at any time
outstanding and (z) the aggregate principal amount of such
Indebtedness owing by all Subsidiaries which are not
Wholly-Owned Subsidiaries shall not exceed $10,000,000 at
any time outstanding;
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(f) Indebtedness in connection with any receivables factoring in
the ordinary course of business in an aggregate amount at
any one time outstanding not to exceed an amount equal to
the Dollar Equivalent of $10,000,000;
(g) The Additional Subordinated Notes; and
(h) Other Indebtedness in an aggregate amount at any one time
outstanding not to exceed $50,000,000, provided that the
aggregate amount of such other Indebtedness owing by Foreign
Subsidiaries shall not exceed $25,000,000.
Notwithstanding the above, the Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, other than the
Loan Documents and the Additional Subordinated Notes, which is classified as
"Credit Facilities" under the 1999 Senior Unsecured Indenture or the 1999
Subordinated Indenture and which would limit the ability of the Borrower to
borrow the full amount of the Commitments.
l. Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that a
Subsidiary may merge into the Borrower or a WhollyOwned Subsidiary and
any non Wholly-Owned Subsidiary may merge into any Subsidiary for
which the Borrower owns an equal or greater percentage of the Capital
Stock of such Subsidiary.
Notwithstanding anything contained in this Agreement to the contrary, the
Borrower is permitted to contribute or transfer all of the Capital Stock of
the Subsidiaries then held by the Borrower (other than the Capital Stock of the
Subsidiary which is to receive such contribution from the Borrower or the
Capital Stock of a Subsidiary of which such receiving Subsidiary is a
Subsidiary) to Venture Holdings Corporation or any other successor to the
Borrower (a "Trust Contribution") provided that (A) any successor or surviving
corporation or limited liability company is organized and existing under the
laws of the United States, any state thereof or the District of Columbia,
pursuant to organizational documents acceptable to the Administrative Agent, (B)
such contribution or reorganization is not materially adverse to the Lenders; it
being understood, however, that such contribution or reorganization shall not be
considered materially adverse to the Lenders solely because the successor or
surviving corporation or limited liability company is subject to income taxation
as a corporate or limited liability entity, (C) immediately after giving effect
to such transaction, no Default of Unmatured Default exists, (D) the actions
comprising such contribution or reorganization (e.g., the contribution of
Capital Stock of the Subsidiaries, or the issuance of Capital Stock of the
corporation or limited liability company or the Capital Stock of a Subsidiary of
which such receiving Subsidiary is a Subsidiary in exchange for assets of or
Capital Stock in the Borrower or in exchange for Capital Stock of a corporation
or limited liability company or the Capital Stock of a Subsidiary of which such
receiving Subsidiary is a Subsidiary holding such Capital Stock, or the merger
or consolidation of such corporations) will not themselves directly result in
material income tax liability to the successor or surviving corporation or
limited liability company or the Subsidiary of which such receiving Subsidiary
is a Subsidiary, (E) the successor or surviving corporation or limited liability
company has assumed all Secured Obligations of the Borrower, in each case
pursuant to agreements in a form reasonably satisfactory to the Administrative
Agent and the Lenders and (F) the Lenders will not recognize income, gain or
loss for federal or income tax purposes as a result of such contribution or
reorganization and will be subject to federal income tax on the same amounts, in
the same manner, and at the same time as would have been the case if such
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contribution or reorganization had not occurred. If the successor or surviving
corporation or limited liability company after a Trust Contribution is not a
Pass Through Entity, the Borrower's ability to make Permitted Tax Distributions
terminates (except with respect to tax distributions in respect of taxable
periods ending on or prior to the date such contribution or reorganization is
effective for relevant tax purposes), other than tax distributions in respect of
beneficiaries' income tax liability that results from the actions comprising
such contribution or reorganization. The Borrower shall deliver to the
Administrative Agent prior to such contribution or reorganization an officers'
certificate covering paragraphs (A) through (F) and the preceding sentence of
this paragraph, stating that such contribution or reorganization and such
agreements comply with this Agreement, and an opinion of counsel covering
paragraphs (A), (D), (E) and (F) above and the preceding sentence of this
paragraph.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all of the assets of the Borrower (other than
the Capital Stock of the Subsidiary which is to receive such contribution from
the Borrower or the Capital Stock of a Subsidiary of which such receiving
Subsidiary is a Subsidiary) in accordance with this Section 6.12 the successor
corporation or limited liability company formed by such consolidation or into or
with which the Borrower is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Agreement
referring to the "Borrower" shall refer instead to the successor corporation or
limited liability company and not to Venture Holdings Trust), and may exercise
every right and power of the Borrower under this Agreement with the same effect
as if such successor person had been named as the Borrower herein, and the
predecessor Borrower shall be relieved from the obligation to pay the
Obligations provided that such predecessor Borrower shall be released from its
obligations on all of its Indebtedness other than Indebtedness in an aggregate
outstanding amount not to exceed $7,500,000.
m. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any
other Person, except:
(a) Sales and other dispositions of inventory in the ordinary
course of business and the sales and other dispositions of
obsolete material or equipment in the ordinary course of
business;
(b) Sales of equipment if 100% of the Net Cash Proceeds from the
sale of any such equipment are used within 360 days of such
sale to purchase equipment of comparable or greater value
which is subject to the lien and security interest of the
Administrative Agent or are used to repay the Loans (and if
any such payment is applied to Revolving Credit Loans, the
Revolving Credit Commitments shall be permanently reduced by
such amount) or, if there are no Loans outstanding, to repay
amounts outstanding under the 1997 Senior Unsecured Notes or
the 1999 Senior Unsecured Notes (and such payment shall not
be considered a Default under Section 6.16), and permanently
reduce the Revolving Credit Commitments by such amounts;
(c) Transfers of assets between Guarantors and between the
Borrower and Guarantors;
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(d) Transfers of assets between Subsidiaries which are not
Guarantors and transfers of assets from any Subsidiaries
which are not Guarantors to any Guarantor or the Borrower.
(e) Transfers of assets pursuant to, and as described in, the
Peguform Restructuring;
(f) Subject to Section 6.11(vi), the sale of receivables in
connection with any receivables factoring arrangement in the
ordinary course of business; and
(g) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as
permitted by this clause (vii) during the twelvemonth period
ending with the month in which any such lease, sale or other
disposition occurs, does not exceed $10,000,000 in aggregate
amount, provided that no such lease, sale or other
disposition may be made if any Default or Unmatured Default
exists or would be caused thereby.
Notwithstanding anything in this Section 6.13 to the contrary, (A) any leases,
sales or other dispositions of the assets (other than as permitted by clauses
(i), (iii), (iv), (v) or (vi) above) of the Borrower and its Subsidiaries which
in the aggregate exceed a Substantial Portion shall not be permitted, (B) no
such leases, sales or other dispositions of Property may be made (other than
pursuant to clause (i) above) if any Default or Unmatured Default has occurred
and is continuing and (c) all leases, sales and other disposition of Property
(other than as permitted by clauses (iii), (iv) and (v) above) at any time shall
be for not less than the fair market value of such Property as determined in
good faith by the Borrower and at least 75% of the consideration therefor
received by the Borrower or such Subsidiary shall be in the form of cash, Cash
Equivalents or the assumption of Indebtedness of the Borrower or its
Subsidiaries (exclusive of any Subordinated Indebtedness or Contingent
Obligations).
n. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments
(including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create
any Subsidiary or to become or remain a partner in any partnership or
Joint Venture, or to make any Acquisition of any Person, except:
(a) Cash Equivalents;
(b) Existing Investments in Subsidiaries and other Investments
in existence on the date hereof and described in Schedule
6.14 hereto;
(c) Advances of Loans and other advances among the Borrower and
its Subsidiaries, subject to the provisions of Section
6.11(v);
(d) Capital contributions by the Borrower or Guarantors to one
or more Subsidiaries which are not Guarantors in aggregate
amount not to exceed the sum of the aggregate amount of
capital contributions to such Subsidiaries required to
complete the Peguform Acquisition and Peguform Restructuring
plus $10,000,000, capital contributions by the Borrower or
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Guarantors to one or more of the other Guarantors and
capital contributions by any Subsidiaries which are not
Guarantors to the Borrower or any Subsidiary;
(e) Acquisitions of any Persons (including Investments made to
accomplish such Acquisitions) if (a) as of the end of the
fiscal quarter of the Borrower immediately preceding any
Acquisition and on a Pro Forma Basis, satisfactory to the
Administrative Agent, after giving effect to the
Acquisition, the Borrower is in compliance with all
covenants contained in this Agreement and no Default or
Unmatured Default then exists, (b) the total consideration
paid or payable for Acquisitions (including all indebtedness
assumed) does not exceed $50,000,000 in an aggregate amount
for all such Acquisitions or $25,000,000 for any single
Acquisition or related series of Acquisitions, and (c) on a
Pro Forma Basis, satisfactory to the Administrative Agent,
giving effect to the Acquisition, the Borrowing Base and the
Aggregate Revolving Credit Commitment each exceeds the
Aggregate Revolving Credit Outstandings by not less than
$20,000,000;
(f) Other Investments in Joint Ventures not to exceed
$20,000,000 in aggregate amount; and
(g) Investments received in connection with the collection or
compromise of accounts receivable or other rights to
payment;
(h) The Peguform Acquisition and the Peguform Restructuring;
(i) Rate Hedging Obligations to the extent permitted hereunder;
and
(j) Other Investments not to exceed $20,000,000 in aggregate
amount.
o. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments, judgments or governmental
charges or levies on its Property if the same shall not at
the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in
accordance with generally accepted principles of accounting
shall have been set aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are
being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on its
books;
(c) Liens arising out of pledges or deposits under worker's
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compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way
affect the marketability of the same or interfere with the
use thereof in the business of the Borrower or the
Subsidiaries;
(e) Liens existing on the date hereof and described on Schedule
6.15 hereto but no increase in the amount secured thereby,
as reduced from time to time, and Liens granted in
connection with any refinancing of such indebtedness
provided that the Liens are on the same assets and the
indebtedness secured is not increased;
(f) Liens in favor of the Administrative Agent, for the benefit
of the Lenders and securing the Secured Obligations, granted
pursuant to any Collateral Document;
(g) Liens in favor of the Borrower or any Guarantor, provided
that such Liens against the Borrower or any Guarantor are
subordinate to all Liens in favor of the Administrative
Agent by written agreement and other documents satisfactory
to the Administrative Agent, and Liens in favor of any
Subsidiary which is not a Guarantor against any Subsidiary
which is not a Guarantor; and
(h) Any Lien to secure payment of a portion of the purchase
price of any tangible fixed asset acquired by the Borrower
or any Guarantor may be created or suffer to exist upon such
fixed asset if the outstanding principal amount of the
Indebtedness is secured by such Lien does not at any time
exceed the purchase price paid for such fixed asset,
provided that such Lien does not encumber any other asset at
any time owned by the Borrower or any Guarantor, and
provided, further, that not more than one such Lien shall
encumber such fixed asset at any one time.
p. Modification and Prepayment of Indebtedness. The Borrower will not,
and will not permit any Subsidiary to, make any amendment or
modification to the indenture, note or other agreement evidencing or
governing any Subordinated Indebtedness or any other Indebtedness
described in Schedule 6.11, including without limitation any 1999
Subordinated Debt Document, any 1999 Senior Unsecured Debt Document,
any 1997 Senior Unsecured Debt Document, which in any case would be
adverse to the Lenders (provided that any modification to the 1997
Senior Unsecured Debt Documents which makes the covenants thereunder
less restrictive on the Borrower shall not be deemed adverse to the
Lenders) or materially more burdensome to the Borrower, or directly or
indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Subordinated
Indebtedness, including without limitation the 1999
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Subordinated Debt, the 1999 Senior Unsecured Notes, the 1997 Senior
Unsecured Notes or any other Indebtedness described on Schedule 6.11.
q. Sale of Accounts. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or
accounts receivable, with or without recourse, other than (i) a sale
by the Borrower to a Wholly-Owned Subsidiary or by any Subsidiary to
the Borrower or to a Wholly-Owned Subsidiary and (ii) in connection
with receivables factoring to the extent permitted by Section
6.11(vi).
r. Financial Contracts. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Financial
Contract, except Rate Hedging Agreements permitted under Section 6.11
and any other Financial Contract not entered into for purpose of
market speculation.
s. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries. The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, assume or suffer to
exist any consensual restriction on the ability of any Subsidiary of
the Borrower to pay dividends or make other distributions to or on
behalf of, or to pay any obligation to or on behalf of, or otherwise
to transfer assets or property to or on behalf of, or make or pay
loans or advances to or on behalf of, the Borrower or any Subsidiary
of the Borrower, except (a) restrictions imposed by this Agreement,
(b) restrictions imposed by applicable law, (c) existing restrictions
under Indebtedness outstanding on the Effective Date specified on
Schedule 6.19, (d) restrictions under any acquired Indebtedness not
incurred in violation of this Agreement or any agreement relating to
any property, asset, or business acquired by the Borrower or any of
its Subsidiaries, which restrictions in each case existed at the time
of an Acquisition, were not put in place in connection with or in
anticipation of such Acquisition and are not applicable to any person,
other than the person acquired, or to any property, asset or business,
other than the property, assets and business so acquired, (e) any such
restriction or requirement imposed by Indebtedness incurred under the
1999 Subordinated Debt Documents, the 1999 Senior Unsecured Debt or
the 1997 Senior Unsecured Debt Documents provided such restriction or
requirement is not materially less favorable than that imposed by this
Agreement, (f) restrictions with respect solely to a Subsidiary of the
Borrower imposed pursuant to a binding agreement which has been
entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Subsidiary, provided such
restrictions apply solely to the Capital Stock or assets of such
Subsidiary, which are being sold, and (g) in connection with and
pursuant to permitted refinancing Indebtedness, replacements of
restrictions imposed pursuant to clauses (a), (c), (d) or (e) of this
paragraph that are not materially less favorable than those being
replaced and do not apply to any other person or assets than those
that would have been covered by the restrictions in the Indebtedness
so refinanced. Notwithstanding the foregoing, customary provisions
restricting subletting or assignment of any lease entered into in the
ordinary course of business, consistent with industry practice shall
not in and of themselves be considered a restriction on the ability of
the applicable Subsidiary to transfer such agreement or assets, as the
case may be.
t. Additional Covenants re: Indebtedness. Except for the agreements and
instruments described in Schedule 6.20, at any time the Borrower or
any Guarantor shall enter into or be a party to any instrument or
agreement, including all such instruments or agreements
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in existence as of the date hereof and all such instruments or
agreements entered into after the date hereof, relating to or amending
any terms or conditions applicable to any of its Indebtedness which
includes covenants, terms, conditions or defaults not substantially
provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the
Borrower shall promptly so advise the Administrative Agent and the
Lenders. Thereupon, if the Administrative Agent shall request, upon
notice to the Borrower, the Administrative Agent and the Lenders shall
enter into an amendment to this Agreement or an additional agreement
(as the Administrative Agent may request), providing for substantially
the same covenants, terms, conditions and defaults as those provided
for in such instrument or agreement to the extent required and as may
be selected by the Administrative Agents. In addition to the
foregoing, any covenants, terms, conditions or defaults in the 1999
Subordinated Debt Documents, the 1999 Senior Unsecured Debt Documents
or the 1997 Senior Unsecured Debt Documents not substantially provided
for in this Agreement, or more favorable to the holders of the 1999
Subordinated Debt, the holders of the 1999 Senior Unsecured Notes or
the holders of the 1997 Senior Unsecured Notes, are hereby
incorporated by reference into this Agreement to the same extent as if
set forth fully herein, (provided that any references in such
covenants as incorporated herein to the "Trustee" shall be deemed
references to the Administrative Agent and any references to the
holders of the debt thereunder shall be deemed references to the
Administrative Agent and the Lenders hereunder), and no subsequent
amendment waiver or modification thereof shall affect any such
covenants, terms, conditions or defaults as incorporated herein,
provided that amendments to the covenants, terms, conditions or
defaults of 1997 Senior Unsecured Debt Documents shall be deemed to
amend such covenants, terms, conditions or defaults of the 1997 Senior
Unsecured Debt Documents as incorporated herein.
u. Nature of Business. The Borrower will not, and will not permit any of
the Subsidiaries, to make or suffer any change in the nature of its
business from that engaged in on the Effective Date or engage in any
other businesses other than those in which it is engaged on the
Effective Date.
v. Operating Leases. The Borrower will not permit the aggregate amount
paid or payable under all Operating Leases of the Borrower and its
Subsidiaries in any consecutive twelve month period to exceed
$35,000,000.
w. Year 2000. The Borrower will take and will cause each of its
Subsidiaries to take all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that Year
2000 Issues will not have a Material Adverse Effect. At the request of
the Administrative Agent or any Lender, the Borrower will provide a
description of the Year 2000 Program, together with any updates or
progress reports with respect thereto.
x. Negative Pledge Limitation. Enter into any agreement with any Person,
other than the Lenders or the Administrative Agent pursuant hereto and
other than the existing provisions of the 1997 Senior Unsecured Debt
Documents, the 1999 Senior Unsecured Debt Documents, the 1999
Subordinated Debt Documents and the agreements listed on Schedule
6.24, without amendment, which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer
to exist any Lien in favor of
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the Administrative Agent and the Lenders upon any of its assets,
rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired.
y. Consolidated Net Worth. The Borrower will maintain Consolidated Net
Worth at all times of not less than the sum of $59,500,000 plus (a)
50% of the consolidated net income (after taxes and Permitted Tax
Distributions) of the Borrower and its Subsidiaries, as determined in
accordance with the Agreement Accounting Principles, such 50% of
consolidated net income to be added as of the end of each fiscal year
of the Borrower, provided that if such income is negative in any
fiscal year, the amount added for such fiscal year shall be zero and
it shall not reduce the amount to be added for any other fiscal year
and (b) 75% of the Net Cash Proceeds from any capital contribution to
the Borrower or the issuance of any Capital Stock of the Borrower.
z. Interest Coverage Ratio. The Borrower will maintain an Interest
Coverage Ratio of at least (a) 2.0 to 1.0 as of September 30, 1999 and
as of the end of each fiscal quarter thereafter through the fiscal
quarter ending March 31, 2000, (b) 2.5 to 1.0 as of June 30, 2000 and
as of the end of each fiscal quarter thereafter through the fiscal
quarter ending April 30, 2001, and (c) 3.0 to 1.0 as of June 30, 2001
and as of the end of each fiscal quarter thereafter.
aa. Fixed Charge Coverage Ratio. The Borrower will maintain a Fixed Charge
Coverage Ratio of at least (a) 1.0 to 1.0 as of June 30, 2000 and (b)
1.05 to 1.0 as of the end of each fiscal quarter thereafter.
bb. Leverage Ratio. The Borrower will maintain a Leverage Ratio of not
more than (i) 5.75 to 1.0 at any time from and including the Effective
Date to and including June 29, 2000, (ii) 4.50 to 1.0 at any time from
and including June 30, 2000 to and including June 29, 2001, (iii) 3.75
to 1.0 at any time from and including June 30, 2001 to and including
June 29, 2002, and (iv) 3.50 to 1.0, at any time thereafter.
7. DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
a. Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the
Administrative Agent under or in connection with this Agreement, any
Loan, any Facility Letter of Credit, or any certificate or information
delivered in connection with this Agreement or any other Loan Document
shall be materially false on the date as of which made.
b. Nonpayment of principal of any Loan or Reimbursement Obligations when
due, or nonpayment of interest upon any Loan or of any commitment fee
or other Obligation under any of the Loan Documents within five days
after the same becomes due.
c. The breach by the Borrower or any of its Subsidiaries of any of the
terms or provisions of Article VI, other than Sections 6.1, 6.5, 6.7,
6.8, 6.15 and 6.22.
d. The breach by the Borrower or any Subsidiary (other than a breach
which constitutes a Default under Section 7.1, 7.2 or 7.3) of any of
the terms or provisions of, or any other default under, this Agreement
or any other Loan Document which is not remedied within
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ten days after written notice from the Administrative Agent.
e. Failure of the Borrower or any of its Subsidiaries to pay when due any
Indebtedness aggregating in excess of $7,500,000 ("Material
Indebtedness"); or the default by the Borrower or any of its
Subsidiaries in the performance of any term, provision or condition
contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or
condition exist, the effect of which is to cause, or to permit the
holder or holders of such Material Indebtedness to cause, such
Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of the Borrower or any of its Subsidiaries
shall be declared in default or declared to be due and payable or
required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing
its inability to pay, its debts generally as they become due.
f. The Borrower or any of its Significant Subsidiaries shall (i) have an
order for relief entered with respect to it under the Federal
bankruptcy laws or under any other bankruptcy, insolvency or similar
law (whether under any U.S. or non-U.S. law) as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official
for it or any Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy
laws or under any other bankruptcy, insolvency or similar law (whether
under any U.S. or non-U.S. law) as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations
of any such proceeding filed against it, (v) take any action to
authorize or effect any of the foregoing actions set forth in this
Section 7.6 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.7.
g. Without the application, approval or consent of the Borrower or any of
its Significant Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or
any of its Significant Subsidiaries or any material portion of its
Property, or a proceeding described in Section 7.6 (iv) shall be
instituted against the Borrower or any of its Significant Subsidiaries
and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive days.
h. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of the Borrower
and its Subsidiaries which, when taken together with all other
Property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelvemonth
period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
i. The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $7,500,000 or the Dollar Equivalent thereof in
any currency, which is not stayed on
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appeal or otherwise being appropriately contested in good faith.
j. The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $5,000,000, the unfunded liabilities under all Foreign
Plans shall exceed in the aggregate $50,000,000, or any Reportable
Event shall occur in connection with any Plan, in each case which is
not remedied within ten days after written notice from the
Administrative Agent.
k. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount
which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower or any other member of the
Controlled Group as withdrawal liability (determined as of the date of
such notification), exceeds $2,500,000 or requires payments exceeding
$2,500,000 per annum.
l. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of
the Borrower and the other members of the Controlled Group (taken as a
whole) to all Multiemployer Plans which are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the respective plan years
of each such Multiemployer Plan immediately preceding the plan year in
which the reorganization or termination occurs by an amount exceeding
$2,500,000.
m. The Borrower or any of its Subsidiaries shall be the subject of any
proceeding or proceedings pertaining to the release by the Borrower or
any of its Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, or any violation of any
federal, state or local or foreign environmental, health or safety law
or regulation, which, in either case, could reasonably be expected to
have a Material Adverse Effect.
n. Except as otherwise permitted hereunder, any Guaranty shall fail to
remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms
or provisions of any Guaranty to which it is a party, or any Guarantor
denies that it has any further liability under any Guaranty to which
it is a party, or gives notice to such effect.
o. Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any collateral
purported to be covered thereby, except as permitted by the terms of
any Collateral Document, or any Collateral Document shall fail to
remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any
Collateral Document, or the Borrower or any Subsidiary shall fail to
comply with any of the terms or provisions of any Collateral Document.
p. The representations and warranties set forth in "Section 5.15 Plan
Assets; Prohibited Transactions" shall at any time not be true and
correct.
q. The Borrower or any Subsidiary shall fail to pay when due any amount
due under, or the breach by the Borrower or any Subsidiary of any
term, provision or condition contained in, any Rate Hedging
Obligation, Operating Lease, Letter of Credit, obligation under sale
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and leaseback transaction or Contingent Obligation.
r. (i) the Peguform Acquisition shall be unwound, reversed or otherwise
rescinded in whole or in any material part for any reason, or (ii) the
Borrower shall agree to any material amendment to, or waiver of any
material rights under, or otherwise change any material terms of, any
of the Peguform Acquisition Document, in a manner adverse to the
Borrower or any of its Subsidiaries or to Lenders without the prior
written consent of Administrative Agent.
s. The Borrower shall not become a corporation or a limited liability
company in accordance with the provisions of Section 6.12 and the
definition of Borrower on or before seven Business Days after the
Effective Date.
t. The Borrower shall fail to issue the Additional Subordinated Notes in
the face amount of at least $125,000,000 on or before November 30,
2000 and receive the Net Cash Proceeds thereof.
8. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
a. Acceleration.
(1) If any Default described in Section 7.6 or 7.7 occurs, (i)
the Revolving Credit Commitment shall automatically
terminate and the Obligations shall immediately become due
and payable without presentment, demand, protest or notice
of any kind, all of which the Borrower hereby expressly
waives and without any election or action on the part of the
Administrative Agent or any Lender and (ii) the Borrower
will be and become thereby unconditionally obligated,
without the need for demand or the necessity of any act or
evidence, to deliver to the Administrative Agent, at its
address specified pursuant to Article XIII, for deposit into
the Letter of Credit Collateral Account, an amount (the
"Collateral Shortfall Amount") equal to the excess, if any,
of
(a) 100% of the sum of the aggregate maximum amount
remaining available to be drawn under the Facility
Letters of Credit (assuming compliance with all
conditions for drawing thereunder) issued by Issuer
outstanding as of such time, over
(b) the amount on deposit in the Letter of Credit
Collateral Account at such time that is free and clear
of all rights and claims of third parties and that has
not been applied by the Lenders against the
Obligations.
(2) If any Default occurs and is continuing (other than a
Default described in Section 7.6 or 7.7), (i) the Required
Revolving Credit Lenders may terminate or suspend the
Revolving Credit Commitments, (ii) the Required Lenders may
declare the Obligations to be due and payable, whereupon the
Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind,
all of which the Borrower hereby expressly waives and (iv)
the Required Lenders
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may, upon notice delivered to the Borrower and in addition
to the continuing right to demand payment of all amounts
payable under this Agreement, make demand on the Borrower to
deliver (and the Borrower will, forthwith upon demand by the
Required Lenders and without necessity of further act or
evidence, be and become thereby unconditionally obligated to
deliver), to the Administrative Agent, at its address
specified pursuant to Article XIII, for deposit into the
Letter of Credit Collateral Account an amount equal to the
Collateral Shortfall Amount.
(3) If at any time while any Default is continuing, the
Administrative Agent determines that the Collateral
Shortfall Amount at such time is greater than zero, the
Administrative Agent may make demand on the Borrower to
deliver (and the Borrower will, forthwith upon demand by the
Administrative Agent and without necessity of further act or
evidence, be and become thereby unconditionally obligated to
deliver), to the Administrative Agent as additional funds to
be deposited and held in the Letter of Credit Collateral
Account an amount equal to such Collateral Shortfall Amount
at such time.
(4) The Administrative Agent may at any time or from time to
time after funds are deposited in the Letter of Credit
Collateral Account, apply such funds to the payment of the
Obligations and any other amounts as shall from time to time
have become due and payable by the Borrower to the Lenders
under the Loan Documents.
(5) Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of
the funds held in the Letter of Credit Collateral Account.
After all of the Obligations have been indefeasibly paid in
full, any funds remaining in the Letter of Credit Collateral
Account shall be returned by the Administrative Agent to the
Borrower or paid to whoever may be legally entitled thereto
at such time.
(6) The Administrative Agent shall exercise reasonable care in
the custody and preservation of any funds held in the Letter
of Credit Collateral Account and shall be deemed to have
exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative
Agent accords its own property, it being understood that the
Administrative Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any
Persons with respect to any such funds.
b. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Administrative Agent with the consent in
writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or modifying
any provisions to the Loan Documents or changing in any manner the
rights of the Lenders or the Borrower under the Loan Documents or
waiving any Default hereunder; provided, however, (a) no such
supplemental agreement shall, without the consent of the Required
Revolving Credit Lenders, allow the Borrower to obtain a
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Revolving Credit Loan or Facility Letter of Credit if it would
otherwise be unable to absent such supplemental agreement, (b) no such
supplemental agreement shall, without the consent of the Required Term
Loan A Lenders, waive or amend any condition to the making of any Term
Loan A, (c) no such supplemental agreement shall, without the consent
of the Required Term Loan B Lenders, waive or amend any condition to
the making of any Term Loan B or Section 2.23.3, (d) no such
supplemental agreement shall, without the consent of the Required
Interim Loan Lenders, waive or amend any condition to the making of
any Interim Term Loan, and (e) prior to any Lender other than First
Chicago being a Lender hereunder, the Borrower will not withhold its
consent to any amendment to this Agreement or any Loan Documents
determined by the Administrative Agent as necessary to syndicate a
portion of the Commitments and Advances hereunder to additional
Lenders, and provided, further, that no such supplemental agreement
shall, without the consent of each Lender affected thereby:
(a) Extend the maturity of any Loan or any Note or postpone or
reduce any regularly scheduled payment of principal of any
Loan or forgive all or any portion of the principal amount
thereof, or reduce the rate or extend the time of payment of
interest or fees thereon.
(b) Reduce the percentage specified in the definition of
Required Lenders, Required Revolving Credit Lenders,
Required Interim Term Loan Lenders, Required Term Loan A
Lenders or Required Term Loan B Lenders.
(c) Extend the Termination Date or increase the amount of the
Commitment of any Lender hereunder, or permit the Borrower
to assign its rights under this Agreement.
(d) Amend this Section 8.2.
(e) Release the Borrower or any Guarantor or, except as provided
herein or in the Collateral Documents, release all or
substantially all of the Collateral.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. The Administrative Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party to this
Agreement. Notwithstanding anything herein to the contrary, any Defaulting
Lender shall not be entitled to vote (whether to consent or to withhold its
consent) with respect to any amendment, modification, termination or waiver and,
for purposes of the determining the Required Lenders, the Revolving Credit
Commitments and the Loans of such Defaulting Lender shall be disregarded and the
Administrative Agent shall have the ability, but not the obligation, to replace
any such Defaulting Lender with another lender or lenders.
c. Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default
or an acquiescence therein, and the making of a Loan notwithstanding
the existence of a Default or the inability of the Borrower to satisfy
the conditions precedent to such Loan shall not constitute any waiver
or
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acquiescence. Any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically
set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the
Administrative Agent and the Lenders until the Obligations have been
paid in full.
9. GENERAL PROVISIONS
a. Survival of Representations. All representations and warranties of the
Borrower and each Guarantor contained in this Agreement shall survive
delivery of the Notes and the making of the Loans herein contemplated.
b. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend
credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
c. Taxes. Any taxes (excluding federal and state income taxes on the
overall net income of any Lender and intangible taxes) or other
similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by the
Borrower, together with interest and penalties, if any.
d. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
e. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Guarantors, the Administrative
Agent and the Lenders and supersede all prior agreements and
understandings among the Borrower, the Guarantors, the Administrative
Agent and the Lenders relating to the subject matter thereof other
than, with respect to agreements between the Borrower and the
Administrative Agent, any fee agreement described in Section 10.13 or
other fee letters and commitment letters among the Administrative
Agent and the Borrower.
f. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the
extent to which the Administrative Agent is authorized to act as
such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
g. Expenses; Indemnification. The Borrower shall reimburse (i) the
Administrative Agent for any costs, internal charges and reasonable
and documented outofpocket expenses (including reasonable attorneys'
fees and time charges of attorneys for the Administrative Agent, which
attorneys may be employees of the Administrative Agent) paid or
incurred by the Administrative Agent in connection with the
preparation, review, execution, delivery, amendment, modification and
administration of the Loan
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Documents and (ii) the Administrative Agent, the Issuer and the
Lenders for any costs, internal charges and reasonable and documented
outofpocket expenses (including attorneys' fees and time charges of
attorneys for the Administrative Agent, the Issuer and the Lenders,
which attorneys may be employees of the Administrative Agent, the
Issuer or the Lenders) paid or incurred by the Administrative Agent,
the Issuer or any Lender in connection with the collection and
enforcement of the Loan Documents, any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of
a "workout" or any insolvency or bankruptcy proceedings in respect of
the Borrower or any Subsidiary. Expenses being reimbursed by the
Borrower under this Section include, without limitation, the cost and
expense of obtaining an appraisal of each parcel of real Property or
interest in real Property described in the relevant Collateral
Documents, which appraisal shall be in conformity with the applicable
requirements of any law or any governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or
any interpretation thereof, including, without limitation, the
provisions of Title XI of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as amended, reformed or otherwise
modified from time to time, and any rules promulgated to implement
such provisions. The Borrower further agrees to indemnify and hold
harmless the Administrative Agent, the Issuer, each Lender and their
respective directors, officers and employees against all losses,
claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or
preparation therefor whether or not the Administrative Agent or any
Lender is a party thereto) arising at any time, and including without
limitation due to any actions or omissions before, on or after the
Effective Date, which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, the Peguform
Acquisition, the Peguform Acquisition Documents, any other
Acquisition, any matters relating to any Environmental Laws with
respect to any property of the Borrower or any Guarantor, the
transactions contemplated hereby or thereby, or the direct or indirect
application or proposed application of the proceeds of any Advance
hereunder, excluding any such losses, claims, damages, penalties,
judgments, liabilities and expenses which result from the gross
negligence or willful misconduct of the Administrative Agent, the
Issuer or any Lender as finally determined by a court of competent
jurisdiction. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
h. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish
one to each of the Lenders.
i. Accounting; Interpretation. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance with
Agreement Accounting Principles, except that any calculation or
determination which is to be made on a consolidated basis shall be
made for the Borrower and all its Subsidiaries, including those
Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements. In the event that the Borrower or the
Required Lenders believe that there has been a change in generally
accepted accounting principles from those utilized in preparing the
financial statements referred to in Section 5.4 which materially
affect (whether favorably or adversely)
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compliance under Article VI of this Agreement, each of the Lenders and
the Borrower agrees to negotiate an amendment to this Agreement to
bring the Borrower into substantially the same compliance with respect
to Article VI immediately preceding such change in generally accepted
accounting principles. If no resolution of such item or items of
compliance is effected, the Borrower and the Lenders agree, for the
purposes of the disputed item or items only, to determine compliance
by using Agreement Accounting Principles. All financial covenants
hereunder shall be calculated on a Pro Forma Basis acceptable to the
Administrative Agent except to the extent otherwise required
hereunder. The Borrower will not change its fiscal year. For purposes
of Article VI and VII (including any baskets or limitations expressed
in Dollars therein) of this Agreement, any Indebtedness, Investment or
other amount made, outstanding or incurred in any currency other than
Dollars shall be deemed to be the Dollar Equivalent thereof. The
Borrower further agrees to take all necessary and reasonable action to
permit the Administrative Agent and the Lenders to rely on the audited
financial statements of the Borrower and its Subsidiaries, including
without limitation obtaining any acknowledgements or other consents
from the Borrower's auditors as may be required under applicable law
and are customarily available.
j. Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that
provision in any other jurisdiction, and to this end the provisions of
all Loan Documents are declared to be severable.
k. Nonliability of Lenders. The relationship between the Borrower and the
Lenders and the Administrative Agent shall be solely that of borrower
and lender. Neither the Administrative Agent nor any Lender shall have
any fiduciary responsibilities to the Borrower. Neither the
Administrative Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's or any Guarantor's
business or operations. The Borrower and each Guarantor agree that
neither the Administrative Agent nor any Lender shall have liability
to the Borrower or any Guarantor (whether sounding in tort, contract
or otherwise) for losses suffered by the Borrower or any Guarantor in
connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection
therewith, unless it is determined by a court of competent
jurisdiction in a final and non-appealable order that such losses
resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Administrative Agent nor
any Lender shall have any liability with respect to, and the Borrower
and each Guarantor hereby waives, releases and agrees not to sue for,
any special, indirect or consequential damages suffered by the
Borrower or any Guarantor in connection with, arising out of, or in
any way related to the Loan Documents or the transactions contemplated
thereby.
l. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any Margin Stock for the repayment of the Loans provided
for herein.
m. Confidentiality. Each of the Lenders and the Administrative Agent
hereby agrees that it
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will use reasonable efforts (e.g., procedures substantially comparable
to those applied by such Lender and the Administrative Agent in
respect of nonpublic information as to the business of such Lender or
the Administrative Agent) to keep confidential any financial reports
and other information previously or from time to time supplied to it
by the Borrower hereunder to the extent that such information is not
and does not become publicly available through or with the consent or
acquiescence of the Borrower and will use such financial reports and
other information only in connection with the transactions
contemplated by this Agreement and for no other purpose, provided that
nothing herein shall affect the disclosure of any such information (i)
by the Administrative Agent to any Lender, (ii) to the extent required
by law (including statute, rule, regulation or judicial process),
(iii) to counsel for any Lender, the Administrative Agent or to their
respective accountants, each of whom shall also be bound by the
confidentiality obligations set forth herein, (iv) to bank examiners
and auditors and appropriate government examining authorities, (v) to
any Administrative Agent or to any other Lender, (vi) to the extent
necessary or appropriate in connection with any litigation to which
any Lender or the Administrative Agent is a party. A determination by
a Lender or the Administrative Agent as to the application of the
circumstances described in the foregoing clauses (i)(v) shall be
conclusive if made in good faith.
n. Limitation of Liabilities. The Borrower (i) agrees that neither the
Administrative Agent nor any Lender shall have any liability to the
Borrower or any of its Subsidiaries (whether sounding in tort,
contract or otherwise) for losses suffered by the Borrower or any of
its Subsidiaries in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined by a
judgment of a court that is binding on the Administrative Agent, or
such Lender, and that is final and not subject to review on appeal,
that such losses were the result of acts or omissions on the part of
the Administrative Agent or such Lender, as the case may be,
constituting gross negligence, willful misconduct or knowing
violations of law and (ii) waives, releases and agrees not to sue upon
any claim against the Administrative Agent or any Lender (whether
sounding in tort, contract or otherwise) except a claim based upon
gross negligence, willful misconduct or knowing violations of law.
Whether or not such damages are related to a claim that is subject to
the waiver effected above and whether or not such waiver is effective,
neither the Administrative Agent nor any Lender shall have any
liability with respect to, and the Borrower and each of its
Subsidiaries hereby waives, releases and agrees not to sue upon any
claim for, any special, indirect or consequential damages suffered by
the Borrower or any of its Subsidiaries in connection with, arising
out of, or in any way related to the transactions contemplated or the
relationship established by the Loan Documents, or any act, omission
or event occurring in connection therewith.
10. THE ADMINISTRATIVE AGENT
a. Appointment; Nature of Relationship. First Chicago is hereby appointed
by the Lenders as the Administrative Agent hereunder and under each
other Loan Document, and each
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of the Lenders irrevocably authorizes the Administrative Agent to act
as the contractual representative of such Lender with the rights and
duties expressly set forth herein and in the other Loan Documents. The
Administrative Agent agrees to act as such contractual representative
upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent," it
is expressly understood and agreed that the Administrative Agent shall
have not have any fiduciary responsibilities to any Lender by reason
of this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the
Lenders' contractual representative, the Administrative Agent (i) does
not hereby assume any fiduciary duties to any of the Lenders, (ii) is
a "representative" of the Lenders within the meaning of Section 9-105
of the Uniform Commercial Code and (iii) is acting as an independent
contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents.
Each of the Lenders hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.
b. Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such
powers as are reasonably incidental thereto. The Administrative Agent
shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Administrative
Agent.
c. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the
Borrower, the Lenders or any Lender for any action taken or omitted to
be taken by it or them hereunder or under any other Loan Document or
in connection herewith or therewith except for its or their own gross
negligence or willful misconduct.
d. No Responsibility for Loans, Recitals, etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under
any Loan Document, including, without limitation, any agreement by an
obligor to furnish information directly to each Lender; (iii) the
satisfaction of any condition specified in Article IV, except receipt
of items required to be delivered to the Administrative Agent; (iv)
the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing
furnished in connection therewith; or (v) the value, sufficiency,
creation, perfection or priority of any interest in any collateral
security. The Administrative Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the
Borrower or any Guarantor to the Administrative Agent at such time,
but is voluntarily furnished by the Borrower or any Guarantor to the
Administrative Agent (either in its capacity as Administrative Agent
or in its individual capacity).
e. Action on Instructions of Lenders. The Administrative Agent shall in
all cases be fully
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protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed
by the Required Lenders or the Required Revolving Credit Lenders, as
the case may be, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders and on
all holders of Notes. The Lenders hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this
Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders or the Required Revolving
Credit lenders, as the case may be. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder
and under any other Loan Document unless it shall first be indemnified
to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
f. Employment of Administrative Agents and Counsel. The Administrative
Agent may execute any of its duties as Administrative Agent hereunder
and under any other Loan Document by or through employees, agents, and
attorneysinfact and shall not be answerable to the Lenders, except as
to money or securities received by it or its authorized agents, for
the default or misconduct of any such agents or attorneysinfact
selected by it with reasonable care. The Administrative Agent shall be
entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any other
Loan Document.
g. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by
it to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel
may be employees of the Administrative Agent.
h. AdministrativeAgent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Revolving Credit Commitments (or, if
the Revolving Credit Commitments have been terminated, in proportion
to their Revolving Credit Commitments immediately prior to such
termination) (i) for any amounts not reimbursed by the Borrower for
which the Administrative Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other expenses
incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, provided that no
Lender shall be liable for any of the foregoing to the extent they
arise from the gross negligence or willful misconduct of the
Administrative Agent. The obligations of the Lenders under this
Section 10.8 shall survive payment of the Obligations and termination
of this Agreement.
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i. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Administrative Agent has received written
notice from a Lender or a Borrower referring to this Agreement
describing such Default or Unmatured 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
prompt notice thereof to the Lenders.
j. Rights as a Lender. In the event the Administrative Agent is a Lender,
the Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may
exercise the same as though it were not the Administrative Agent, and
the term "Lender" or "Lenders" shall, at any time when the
Administrative Agent is a Lender, unless the context otherwise
indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to
remain a Lender.
k. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or
any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative 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 decisions in taking or not taking action under
this Agreement and the other Loan Documents.
l. Successor Administrative Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a
successor Administrative Agent or, if no successor Administrative
Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign. Upon any
such resignation, the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders within thirty days after the
resigning Administrative Agent's giving notice of its intention to
resign, then the resigning Administrative Agent may appoint, on behalf
of the Borrower and the Lenders, a successor Administrative Agent. If
the Administrative Agent has resigned and no successor Administrative
Agent has been appointed, the Lenders may perform all the duties of
the Administrative Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender and
for all other purposes shall deal directly with the Lenders. No
successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a
commercial bank having capital and retained earnings of at least
$50,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent,
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such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
the resigning Administrative Agent. Upon the effectiveness of the
resignation of the Administrative Agent, the resigning Administrative
Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the
resignation of an Administrative Agent, the provisions of this Article
X shall continue in effect for the benefit of such Administrative
Agent in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent hereunder and under
the other Loan Documents.
m. Administrative Agent's Fee. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees agreed to by the
Borrower and the Administrative Agent from time to time.
n. Collateral Management. The Administrative Agent is hereby authorized
on behalf of all of the Lenders, without the necessity of any further
consent from any Lender, from time to time prior to a Default, to take
any action with respect to the Collateral or the Collateral Documents
which may be necessary (i) to perfect and maintain perfected the
security interest in and liens upon the Collateral granted pursuant to
the Security Agreement and the other Collateral Documents; and (ii) to
release portions of the Collateral from the security interests and
liens imposed by the Collateral Documents in connection with any
dispositions of such portions of the Collateral permitted hereby. In
the event that the Borrower or Guarantors desire to sell or otherwise
dispose of any assets and such sale or disposition is permitted
hereby, the Administrative Agent shall, upon timely notice from the
Borrower, release such portions of the Collateral from the security
interests and liens imposed by the Collateral Documents as may be
specified by the Borrower or Guarantors in order for the relevant
Borrower or Guarantor to consummate such proposed sale or disposition,
provided that at or prior to the time of such proposed sale or
disposition no Default or Unmatured Default shall have occurred and be
continuing, including, without limitation, any Unmatured Default or
Default that would arise upon consummation of such sale or
disposition. For purposes of the preceding sentence, the Borrower
shall give timely notice if, not less than two Business Days prior to
the date of such proposed sale or disposition, it shall furnish to the
Administrative Agent an officers' certificate setting forth in
reasonable detail the circumstances of such proposed sale or
disposition.
o. Right to Indemnity. The Administrative Agent shall be fully justified
in failing or refusing to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.
p. Other Agents. No Lender identified on the facing page of this
Agreement or otherwise designated pursuant hereto at any time as
"Documentation Agent" or "Syndication Agent" shall have any right,
power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as Lenders.
Without limiting the foregoing, no Lender so identified as a
"Documentation Agent" or "Syndication Agent" or the Arranger shall
have or be deemed to have any fiduciary relationship with any Lender.
Each Lender acknowledges that it has not relied, and will not rely, on
any Lender so identified or the Arranger in deciding to enter into
this Agreement or in taking
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or not taking action hereunder, and any Lender so identified and the
Arranger shall be entitled to the same indemnifications and other
protections as provided in this Article X for the Administrative
Agent.
11. SETOFF; RATABLE PAYMENTS
a. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower or any Guarantor becomes
insolvent, however evidenced, or any Default occurs, any and all
deposits (including all account balances, whether provisional or final
and whether or not collected or available) and any other Indebtedness
at any time held or owing by any Lender to or for the credit or
account of the Borrower and each Guarantor may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part hereof, shall then be due.
b. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received
pursuant to Section 3.1, 3.2 or 3.4) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders
so that after such purchase each Lender will hold its ratable
proportion of Loans. If any Lender, whether in connection with setoff
or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in
the benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
12. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
a. Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i)
the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any
Lender must be made in compliance with Section 12.3.Notwithstanding
clause (ii) of this Section, (i) any Lender may at any time, without
the consent of the Borrower or the Administrative Agent, pledge or
assign all or any portion of its rights under this Agreement and any
Notes to a Federal Reserve Bank, and (ii) any Lender which is a fund
or commingled investment vehicle that invests in commercial loans in
the ordinary course of its business may at any time, without the
consent of the Borrower or the Administrative Agent, pledge or assign
all or any part of its rights under this Agreement to a trustee or
other representative of holders of obligations owed or securities
issued by such Lender as collateral to secure such obligations or
securities; provided, however, that no such assignment shall release
the transferor Lender from its obligations hereunder. The
Administrative Agent may treat the payee of any Note as the owner
thereof for all
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purposes hereof unless and until such payee complies with Section 12.3
in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the
Administrative Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who
at the time of making such request or giving such authority or consent
is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note
or Notes issued in exchange therefor.
b. Participations.
i. Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business 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 Note held by such Lender, any Revolving Credit
Commitment of such Lender or any other interest of such Lender
under the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall
remain the holder of any such Note for all purposes under the
Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, 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 the
Loan Documents.
ii. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents
other than any amendment, modification or waiver with respect to
any Loan or Revolving Credit Commitment in which such Participant
has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable with respect to any
such Loan or Revolving Credit Commitment, postpones any date
fixed for any regularlyscheduled payment of principal of, or
interest or fees on, any such Loan or Revolving Credit
Commitment, releases any guarantor of any such Loan or releases
any substantial portion of collateral, if any, securing any such
Loan.
iii. Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender
under the Loan Documents, provided that without duplication, each
Lender shall retain the right of setoff provided in Section 11.1
with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of
setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Section
11.2 as if each Participant were a Lender.
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c. Assignments.
i. Permitted Assignments. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan
Documents. Such assignment shall be substantially in the form of
Exhibit K hereto or in such other form as may be agreed to by the
parties thereto. The consent of the Administrative Agent, and
provided that no Default or Unmatured Default shall have occurred
and be continuing and such assignment is not to an existing
Lender or an Affiliate of an existing Lender, the consent of the
Borrower (which consent shall not be unreasonably withheld or
delayed) shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof. Each such assignment shall be in an amount not
less than the lesser of (i) $5,000,000, or $2,500,000 in the case
of assignments of Term Loan B, or any amount in the case of
assignments to other Lenders, or (ii) the remaining amount of the
assigning Lender's Commitments (calculated as at the date of such
assignment) or such other amount agreed to by the Administrative
Agent and, with the consent of the Administrative Agent, such
assignments may be of any one or more of the Commitments of any
Lender.
ii. Effect; Effective Date. Upon (i) delivery to the Administrative
Agent of a notice of assignment, substantially in the form
attached as Exhibit L hereto (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (ii) payment of
a $3,500 fee to the Administrative Agent for processing such
assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment, provided
that the effective date shall be at least five Business Days
after delivery to the Administrative Agent of such notice of
assignment unless otherwise agreed to by the Administrative
Agent. The Notice of Assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used
to make the purchase of the Revolving Credit Commitment and Loans
under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by
the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were
an original party hereto, and no further consent or action by the
Borrower, the Lenders or the Administrative Agent shall be
required to release the transferor Lender with respect to the
percentage of the Aggregate Revolving Credit Commitment and Loans
assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Administrative Agent and the Borrower
shall make appropriate arrangements so that replacement Notes, if
any, are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their Revolving Credit
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Commitment, and in exchange for the existing Notes which are
being replaced, as adjusted pursuant to such assignment.
d. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information
in such Lender's possession concerning the creditworthiness of the
Borrower and its Subsidiaries; provided that each Transferee and
prospective Transferee agrees to be bound by Section 9.13 of this
Agreement.
e. Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction
other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of
Section 3.6.
13. NOTICES
a. Notices. Except as otherwise permitted hereunder with respect to
borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including bank wire,
facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Administrative Agent, at
its address or facsimile number set forth on the signature pages
hereof, (y) in the case of any Lender, at its address or facsimile
number set forth below its signature hereto or (z) in the case of any
party, such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by
mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given
by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under
Article II shall not be effective until received.
b. Change of Address. The Borrower, the Administrative Agent and any
Lender may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.
14. CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
a. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF MICHIGAN.
b. CONSENT TO JURISDICTION. THE BORROWER AND EACH GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR MICHIGAN STATE COURT SITTING IN
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DETROIT IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE ANY OBJECTION THEY
MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER OR ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER OR ANY GUARANTOR AGAINST THE
ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE
ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT,
MICHIGAN.
c. WAIVER OF JURY TRIAL. THE BORROWER, EACH GUARANTOR, THE ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
15. MISCELLANEOUS
a. Execution by Guarantors. The Guarantors are joining in the execution
of this Agreement for the purpose of acknowledging and agreeing to the
terms hereof and confirming the Guaranty with respect to all of the
Secured Obligations, and all other obligations to be observed or
performed by the Guarantors in connection with this Agreement.
b. Counterparts This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement shall be effective when
it has been executed by the Borrower, the Administrative Agent and
Lenders and each party has notified the Administrative Agent by telex
or telephone, that it has taken such action. Upon receipt of such
notification by each of the other parties, the Administrative Agent
shall insert the Effective Date in the final paragraph of this
Agreement.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of May 27, 1999 which shall be the
Effective Date.
BORROWER:
VENTURE HOLDINGS TRUST
By: /s/ James E. Butler
-----------------------------------
Print Name: James E. Butler
Title: Executive Vice President
Address for notices for the Borrower:
33662 James J. Pompo Dr.
Fraser, Michigan 48026
Attention: President
Telephone: (810) 294-1500
Telecopy: (810) 294-1960
GUARANTORS:
VEMCO, INC.
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VEMCO LEASING, INC.
103
<PAGE> 104
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE INDUSTRIES CORPORATION
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE HOLDINGS CORPORATION
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
104
<PAGE> 105
VENTURE LEASING COMPANY
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE MOLD & ENGINEERING COMPANY
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE SERVICE COMPANY
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE EUROPE, INC.
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE EU CORPORATION
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
VENTURE HOLDINGS COMPANY LLC
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
EXPERIENCE MANAGEMENT LLC
By: /s/ James E. Butler
-----------------------------------
Title: Executive Vice President
----------------------------
105
<PAGE> 106
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent and a Lender
By: /s/ Erik W. Bakker
-----------------------------------
Print Name: Erik W. Bakker
Title: First Vice President
611 Woodward Avenue
Detroit, Michigan 48226
Attention:
Telephone: (313) 225-2979
Telecopy: (313) 225-2290
106
<PAGE> 1
EXHIBIT 10.1.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of June 4, 1999 (this
"Amendment"), is among Venture Holdings Company LLC, a Michigan limited
liability company, as successor Borrower to Venture Holdings Trust under the
Credit Agreement (the "Borrower"), the lenders set forth on the signature pages
hereof (collectively, the "Lenders"), and The First National Bank of Chicago, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
RECITAL
The Borrower, the Administrative Agent and the Lenders are parties to a
Credit Agreement dated as of May 27, 1999 (the "Credit Agreement"). The Borrower
and the Guarantors desire to amend the Credit Agreement and the Agent and the
Lenders are willing to do so strictly in accordance with the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE 1.
AMENDMENTS
The Credit agreement is amended as follows:
1.1 The following definitions in Section 1.1 are amended as follows: (a)
the definition of "Aggregate Revolving Credit Commitment" is amended by deleting
reference therein to "$200,000,000" and substituting "$175,000,000" in place
thereof, (b) the definition of "Aggregate Term Loan A Commitment" is amended by
deleting reference therein to "$100,000,000" and substituting "$75,000,000" in
place thereof, (c) the definition of "Aggregate Term Loan B Commitment" is
amended by deleting reference there in to "$150,000,000" and substituting
"$200,000,000" in place thereof, (d) the definition of "Eligible Accounts
Receivable" is amended by restating clause (a) thereof as follows: "(a) that is
outstanding more than 90 days after the earlier of the date of the related
invoice or the date the related goods were shipped or service is provided, that
is due from any Affiliate of the Borrower or that is unbilled," and (e) the
definition of "Pro Rata Share" is amended by deleting reference therein to
"2.5(b)" and substituting "2.6(b)" in place thereof.
<PAGE> 2
The following definitions are added to Section 1.1 in appropriate alphabetical
order: (i) "Term Loans" means Term Loan A, Term Loan B and the Interim Term
Loan; and (ii) "Multicurrency Loans" means Multicurrency Revolving Credit Loans.
1.2 Each reference in Sections 2.1(c) and 2.1(d)(i) to "$15,000,000" is
deleted and "$20,000,000" is substituted in each place thereof.
1.3 Section 2.1(c) is amended by deleting the word "and" before clause
(iii) thereof and adding the following to the end thereof: ", (iv) the Dollar
Equivalent of the Aggregate Multicurrency Revolving Credit Outstandings of all
Multicurrency Revolving Credit Lenders will not exceed the amount of the
Multicurrency Revolving Credit Commitments that the Borrower has designated to
the Administrative Agent as activated (the "Activated Aggregate Multicurrency
Revolving Commitments"), which activation or deactivation shall be in increments
of $25,000,000, shall be effective five Business Days after notification by the
Borrower to the Administrative Agent and shall not be reduced below the Dollar
Equivalent of the Aggregate Multicurrency Revolving Credit Outstandings of all
Multicurrency Revolving Credit Lenders, and (v) the Dollar Revolving Credit
Loans will not exceed the difference of the Aggregate Revolving Credit
Commitments minus the amount of the Activated Aggregate Multicurrency Revolving
Credit Commitment."
1.4 Sections 2.9.2 and 2.9.3 are restated as follows:
2.9.2. Term Loan A. The Borrower hereby unconditionally promises to
pay to the Administrative Agent for the pro rata account of each Term Loan
A Lender in Dollars the unpaid principal amount of each Term Loan A of such
Lender in twenty quarterly principal payments as follows:
<TABLE>
<CAPTION>
Payment Date Principal Installment
- ------------ ---------------------
<S> <C>
September 30, 1999 $525,000
December 31, 1999 $525,000
March 31, 2000 $525,000
June 30, 2000 $525,000
September 30, 2000 $3,375,000
December 31, 2000 $3,375,000
March 31, 2001 $3,375,000
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
June 30, 2001 $3,375,000
September 30, 2001 $4,125,000
December 31, 2001 $4,125,000
March 31, 2002 $4,125,000
June 30, 2002 $4,125,000
September 30, 2002 $4,875,000
December 31, 2002 $4,875,000
March 31, 2003 $4,875,000
June 30, 2003 $4,875,000
September 30, 2003 $5,850,000
December 31, 2003 $5,850,000
March 31, 2004 $5,850,000
May 27, 2004 $5,850,000
</TABLE>
On the Term Loan A Maturity Date each Term Loan A shall be paid in full.
2.9.3. Term Loan B. The Borrower hereby unconditionally promises to
pay to the Administrative Agent for the pro rata account of each Term Loan
B Lender in Dollars the unpaid principal amount of Term Loan B of such
Lender in twenty-three quarterly principal payments on the last day of each
calendar quarter and at the Term Loan B Maturity Date as follows:
<TABLE>
<CAPTION>
Payment Dates Principal Installment
- ------------- ---------------------
<S> <C>
September 30, 1999-June 30, 2004 $500,000
September 30, 2004 $5,850,000
December 31, 2004 $5,850,000
April 1, 2005 $178,300,000
</TABLE>
On the Term Loan B Maturity Date, Term Loan B shall be paid in full.
3
<PAGE> 4
1.5 Section 2.23.2(d) is amended by adding the following to the end
thereof: ", which payments shall be due 90 days after the end of each fiscal
year of the Borrower."
1.6 Section 7.20 is amended by deleting reference therein to "November
30, 2000" and substituting "November 27, 2000" in place thereof.
1.7 The following is added to the end of Section 8.2: "No amendment of
any provision of this Agreement which would decrease the mandatory prepayments
with respect to the Revolving Credit Loans shall be effective without the
written consent of the Required Revolving Credit Lenders, with respect to Term
Loan A shall be effective without the written consent of the Required Term Loan
A Lenders, with respect to Term Loan B shall be effective without the written
consent of the Required Term Loan B Lenders or with respect to the Interim Term
Loan shall be effective without the written consent of the Required Interim Term
Loan Lenders. No amendment of any provision of this Agreement relating to the
Issuer shall be effective without the written consent of the Issuer."
1.8 Reference in Section 10.8 to "Revolving Credit Commitments" shall
be deleted and "Commitments" shall be substituted in each place thereof.
1.9 The following is added to the end of clause (i) contained in
Section 12.3.1: ",and provided that any two or more investment funds that invest
in commercial loans and that are managed or advised by the same investment
advisor or by an Affiliate of such investment advisor shall be treated as a
single assignee for purposes of the minimum amounts required under this clause
(i), subject to any assignment to any fund being at least $1,000,000,"
ARTICLE 2.
REPRESENTATIONS
The Borrower and each Guarantor represents and warrants to the
Administrative Agent and the Lenders that:
2.1 The execution, delivery and performance of this Amendment are
within their respective powers, have been duly authorized by the Borrower and
each Guarantor and are not in contravention of any Requirement of Law.
2.2 This Amendment is the legal, valid and binding obligations of the
Borrower and each Guarantor, enforceable against them in accordance with the
terms thereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in the Credit Agreement and the
representations and warranties contained in
4
<PAGE> 5
the other Loan Documents are true on and as of the date hereof with the same
force and effect as if made on and as of the date hereof, and no Default or
Unmatured Default exists or has occurred and is continuing on the date hereof.
ARTICLE 3.
MISCELLANEOUS.
3.1 References in the Credit Agreement or in any other Loan Document to
the Credit Agreement shall be deemed to be references to the Credit Agreement as
amended hereby and as further amended from time to time.
3.2 Except as expressly amended hereby, the Borrower and the Guarantors
agree that the Loan Documents are ratified and confirmed and shall remain in
full force and effect and that it has no set off, counterclaim or defense with
respect to any of the foregoing. The terms used but not defined herein shall
have the respective meanings ascribed thereto in the Credit Agreement.
3.3 This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of the day and year first above
written.
BORROWER:
VENTURE HOLDINGS COMPANY LLC
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
GUARANTORS:
VEMCO, INC.
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
5
<PAGE> 6
VEMCO LEASING, INC.
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE INDUSTRIES CORPORATION
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE HOLDINGS CORPORATION
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE LEASING COMPANY
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE MOLD & ENGINEERING
COMPANY
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE SERVICE COMPANY
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
6
<PAGE> 7
VENTURE EUROPE, INC.
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE EU CORPORATION
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
VENTURE HOLDINGS COMPANY LLC
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
EXPERIENCE MANAGEMENT LLC
By: /s/ James E. Butler
---------------------------
Print Name: James E. Butler
Title: Executive Vice President
7
<PAGE> 8
LENDERS:
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent and a
Lender
By: /s/ Erik W. Bakker
---------------------------
Print Name: Erik W. Bakker
Title: First Vice President
8
<PAGE> 1
EXHIBIT 10.2
(Multicurrency-Cross Border)
ISDA
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of May 27, 1999
VENTURE HOLDINGS COMPANY LLC and THE FIRST NATIONAL BANK OF CHICAGO
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule'), and the documents and other confirming
evidence (each a "Confirmation') exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: -
1. INTERPRETATION
(a) Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the panics (collectively referred to as this "Agreement") and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) General Conditions.
(i) Each parry will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement in freely
transferable finds and in the manner customary for payments in the
<PAGE> 2
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party Under Section 2(a)(i) is subject
to (1) the condition precedent that no Event or Default or Potential
Event of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(b) Change of Account. Either party may chance its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to be other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and if
the aggregate amount that would otherwise have been payable by one party exceeds
the aggregate amount that would otherwise have been payable by the other party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This Election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required
2
<PAGE> 3
by any applicable law, as modified by the practice of any relevant
government revenue authority, then in effect. If a party is so required
to deduct or withhold, then that party ("X") will:
(1) promptly notify the other party ("Y") of such
requirement:
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full amount
required to be deducted or withheld from any additional amount
paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been
assessed against Y:
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable
to Y, evidencing such payment to such authorities and
(4) if such Tax is an indemnifiable Tax: pay to Y in
addition to the. payment to which Y is otherwise entitled
under this Agreement, such additional amount as is necessary
to ensure that the net amount actually received by Y (free and
clear of Indemnifiable Taxes, whether assessed against X or Y)
will equal the full amount Y would have received bad no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(1) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(11) a Change in Tax Law.
(ii) LIABILITY. If: --
(1) X is required by any applicable law, as modified by
the practice of any relevant governmental revenue
authority, to make any deduction or withholding in
respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
3
<PAGE> 4
(3) a liability resulting from such Tax is assessed
directly against X.
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
company with or perform any agreement contained in section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing:
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party. to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorize such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets of any contractual restriction binding on or affecting it or any
of its assets;
4
<PAGE> 5
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, Governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
4. AGREEMENTS
Each party agrees with the other that, so loner as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:
5
<PAGE> 6
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation, and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in
order co allow such other party or its Credit Support Provider to make
a payment under this Agreement or any applicable Credit Support
Document without any deduction or withholding for or on account of any
Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of the party
in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such
other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:
6
<PAGE> 7
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement of
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider
of such party in this Agreement or any Credit Support Document proves
to have been incorrect or misleading in any material respect when made
or repeated or deemed to have been made or repeated.
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
Support Provider of such party or any applicable Specified Entity of
such party (1) defaults under a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, there
occurs a liquidation of, an acceleration of obligations under, or an
early termination of, that Specified Transaction, (2) defaults, after
giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or
exchange date of, or any payment on early termination of a Specified
Transaction
7
<PAGE> 8
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such default continues for at least three
Local Business Days if there is no applicable notice requirement or
grace period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part a Specified Transaction (or such action is taken by
any person or entity appointed or empowered to operate it or act on its
behalf):
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule
as applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making
of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case
within 30 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all it,
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains
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possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1)
to (7) (inclusive); or (9) takes any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event. Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction.
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<PAGE> 10
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
(y) a Change in Tax Law, the party (which will be the Affected Party)
will, or there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(c)) or (2) receive a payment from which an amount is
required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) of 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either cast as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to. another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying,
the occurrence of such event (and, in such event. the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
6. EARLY TERMINATION
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(a) Right to Terminate Following Event of Default. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-default Party") may, by not more than
20 days notice to the Defaulting Party specifying the relevant Event of Default,
designate a day not earlier than the by such notice is effective as an Early
Termination Date in respect of outstanding Transactions. If, however, "Automatic
Early Termination" is specified in the Schedule as applying to a party, then an
Early Termination Date in respect of all outstanding Transactions will occur
immediately upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent
analogous thereto, (8) and as of the time immediately preceding the institution
of the relevant proceeding or the presentation of the relevant petition upon the
occurrence with respect to such party of an Event of Default specified in
Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also Live such other information about that Termination Event as
the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality
under Section 5(b)(i)(1) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to
its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such party
to incur a loss, excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) III its
rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)
(1) or a Tax Event occurs and there are two affected parties, each
party will use all reasonable efforts to reach agreement within 30 days
after notice thereof is given under Section 6(b)(i) on action to avoid
that Termination Event.
(iv) Right to Terminate. If:
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(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2). a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by more than 20 days notice to
the office party and provided that the relevant Termination Event is
then continuing, designate a day not earlier than the day such notice
is effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 5(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(c) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(c).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(c) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving,
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of
any Early Termination Date under Section 6(c) will be payable on the
day that notice of the amount payable is effective (in the case of an
Early Termination Date which is designated, or occurs
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as a result of in Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is
effective (in the cast of an Early Termination Date which is designated
as a result of a Termination Event). Such amount will be paid together
with (to the extent permitted under applicable law) interest thereon
(before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding)
the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date
occurs, the following provisions shall apply based on the parties'
election in the Schedule of a payment measure, either "Market
Quotation" or "Loss", and a payment method, either The "First Method"
or the "Second Method". If the parties fail to designate a payment
measure or payment method in the Schedule, it will be deemed that
"Market Quotation" or the "Second Method", as the case may be, shall
apply. The amount, if any payable in respect of an Early Termination
Date and determined pursuant to this Section will be subject to any
Set-off.
(i) Events of Default. If the Early Termination Date results from
an Event of Default:
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number of (A)
the sum of the Settlement Amount determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non- defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if
a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
Non-Defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to The Non-defaulting Party less (3) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement.
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If that amount is a Positive number, the Defaulting Party will
pay it to the Non- defaulting Party; if it is a negative
number, the Non-defaulting party will pay the absolute value
of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results
from a Termination Event:
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. It there are two Affected Parties:
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss or the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will Pay the absolute value of that amount to
Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(c) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss or bargain and the loss of protection against future risks
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and except as otherwise provided in this Agreement neither party will
be entitled to recover any additional damages as a consequence of such
losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law. immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such
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party as a consequence or sums paid in such other currency it such shortfall or
such excess arises or results from any variation between the rate of exchange at
which the Contractual Currency is converted into the currency of the judgment or
order for the purposes of such judgment or order and the rate of exchange at
which such party is able, acting in a reasonable manner and in good faith in
converting the currency received into the Contractual Currency, to purchase the
Contractual Currency with the amount of the currency of the judgment or order
actually received by such party. The term "rate of exchange" includes, without
limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 9, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. MISCELLANEOUS
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing, (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
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(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organization of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a Party is specified as a Multibranch Party in the Schedule, such
multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
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12. NOTICES
(a) Effectiveness. Any notice or other communication of this agreement may
be given in any manner set forth below (except that a notice or other
communication under Section 5 or 6 may not be given by facsimile transmission or
electronic messaging system) to the address or number or in accordance with the
electronic messaging system details provided (see the Schedule) and will be
deemed effective as indicated:
(i) if in writing and delivered in person or by courier, on the
date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient in
legible form (it being agreed that the burden of proving receipt will
be on the sender and will not be met by a transmission report generated
by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas)
or the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) Governing Law. This Agreement will be governcd by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit. action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New
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York City, if this Agreement is expressed to be governed by the laws of
the State of New York; and
(ii) waives any objection which may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing, in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues of assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
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"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable. the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
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<PAGE> 21
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising, from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a trade or business in
such Jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax masters, by the practice of any relevant government revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial center, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A parry will determine its
Loss as of the relevant
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Early Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreerment
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without record to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as or which those quotations are to be
obtained and will be selected in good faith by the party obliged to make a
determination under Section 6(c), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the biggest and lowest values. If exactly three such
quotations are provided, the market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual Cost) to the Non-Defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
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<PAGE> 23
"Reference Market-makers," means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing, which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or to
make an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:
(a) the Termination Currency Equivalent of the Market Quotations
(whether positive or negative) for each Terminated Transaction or group
of Terminated Transactions for which a Market Quotation is determined;
and
(b) such party's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transition or
group of Terminated Transactions for which a Market Quotation cannot be
determined or would not (in the reasonable belief of the party making
the determination) produce a commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transacting, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
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<PAGE> 24
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any Government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency Amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination is being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the foreign purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
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<PAGE> 25
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
Settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest in the
Currency of such amounts. from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number or days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(c) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
VENTURE HOLDINGS COMPANY LLC THE FIRST NATIONAL BANK OF CHICAGO
(Name of Party) (Name of Party)
By: /s/ James E. Butler By: /s/ Janet D. Newell
--------------------------------- -------------------------------
Name: James E. Butler Name: Janet D. Newell
Title: Chief Financial Officer Title: Assistant Vice President
Date: Date: 6/4/99
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<PAGE> 1
EXHIBIT 10.2.1
SCHEDULE
to the
MASTER AGREEMENT
dated as of May 27, 1999 between
VENTURE HOLDINGS COMPANY LLC
("Party A")
and
THE FIRST NATIONAL BANK OF CHICAGO
("Party B")
1. Termination Provisions
(a) "SPECIFIED ENTITY" means:
(i) in relation to Party A, for purposes of Sections 5(a)(v),
5(a)(vi), 5(a)(vii) and 5(b)(iv): all Affiliates excluding all
Unrestricted Subsidiaries as defined in the Indenture; and
(ii) in relation to Party B: none specified.
"Indenture" means that certain Indenture dated as of July 1, 1997 among
Party A, Vemco, Inc., Vemco Leasing, Inc., Venture Industries
Corporation, Venture Holdings Corporation, Venture Leasing Company,
Venture Mold & Engineering Corporation and Venture Service Company and
The Huntington.
(b) "DEFAULT UNDER SPECIFIED TRANSACTION" excludes any default under a
Specified Transaction if caused solely by the general unavailability of
the currency in which payments under such Specified Transaction are
denominated due to exchange controls or other governmental action.
(c) "CROSS DEFAULT" will apply to Party A and shall not have its meaning as
defined in Section 5(a)(vi) of this Agreement but shall instead mean
any default (however described) under the Credit Agreement (hereinafter
defined), and will not apply to Party B.
(d) "CREDIT EVENT UPON MERGER" applies to Party A.
(e) "AUTOMATIC EARLY TERMINATION" shall not apply to either party;
provided, however, that Automatic Early Termination will apply to a
party ("X") from and including the date, if any (i) on which X is or
becomes organized in a jurisdiction other than that which it represents
as its jurisdiction of organization (in this Agreement or otherwise) as
of the
<PAGE> 2
date of this Agreement (the "Original Jurisdiction") or (ii) as of
which, due to a change in, or current interpretation of, the insolvency
laws (statutory, common or other) of the Original Jurisdiction
applicable to X, a substantial likelihood exists that the designation
by the other party of an Early Termination Date following the
occurrence of an Event of Default with respect to X under Section
5(a)(vii) would not be recognized or upheld by the relevant courts.
(f) "Market Quotation" and the "Second Method" apply if the Early
Termination Date results from a Termination Event.
"LOSS" and the "SECOND METHOD" apply if the Early Termination Date
results from an Event of Default.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) "MARKET QUOTATION" in respect of any Terminated Transaction that is, or
is subject to, an unexercised option shall be determined such that the
quotation obtained from Reference Market-makers for a Replacement
Transaction takes into account, or is made in respect of, the economic
equivalent of the right or rights granted pursuant to such option.
II. TAX REPRESENTATIONS
(a) Party A is a limited liability company organized under the laws of
Michigan.
(b) Party B is a national banking association organized under the laws of
the United States of America.
(c) Payer Tax Representations: None specified.
(d) Payee Tax Representations: None specified.
III. DOCUMENTS
Documents to be delivered by each party (the "Provider"):
(i) upon execution of this Agreement:
(A) evidence reasonably satisfactory to the other party
of the Provider's authority to execute, deliver and
perform under this Agreement; and
(B) evidence reasonably satisfactory to the other party
of the authority and genuine signature of the
individual(s) executing this Agreement on behalf of
the Provider;
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<PAGE> 3
(ii) within thirty days after written demand:
(A) an opinion of counsel in relation to the
representations made by the Provider under Section
3(a), in form and substance reasonably satisfactory
to the other party;
(B) evidence reasonably satisfactory to the other party
of the authority and genuine signature of the
individual(s) executing any Confirmations entered
into from time to time hereunder on behalf of the
Provider; and
(C) copies of audited, publicly available financial
statements or call reports of the Provider (or, as
appropriate, in which the Provider's financial
position is consolidated and reported together, with
that of certain of its Affiliates).
The Provider hereby makes the representation set forth in Section 3(d)
of the Agreement with respect to each document delivered under Part III
of this Schedule.
IV. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES.
To Party A: To Party B:
VENTURE HOLDINGS THE FIRST NATIONAL BANK OF
COMPANY LLC CHICAGO
34501 Harper Clinton Township One First National Plaza
Fraser, Ml 48O26-0278 Chicago, Illinois 60670
Attention: Jim Butler Attention: Risk Insurance Division
VP of Finance & CFO Suite 0045
Facsimile Number: 810-294-1960 Facsimile Number 312-732-5645
Telephone Number: 910-296-9819
Section 12(a) is amended by changing the words "may not be given" appearing in
the second line to "shall not be effective if given".
(b) PROCESS AGENT. If a party becomes organized outside of the United
States of America, then such party shall, promptly upon written demand
by the other party, irrevocably appoint an agent for service of process
in the United States of America reasonably satisfactory to the other
party and provide the other party with a copy of such agent's written
acceptance of such appointment.
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<PAGE> 4
(c) OFFICES. Section 10(a) applies. Without limiting the effect of such
designation, the obligations of a party under any Transaction shall be
the same as if the party had entered into such Transaction through its
home or head office.
(d) MULTIBRANCH PARTY.
(i) Party A is not a Multibranch Party.
(ii) Party B is a Multibranch Party and may make or receive
payments through any of its offices..
(e) "CALCULATION AGENT" means Party B. The Calculation Agent's calculations
and determinations shall be made in good faith, in a commercially
reasonable manner and be binding, in the absence of manifest error.
(f) "CREDIT SUPPORT DOCUMENT" means:
(i) in relation to Party A, each of the following documents and
any other document which by its terms secures, guarantees or
otherwise supports Party A's obligations hereunder from time
to time: the Collateral Documents and the Guaranties, as
defined in the Credit Agreement; and
(ii) in relation to Party B, each of the following documents and
any other document which by its terms secures, guarantees or
otherwise supports Party B's obligations hereunder from time
to time: None specified.
Party A represents to Party B at all times hereunder that its
obligations under this Agreement remain secured under the Credit
Support Document(s).
(g) "CREDIT SUPPORT PROVIDER" means:
(i) in relation to Party A: None specified.
(ii) in relation to Party B: None specified.
(h) Governing Law.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW
DOCTRINE
(i) WAIVER OF JURY TRIAL.
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<PAGE> 5
EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION.
(j) Netting of Payments. Section 2(c)(ii) shall apply; provided that either
party may cause payments due on the same day in the same currency
(between the same Offices) but under different Transactions to be
discharged and replaced with a single, netted payment obligation by
providing, the other party with a written statement detailing the
calculation of such net amount payable not later than two Business Days
prior to the relevant due date.
(k) SET-OFF
(i) Any amount (the "Early Termination Amount") payable to one
party (the "Payee") by the other party (the "Payer") under
Section 6(e), in circumstances where there is a Defaulting
Party or one Affected Party in the case where a Termination
Event under Section 5(b)(iv) has occurred, will, at the option
of the party ("X") other than the Defaulting Party or the
Affected Party (and without prior notice to the Defaulting
Party or the Affected Party), be reduced by its set-off
against any amount(s) (the "Other Agreement Amount") payable
(whether at such time or in the future or upon the occurrence
of a contingency) by the Payee to the Payer or any of the
Payer's Affiliates (irrespective of the currency, place of
payment or booking office of the obligation, the "Other
Payee") under any other agreement(s) between the Payee and the
Other Payee or instrument(s) or undertaking(s) issued or
executed by one such entity to, or in favor of, the other (and
the Other Agreement Amount will be discharged promptly and in
all respects to the extent it is so set-off). X will give
notice to the other party of any set-off effected under this
Part IV(k).
(ii) For this purpose, either the Early Termination Amount or the
Other Agreement Amount (or the relevant portion of such
amounts) may be converted by X into the currency in which the
other is denominated at the rate of exchange at which such
party would be able, acting in a reasonable manner and in good
faith, to purchase the relevant amount of such currency.
(iii) If an obligation is unascertained, X may in good faith
estimate that obligation and set-off in respect of an
estimate, subject to the relevant party accounting to the
other when the obligation is ascertained.
(iv) Nothing in this Part IV(k) shall be effective to create a
charge or other security interest. This Part IV (k) shall be
without prejudice and in addition to any right of set-off,
combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation
of law, contract or otherwise).
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<PAGE> 6
(v) If the Payer is a Non-defaulting Party and the Payee is a
Defaulting Party, then it shall be a condition precedent to
the Payer's obligation to pay the Early Termination Amount to
the Payee that all Other Agreement Amounts have been paid in
full or satisfied by offset as set forth above.
(1) RECORDED CONVERSATIONS. Each party may electronically record any and
all telephone conversations between itself and the other party in
connection with this Agreement (including any Transaction) and agrees
that any such recordings may be submitted in evidence to any court or
in any proceeding for the purpose of establishing any matters pertinent
thereto.
(m) INCORPORATION OF PROTOCOL TERMS. The parties agree that the definitions
and provisions contained in Annexes I to 5 and Section 6 of the EMU
Protocol published by the International Swaps and Derivatives
Association, Inc. on 6th May, 1998 are incorporated into and apply to
this Agreement. References in those definitions and provisions to any
"ISDA Master Agreement" will be deemed to be referenced to this
Agreement.
(n) SECTION REFERENCES. "Section" means, unless otherwise indicated, a
section of this Agreement appearing in the ISDA printed form.
(o) "CREDIT AGREEMENT" means that certain Credit Agreement to be entered
into on or about May 26, 1999, among Party A, as the Borrower, the
lenders named therein, as the Lenders, and Party B as the
Administrative Agent, as the same may be amended from time to time in
accordance with its terms, but without regard to any termination or
cancellation thereof, whether by reason of payment of all indebtedness
incurred thereunder or otherwise, and any waiver or consent given
thereunder with respect to the provisions thereof shall be deemed to be
a waiver or consent given with respect to such provisions as such
provisions have been incorporated herein by reference; provided,
however, that until such Credit Agreement is executed and delivered,
the term "Credit Agreement" as used herein shall be deemed to refer to
that certain Amended & Restated Credit Agreement dated as of July 9,
1997, among Party A, as a Borrower, the Borrowing Subsidiaries, the
lenders named therein, as the Lenders, the Co-Agents and NBD Bank, as
the Agent, but without regard to any termination or cancellation
thereof, whether by reason of payment of all indebtedness incurred
thereunder or otherwise, unless such agreement is terminated and
replaced by the Credit Agreement to be entered into on or about May 26,
1999, with Party B as the Administrative Agent.
V. Additional Terms for FX Transactions and Currency Options
(a) Except as modified and/or supplemented below, the provisions of the
199E; ISDA FX and Currency Option Definitions as published by the
International Swap and Derivatives Association, Inc., the Emerging,
Markets Traders Association, Inc. and The Foreign Exchange Committee
(the "FX Definitions") are hereby incorporated herein in their
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<PAGE> 7
entirety and shall apply to FX Transactions, Currency Obligations and
Currency Option Transactions entered into by the Offices of the parties
specified in Part 4(d) above. FX Transactions, Currency Obligations and
Currency Option Transactions are each deemed to be Transactions
pursuant to the ISDA Master Agreement.
Regardless of any express provision or provisions to the contrary in
respect of an FX Transaction or Currency Option (i) all FX Transactions
and all Currency Options entered into between the parties prior to, on,
or (until agreed otherwise by the parties) after the date of this
Agreement shall constitute "Transactions" as referred to in this
Agreement, and (ii) all Confirmations howsoever described and whether
by means of electronic messaging system, letter, telex, facsimile or
otherwise in respect of FX Transactions and Currency Options shall
constitute "Confirmations" as referred to in this Agreement even where
not so specified in the Confirmation. Such Confirmations will
supplement, form a part of and be subject to this Agreement.
(b) The following amendments are made to the FX Definitions:
(1) Article 1 of the FX Definitions is hereby amended by adding
the following Sections:
"SECTION 1.27. CURRENCY. "Currency" means money denominated in
the lawful currency of any country or any composite currency.
"SECTION 1.28. CURRENCY OBLIGATION. "Currency Obligation"
means the undertaking of a party hereunder to deliver an
amount of Currency, including a netted Currency Obligation,
and including any Currency Obligation previously entered into
by the parties."
"SECTION 1.29. VALUE DATE. "Value Date" means the Settlement
Date."
(2) Section 1.24 of the FX Definitions is hereby amended by adding
a comma after the words "Settlement Date" in the second line
thereof then adding the words "Value Date" after the comma and
by deleting the comma after the word confirmation" in clause
(a) and adding the following immediately thereafter:
"provided, however if no date is specified, Settlement Date"
means, in respect of (i) an American Style Option, the Spot
Date of the Currency Pair on the Exercise Date of such Option;
and (ii) a European Style Option, the Spot Date of the
Currency Pair on the Expiration Date of such Currency Option;
and, where market practice in the relevant foreign exchange
market in relation to the two Currencies involved provides for
delivery of one Currency on one date which is a Business Day
in relation to that Currency but not the other Currency and
for delivery of the
7
<PAGE> 8
other Currency on the next Business Day in relation to that
other Currency, "Settlement Date" means such two Business
Days."
(3) Notwithstanding any specification as to the Calculation Agent,
the definition of "Spot Rate" in Section 1. 16 (e) of the FX
Definitions is hereby amended by deleting everything after the
phrase "good faith" and by adding to the end thereof ": (i) by
the Non-Defaulting Party or the non-Affected Party (if there
is only one Affected Party) for purposes of Section 6(c) of
the Agreement, and (ii) by the Seller for Deliverable and
Non-Deliverable Currency Options Transactions and the
Calculation Agent for Non-Deliverable FX Transactions.
(4) Section 2.2 of the FX Definitions is hereby amended by adding
the following (after subsection (b)):
"(c) POTENTIAL EVENT OF DEFAULT. If an Event of Default or a
Potential Event of Default has occurred and is continuing and
an Early Termination Date has not been designated by the
Non-defaulting Party, the Non-defaulting Party may, by written
notice, specify that any or all FX Transactions being settled
while such Event of Default or Potential Event of Default is
continuing may be settled in accordance with Section 2.2(b)
and upon such notice becoming effective, the parties shall be
deemed to have elected to have the specified FX Transactions
settle in accordance with Section 2.2(b) unless and until the
Event of Default or Potential Event of Default is not longer
continuing.
(5) Section 3.5 of the FX Definitions is hereby amended by
deleting the word "facsimile," in the third line thereof.
(6) Section 3.1 of the FX Definitions is hereby amended by adding
the following sub section (h):
"(h) SPOT DATE. "Spot Date" means the spot delivery day of the
relevant Currency pair as generally used by the relevant
foreign exchange market."
(7) Section 3.7 of the FX Definitions is hereby amended by adding
the following subsection (d):
"(d) POTENTIAL EVENT OF DEFAULT. If an Event of Default or a
Potential Event of Default has occurred and is continuing and
an Early Termination Date has not been designated by the
Non-defaulting Party, the Non-defaulting Party may by written
notice, specify that any or all Currency Option Transactions
being settled while such Event of Default or Potential Event
of Default is continuing shall be settled in accordance with
Section 2.2(b) and upon such notice becoming effective, the
parties shall be deemed to have elected to have the specified
Currency Option Transactions
8
<PAGE> 9
settle at the In-the-Money Amount (expressed in U.S. Dollars)
unless and until the Event of Default or Potential Event of
Default is not longer continuing."
(8) Section 3.4 of the FX Definitions is hereby amended by adding
the following new subsections (c):
"(c) FAILURE TO PAY PREMIUM. If a Premium is not received on
the Premium Payment Date, the Seller may elect: (i) to accept
a late payment of such Premium; to give written notice of such
non-payment and, if such payment shall not be received within
two (2) Banking Days (for the city in which the Office of the
Buyer is located) of such notice, treat the related Currency
Option Transaction as void; or (iii) to give written notice of
such non-payment and, if such payment shall not be received
within two (2) Banking Days (for the city in which the Office
of the Buyer is located) of such notice, treat such
non-payment as an Event of Default under Section 5(a)(i). If
the Seller elects to act under clause (i) or (ii) of the
preceding sentence the Buyer shall pay all out-of-pocket costs
and actual damages incurred in connection with such unpaid or
late Premium or void Currency Option Transaction, including
without limitation, interest on such Premium in the same
currency as such Premium from and including the Premium
Payment Date to but excluding, that date on which the Seller
actually receives the last payment in the Currency specified
for such Premium at the Non-Default Rate and any other losses,
costs or expenses incurred by the Seller in connection with
such terminated Currency Option Transaction to compensate
Seller for its loss of bargain, cost of funding or the loss
incurred as a result of terminating, liquidating obtaining or
re-establishing a delta hedge or related trading position with
respect to such Currency Option Transaction."
(c) The following amendment is made to the Agreement:
(1) Section 1(b) of the Agreement is hereby amended by adding the
following at the end thereof:
"; provided, however, that in the case of an FX Transaction,
the provisions of this Agreement (excluding the previous part
of this Section l(b)) shall prevail, and the Confirmation
shall not modify the other terms of this Agreement."
(d) NETTING, OFFSET AND DISCHARGE WITH RESPECT TO CURRENCY OPTION
TRANSACTIONS. Section 2(c) of the Agreement shall not apply to Currency
Option Transactions. The provisions of this Part 5(o) of the Schedule
shall apply to Currency Option Transactions in lieu thereof
(1) If, on any date, and unless otherwise mutually agreed by the
parties, Premium would otherwise be payable hereunder in the
same currency between a pair of offices of the parties, then,
on such date, each party's obligation to make payment of any
such Premium will be automatically satisfied and discharged
and, if the aggregate
9
<PAGE> 10
Premium(s) that would otherwise have been payable by such
Office of one party exceeds the aggregate Premium(s) that
would otherwise have been payable by such Office for the other
party, replaced by an obligation upon the party by whom the
larger aggregate Premium(s) would have been payable to pay the
other party the excess of the larger aggregate Premium(s) over
the smaller aggregate Premium(s) and if the Premiums are
equal, no payment shall be made.
(2) If, on any date, and unless otherwise mutually agreed by the
parties, amounts other than Premium payments would otherwise
be payable hereunder in the same currency between a pair of
Offices of the parties, then, on such date, each party's
obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable by such Office
of one party exceeds the aggregate amount that would otherwise
have been payable by such Office of the other party, replaced
by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay the other party the
excess of the larger aggregate amount over the smaller
aggregate amount.
(3) Unless otherwise agreed, any Call or any Put written by a
party will automatically be terminated and discharged, in
whole or in part, as applicable, against a Call or a Put,
respectively, written by the other party, such termination and
discharge to occur automatically upon payment in fall of the
last Premium payable in respect of such Currency Option
Transactions; provided that such termination and discharge may
only occur in respect of Currency Option Transactions.
(i) each being with respect to the same Put Currency and
the same Call Currency;
(ii) each having the same Expiration Date and Expiration
Time;
(iii) each being the same style, i.e., either both being
American Style Options or both being European Style
Options;
(iv) each having the same Strike Price;
(v) neither of which shall have been exercised by
delivery of a Notice of Exercise;
(vi) which are entered into by the same Offices of the
Parties; and
(vii) which are otherwise identical in terms that are
material for the purpose of offset and discharge;
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<PAGE> 11
and, upon the occurrence of such termination and discharge, neither
party shall I have any further obligation to the other party in respect
of the relevant Currency Option Transactions or, as the case may be,
parts thereof so terminated and discharged. In the case of a partial
termination and discharge (i.e., where the relevant Currency Option
Transactions are for different amounts of the Currency Pair), the
remaining portion of the Currency Option Transaction which is partially
discharged and terminated shall continue to be a Currency Option
Transaction for purposes of this Agreement.
(e) NETTING OF FX TRANSACTIONS. The provisions of Section 2(c) of the
Agreement shall not apply to FX Transactions. The provisions of this
Part 5 (e) of the Schedule shall apply to FX Transactions in lieu
thereof
(i) If on any Settlement Date more than one Currency Obligation is
owing between a pair of Netting Offices, then each party shall
aggregate the amounts of such Currency Obligations owed by it.
Only the difference between these aggregated Currency
Obligations shall be delivered, by the party owing the larger
amount making payment to the other party. If the. aggregate
amounts are equal, no delivery of that Currency shall be made.
(ii) NETTING OFFICE. "Netting Office" means, for the purposes of
Section 2.2(d) with respect to:
Party A: Fraser, Michigan
Party B: Chicago Head Office, London, Tokyo, Hong Kong
and Sydney.
(f) For the purpose of Section 6(e) of the Agreement for FX Transactions,
Currency Obligations and Currency Option Transactions only: the Second
Method and Loss will apply.
(g) With respect to any FX Transaction or Currency Option Transaction, the
Following provisions relating to Impossibility and Illegality shall
apply:
(1) ILLEGALITY WITH RESPECT TO FX TRANSACTIONS AND CURRENCY
OPTIONS. If an Illegality occurs and any Affected Transaction
is a FX Transaction or a Currency Option, then with respect to
such Transactions Section 6(b) of the Agreement shall not
apply and the provisions of this subsection (g) of Part 5 of
the Schedule shall apply in lieu thereof.
(2) IMPOSSIBILITY. "Impossibility" means, with respect to FX
Transactions and Currency Options, due to force majeure or act
of State a party is prevented from or hindered or delayed in
the delivery or receipt of any Currency in respect of a
Currency Obligation or Currency Option or it becomes or, in
the good faith judgment of one of the parties, may become
impossible due to the occurrence of a natural or man-
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<PAGE> 12
made disaster, calamity, emergency, crisis or other
circumstance beyond its control for a party to deliver or
receive any Currency which is the subject of a Currency
Obligation or Currency Option. The party for whom such
Performance has been prevented, hindered or delayed or has
become impossible shall be deemed to be an "Affected Party".
The FX Transactions and Currency Options affected by the
occurrence of an Impossibility shall be deemed to be "Affected
Transactions".
(3) DESIGNATION OF EARLY TERMINATION DATE. If an Impossibility or
an Illegality occurs and any Affected Transaction is a FX
Transaction or a Currency Option, then the Affected Party
shall promptly give notice thereof to the other party, and
subject to the provisions of subsection (c,)(6), either party
may, by notice to the other party, designate a day not earlier
than the day such notice is effective as an Early Termination
Date with respect to such Affected Transactions.
(4) CALCULATION OF AMOUNT PAYABLE. For the purposes of subsection
(g)(3) above, the amount payable shall be determined by the
party which is not the Affected Party (or, if both parties are
Affected Parties, whichever party gave the relevant notice) in
accordance with Section 6(e)(ii) of the Agreement and
subsection (f) of this Part 6 of the Schedule as if there were
one Affected Party and the party performing the calculations
is not the Affected Party.
(5) NO EVENT OF DEFAULT. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also
constitutes an Impossibility, it will be treated as an
Impossibility and will not constitute an Event of Default.
(6) TRANSFER TO AVOID IMPOSSIBILITY OR ILLEGALITY. If an
Impossibility or Illegality occurs and any Affected
Transaction is an FX Transaction or Currency Option, unless
prohibited by law, the Affected Party shall, as a condition to
its right to designate an Early Termination Date with respect
to any Currency Obligation or Option, use all reasonable
efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer as soon
as practicable, and in any event before the earlier to occur
of the expiration date of the affected Currency Obligations or
Options or twenty (20) days after it gives notice under
subsection (g)(3) of this Part 6 of the Schedule all its
rights and obligations under the Agreement in respect of the
affected Currency Obligations and Options to another of its
Offices so that such Impossibility or Illegality ceases to
exist. Any transfer will be subject to the prior written
consent of the other party, which consent will not be withheld
if such other party's policies in effect at such time would
permit it to enter into transaction with the transferee Office
on the terms proposed, unless such transfer would cause the
other party to incur a material tax or other cost.
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<PAGE> 13
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized officers as of the date hereof
VENTURE HOLDINGS COMPANY LLC
By: /s/ James E. Butler
------------------------------------
Name: James E. Butler
Title: Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Janet D. Newell
------------------------------------
Name: Janet D. Newell
Title: Assistant Vice President
13
<PAGE> 1
EXHIBIT 10.3
CORPORATE OPPORTUNITY AGREEMENT
CORPORATE OPPORTUNITY AGREEMENT made and entered into this 27th day of May,
1999 (the "Agreement"), by and between Larry J. Winget ("Winget") and The
Huntington National Bank, as Indenture Trustee (the "Trustee").
WHEREAS, Venture Holdings Trust (the "Trust"), Vemco, Inc., Venture
Industries Corporation, Venture Mold and Engineering Corporation, Venture
Leasing Company, Vemco Leasing, Inc., Venture Holdings Corporation, Venture
Service Company, Venture Holdings Company LLC, Experience Management LLC,
Venture Europe Inc., and Venture EU Corporation (each a "Guarantor" and
together, the "Guarantors"), and the Trustee have entered into a Senior
Subordinated Note indenture and a Senior Note Indenture, dated as of May 27,
1999 (the "Indentures").
WHEREAS, in connection with the execution of the Indentures and the
issuance of the 12% Senior Subordinated Notes due 2007 and the 11% Senior Notes
due 2009 (the "Securities") thereunder, Winget has agreed to enter into this
Agreement for the benefit of the Holders.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Covenant Of Winget. Winget agrees that if any corporate opportunity,
business opportunity, proposed transaction, acquisition, disposition,
participation, interest, or other opportunity to acquire an interest in any
business or prospect in the same business or in any business reasonably related
to the business of the Trust or its successor under the Indentures, the
Guarantors or any of their Subsidiaries or in any machinery or equipment useful
in the business of the Trust or its successor under the Indentures, the
Guarantors or any of their Subsidiaries (a "Business Opportunity") comes to his
attention or shall be made available to him or any of his Affiliates, a complete
and accurate description of such Business Opportunity, including all of the
terms and conditions thereof and the identity of all other Persons involved in
the Business Opportunity, shall be promptly presented in writing to the Board of
Directors of the Trust or its successor under the Indentures and each of the
Guarantors and the Fairness Committee of the Trust or its successor under the
Indentures and each of the Guarantors, and the Trust or its successor under the
Indentures and each Guarantor shall be entitled to pursue and take advantage of
such Business Opportunity, either directly or through a Wholly Owned Subsidiary,
and Winget shall not, nor shall any of his Affiliates (other than the Trust, its
successor under the Indentures, or any Wholly Owned Subsidiary of the Trust or
its successor under the Indentures), pursue or take advantage of a Business
Opportunity unless majorities of the Board of Directors of the Trust or its
successor under the Indentures and each of the Guarantors and the Fairness
Committee of the Trust or its successor under the Indenture and each of the
Guarantors (including majorities of each Guarantor's disinterested directors, if
any, and Independent members of the Fairness Committee) have determined that it
is not in the interests of the Trust, its successor under the Indentures, or the
Guarantor to pursue or take advantage of such Business Opportunity; provided,
however, that (1) a Business Opportunity may be made available to Nova
<PAGE> 2
Corporation ("Nova") prior to and to the exclusion of its being made available
to the Trust or its successor under the Indentures and the Guarantors if the
Trust or its successor under the Indentures and the Guarantors shall have
delivered to the Indenture Trustee an opinion of independent counsel in the
United States to the effect that making such Business Opportunity available to
the Trust or its successor under the Indentures prior to its being made
available to Nova would be illegal and (2) this Agreement shall not restrict
Nova's ability to compete with the Trust or its successor under the Indentures
and the Guarantors for a Business Opportunity if the Trust or its successor
under the Indentures and the Guarantors shall have delivered to the Indenture
Trustee an opinion of independent counsel in the United States to the effect
that such restriction would be illegal. Notwithstanding the foregoing, Business
Opportunities (1) relating to the purchase of machinery and equipment or real
estate and not constituting a Business within the meaning of Section 11-01(d) of
Regulation S-X of the Commission or (2) relating to the sale of goods and
services by an Affiliate in the ordinary course of its business as conducted as
of the date of the Indentures shall not be subject to the Corporate Opportunity
Agreement.
2. Amending Agreement. This Agreement shall not be amended, modified or in
any way altered without the consent of the Holders of not less than a majority
in aggregate principal amount of each of the Senior Notes and Senior
Subordinated Notes, by Act of said Holders delivered to the Trust or its
successor under the Indentures, each Guarantor, and the Indenture Trustee.
3. Construction. All capitalized terms used herein that are defined in, or
by reference in, the Indentures, shall have the meanings assigned to such terms
therein, or by reference therein, unless otherwise defined.
IN WITNESS WHEREOF, the parties have signed and executed this Agreement as
of the 27th day of May, 1999.
LARRY J. WINGET
By: Larry J. Winget
by Paul Lieberman
--------------------------------
Paul Lieberman, Signing as Agent
THE HUNTINGTON NATIONAL BANK,
as Indenture Trustee
By: /s/ Ruth F. Sowers
--------------------------------
Name: Ruth F. Sowers
Title: Authorized Signer
2
<PAGE> 1
EXHIBIT 10.19
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on February 7, 1994,
by and among Venture Holdings Trust (the "Trust"), Vemco, Inc., Venture
Industries Corporation, Venture Industries Canada Ltd., Venture Mold &
Engineering Corporation, Venture Leasing Company, Vemco Leasing, Inc., Venture
Holdings Corporation and Venture Service Company (collectively, the
"Subsidiaries"), and LARRY J. WINGET ("Executive"). The Trust and the
Subsidiaries are referred to herein as the "Company."
Recitals
A. Executive serves as an officer and/or director of one or more of the
Subsidiaries and the Company desires Executive to continue in such capacities.
Executive is willing to continue to serve in such capacities if Executive
receives the protections provided by this Agreement.
B. Company believes that (1) litigation against corporate officers and
directors, regardless of whether meritorious, is expensive and time-consuming
for the official to defend; (2) there is a substantial risk of a large judgment
or settlement in litigation in which a corporate official was neither culpable
nor profited personally to the detriment of the corporation; (3) it is
increasingly difficult to attract and keep qualified officers and directors
because of such potential liabilities; and (4) it is important for officers and
directors to have assurance that indemnification will be available if they act
in accordance with reasonable business standards, it is in the best interests of
Company and its shareholders for Company to contractually obligate itself to
indemnify its officers and directors and to set forth the details of the
indemnification process.
C. Based upon the conclusions stated in Recital B above, to induce
Executive to continue to serve as one of the Company's officers and/or directors
and in consideration of Executive's continued service, Company wishes to enter
into this Agreement with Executive.
Therefore, Company and Executive agree as follows:
1. Indemnification
(a) The Subsidiaries and the Trust (collectively, the "Company")
jointly and severally agree to indemnify Executive to the fullest extent
permitted under applicable law if Executive was or is a party or threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding of any kind, whether civil, criminal administrative or investigative
and whether formal or informal (including actions by or in the right of Company
and any preliminary inquiry or claim by any person or authority), by reason of
the fact that Executive is or was a director, officer, partner, trustee,
employee or agent of Company or is or was servicing at Company's request as a
director, officer, employee or agent of another corporation (including a
subsidiary of any Subsidiary), limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise, whether or not for
profit, or by reason of anything done or not done by Executive in any such
capacity (collectively, "Covered Matters"). Such indemnification will cover all
<PAGE> 2
Expenses (as defined in paragraph 5(a) below), liabilities, judgments (including
punitive and exemplary damages), penalties, fines (including excise taxes
relating to employee benefit plans and civil penalties) and amounts paid in
settlement which are incurred or imposed upon Executive in connection with a
Covered Matter (collectively, "Indemnified Amounts
(b) Executive will be indemnified for all Indemnified Amounts and
Company will defend Executive against claims (including threatened claims and
investigations) in any way related to Executive's service as an officer or
director including claims brought by or on behalf of Company or any subsidiary
of any Subsidiary, except if it is finally determined by the court of last
resort (or by a lower court if not timely appealed) that (1) the payment is
prohibited by applicable law or (2) Executive engaged in intentional misconduct
for the primary purpose of significant personal financial benefit through
actions adverse to Company's and its shareholders' best interests. As used in
this Agreement, (1) "intentional misconduct" will not include violations of
disclosure or reporting requirements of federal securities laws or a breach of
fiduciary duties (including duties of loyalty or care) if Executive relied on
advice of counsel to Company, or otherwise reasonably believed that there was no
violation of such requirements or breach of fiduciary duty; and (2) "significant
personal financial benefit" will not include compensation or employee benefits
for past or prospective services to Company or Company's successor or in
connection with an agreement not to compete or similar agreement, or any benefit
received by directors or officers or shareholders of Company generally.
(c) If Executive is entitled under this Agreement to indemnification
for less than all of the amounts incurred by Executive in connection with a
Covered Matter, Company will indemnify Executive for the indemnifiable amount.
2. Agent for Trust and the subsidiaries. The Trust and the Subsidiaries
hereby appoint Venture Service Company ("Agent") as their agent for giving and
receiving certain notices relating to the Executive's indemnification claims,
and for making certain determinations relating to the Executive's right to
indemnification as further described herein.
3. Claims for Indemnification. Executive will give Agent written notice
of any claim for indemnification under this Agreement. Payment requests will
include a schedule setting forth in reasonable detail the amount requested and
will be accompanied (or, if necessary, followed) by copies of the relevant
invoices or other documentation. Upon the Agent's request, Executive will
provide the Trust with a copy of the document or pleading, if any, notifying
Executive of the Covered Matter. To the extent practicable, Company will pay
Indemnified Amounts directly without requiring Executive to make any prior
payment.
4. Determination of Right-to Indemnification.
(a) Executive will be presumed to be entitled to indemnification
under this Agreement and will receive such indemnification, subject to
paragraph 4(b) below, irrespective of whether the Covered Matter involves
allegations of intentional misconduct, alleged violations of
2
<PAGE> 3
Section 16(b) of the Securities Exchange Act of 1934, alleged violations of
Section 10(b) of the Securities Exchange Act of 1934 (including Rule l0b-5
thereunder), breach of Executive's fiduciary duties (including duties of loyalty
or care) or any other claim.
(b) If, in the opinion of counsel to the Agent, applicable law
permits indemnification in a Covered Matter only as authorized in the specific
case upon a determination that indemnification is proper in the circumstances
because Executive has met a standard of conduct established by applicable law,
and upon an evaluation of Indemnified Amounts to be paid in connection with such
Covered Matter, the following will apply:
(1) Agent will give Executive notice that a de termination and
evaluation will be made under this paragraph 4(b); such notice will be
given immediately after receipt of counsel's opinion that such a
determination and evaluation is necessary and will include a copy of such
opinion.
(2) Such determination and evaluation will be made in good
faith, as follows:
(A) by a majority vote of a quorum of Agent's Board of
Directors who are not parties or threatened to be made parties to the
Covered Matter in question ("Disinterested Directors") or, if such a
quorum is not obtainable, by a majority vote of a committee of
Disinterested Directors who are selected by the Board; or
(B) by an attorney or firm of attorneys, having no previous
relationship with Agent or Executive, which is selected by Agent and
Executive; or
(C) by all independent directors of Agent (as defined in
the Michigan Business Corporation Act) who are not parties or
threatened to be made parties to the Covered Matter.
(3) Executive will be entitled to a hearing before the entire
Board of Directors of Agent and any other person or persons making the
determination and evaluation under clause (2) above Executive will be
entitled to be represented by counsel at such hearing.
(4) The cost of a determination and evaluation under this
paragraph 4(b) (including attorneys' fees and other expenses incurred by
Executive in preparing for and attending the hearing contemplated by clause
(3) above and otherwise in connection with the determination and evaluation
under this paragraph 4(b)) will be borne by Company.
(5) The determination will be made as promptly as possible after
final adjudication of the Covered Matter.
3
<PAGE> 4
(6) Executive will be presumed to have met the required standard
of conduct under this Section 4(b) unless it is clearly demonstrated to the
determining body that Executive has not met the required standard of
conduct.
5. Advance of Expenses.
(a) Before final adjudication of a Covered Matter, upon Executive's
request pursuant to paragraph 2 above, Company will promptly either advance
Expenses directly or reimburse Executive for all Expenses. As used in this
Agreement, "Expenses" means all costs and expenses (including attorneys' fees,
expert fees, other professional fees and court costs) incurred by Executive in
connection with a Covered Matter other than judgments, penalties, fines and
settlement amounts.
(b) If, in the opinion of counsel to Agent, applicable law permits
advancement of Expenses only as authorized in the specific case upon a
determination that Executive has met a standard of conduct established by
applicable law, the determination will be made at Company's cost, in good faith
and as promptly as possible after Executive's request, in accordance with
clauses (1) through (4) and (6) of paragraph 4(b) above. Because of the
difficulties inherent in making any such determination before final disposition
of the Covered Matter, to the extent permitted by law such advance will be made
if (1) the facts then known to those persons making the determination, without
conducting a formal independent investigation, would not preclude advancement of
Expenses under applicable law and (2) Executive submits to Agent a written
affirmation of Executive's belief that Executive has met the standard of conduct
necessary for advancement of Expenses under the circumstances.
(c) Executive will repay any Expenses that are advanced under this
paragraph 5 if it is ultimately determined, in a final, non-appealable judgment
rendered by the court of last resort (or by a lower court if not timely
appealed), that Executive is not entitled to be indemnified against such
Expenses. This undertaking by Executive is an unlimited general undertaking but
no security for such undertaking will be required.
6. Defense of Claim.
(a) Except as provided in paragraph 6(c) below, Company, jointly with
any other indemnifying party, will be entitled to assume the defense of any
Covered Matter as to which Executive requests indemnification.
(b) Counsel selected by Executive to defend any Covered Matter will be
subject to Executive's advance written approval, which will not be unreasonably
withheld.
(c) Executive may employ Executive's own counsel in a Covered Matter
and be fully reimbursed therefor if (1) Agent approves, in writing, the
employment of such counsel or (2) either (A) Executive has reasonably concluded
that there may be a conflict of interest between
4
<PAGE> 5
Company and Executive or between Executive and other parties represented by
counsel employed by Agent to represent Executive in such action or (B) Agent has
not employed counsel reasonably satisfactory to Executive to assume the defense
of such Covered Matter promptly after Executive's request.
(d) Neither Company nor Executive will settle any Covered Matter
without the other's written consent, which will not be unreasonably withheld.
(e) If Executive is required to testify (in court proceedings,
depositions, informal interviews or otherwise), consult with counsel, furnish
documents or take any other reasonable action in connection with a Covered
Matter, Company will reimburse Executive for all reasonable expenses incurred by
Executive in connection therewith.
7. Disputes: Enforcement
(a) If there is a dispute relating to the validity or enforceability
of this Agreement or a denial of indemnification, advance of Expenses or payment
of any other amounts due under this Agreement or any of the Subsidiaries'
Articles of Incorporation or Bylaws, Company will provide such indemnification,
advance of Expenses or other payment until a final, non-appealable judgment that
Executive is not entitled to such indemnification, advance of Expenses or other
payment has been rendered by the court of last resort (or by a lower court if
not timely appealed). Executive will repay such amounts if such final,
non-appealable judgment so requires.
(b) Company will reimburse all of Executive's reasonable expenses
(including attorneys' fees) in pursuing an action to enforce Executive's rights
under this Agreement unless a final, non-appealable judgment against Executive
has been rendered in such action by the court of last resort (or by a lower
court if not timely appealed). At Executive's request, such expenses will be
advanced by Company to Executive as incurred before final resolution of such
action by the court of last resort; such expenses will be repaid by Executive if
a final, non-appealable judgment in Company's favor is rendered in such action
by the court of last resort (or by a lower court if not timely appealed).
8. Rights Not Exclusive. The indemnification provided to Executive
under this Agreement will be in addition to any indemnification provided to
Executive by any law, agreement, Board resolution, provision of the Articles of
Incorporation or Bylaws of any Subsidiary or otherwise.
9. Subrogation. Upon payment of any Indemnified Amount under this
Agreement, Company will be subrogated to the extent of such payment to all of
Executive's rights of recovery therefor and Executive will take all reasonable
actions requested by Company (at no cost or penalty to Executive) to secure
Company's rights under this paragraph 9 including executing documents.
5
<PAGE> 6
10. Continuation of Indemnity. All of Company's obligations under this
Agreement will continue as long as Executive is subject to any actual or
possible Covered Matter, notwithstanding Executive's termination of service as
an officer or director.
11. Amendments. None of the Subsidiaries' Articles of Incorporation or
Bylaws will be changed to increase liability of officers or directors or to
limit Executive's indemnification. Any repeal or modification of any
Subsidiary's Articles of Incorporation or Bylaws or any repeal or modification
of the relevant provisions of any applicable law will not in any way diminish
any of Executive's rights or Company's obligations under this Agreement. This
Agreement cannot be amended except with the written consent of Company and
Executive.
12. Governing Law. This Agreement will be governed by Michigan law.
13. Successors.
(a) This Agreement will be binding upon and inure to the benefit of
the parties and their respective heirs, legal representatives and assigns.
(b) Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of any Subsidiary to assume all of Company's obligations
under this Agreement. Such assumption will not release Company from its
obligations under this Agreement.
14. Severability. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will. remain binding in accordance with their terms.
15. Notices. All notices given under this Agreement will be in writing
and delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to Executive:
If to the Trust, the
Agent, the Company
or any Subsidiary: Venture Service Company
33662 James J. Pompo
Fraser, Michigan 48026
Attn: President
6
<PAGE> 7
or to such other address as either party furnishes to the other in writing.
16. Counterparts. This Agreement may be signed in counterpart.
17. Subsidiaries. As used in this Agreement, the term "subsidiary"
means any corporation in which any Subsidiary owns a majority interest.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date written above.
VENTURE HOLDINGS TRUST
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VEMCO, INC.
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE INDUSTRIES CORPORATION
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE INDUSTRIES CANADA LTD.
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE MOLD & ENGINEERING CORPORATION
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
7
<PAGE> 8
VENTURE LEASING COMPANY
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VEMCO LEASING, INC.
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE SERVICE COMPANY
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE HOLDINGS CORPORATION
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
/s/ Larry J. Winget
-------------------------------------
LARRY J. WINGET, EXECUTIVE
8
<PAGE> 1
EXHIBIT 10.20
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on February 7, 1994,
by and among Venture Holdings Trust (the "Trust"), Vemco, Inc., Venture
Industries Corporation, Venture Industries Canada Ltd., Venture Mold &
Engineering Corporation, Venture Leasing Company, Vemco Leasing, Inc., Venture
Holdings Corporation and Venture Service Company (collectively, the
"Subsidiaries"), and MICHAEL G. TORAKIS ("Executive"). The Trust and the
Subsidiaries are referred to herein as the "Company."
Recitals
A. Executive serves as an officer and/or director of one or more of the
Subsidiaries and the Company desires Executive to continue in such capacities.
Executive is willing to continue to serve in such capacities if Executive
receives the protections provided by this Agreement.
B. Company believes that (1) litigation against corporate officers and
directors, regardless of whether meritorious, is expensive and time-consuming
for the official to defend; (2) there is a substantial risk of a large judgment
or settlement in litigation in which a corporate official was neither culpable
nor profited personally to the detriment of the corporation; (3) it is
increasingly difficult to attract and keep qualified officers and directors
because of such potential liabilities; and (4) it is important for officers and
directors to have assurance that indemnification will be available if they act
in accordance with reasonable business standards, it is in the best interests of
Company and its shareholders for Company to contractually obligate itself to
indemnify its officers and directors and to set forth the details of the
indemnification process.
C. Based upon the conclusions stated in Recital B above, to induce
Executive to continue to serve as one of the Company's officers and/or directors
and in consideration of Executive's continued service, Company wishes to enter
into this Agreement with Executive.
Therefore, Company and Executive agree as follows:
1. Indemnification
(a) The Subsidiaries and the Trust (collectively, the "Company")
jointly and severally agree to indemnify Executive to the fullest extent
permitted under applicable law if Executive was or is a party or threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding of any kind, whether civil, criminal administrative or investigative
and whether formal or informal (including actions by or in the right of Company
and any preliminary inquiry or claim by any person or authority), by reason of
the fact that Executive is or was a director, officer, partner, trustee,
employee or agent of Company or is or was servicing at Company's request as a
director, officer, employee or agent of another corporation (including a
subsidiary of any Subsidiary), limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise, whether or not for
profit, or by reason of anything done or not done by Executive in any such
capacity (collectively, "Covered Matters"). Such indemnification will cover all
<PAGE> 2
Expenses (as defined in paragraph 5(a) below), liabilities, judgments (including
punitive and exemplary damages), penalties, fines (including excise taxes
relating to employee benefit plans and civil penalties) and amounts paid in
settlement which are incurred or imposed upon Executive in connection with a
Covered Matter (collectively, "Indemnified Amounts
(b) Executive will be indemnified for all Indemnified Amounts and
Company will defend Executive against claims (including threatened claims and
investigations) in any way related to Executive's service as an officer or
director including claims brought by or on behalf of Company or any subsidiary
of any Subsidiary, except if it is finally determined by the court of last
resort (or by a lower court if not timely appealed) that (1) the payment is
prohibited by applicable law or (2) Executive engaged in intentional misconduct
for the primary purpose of significant personal financial benefit through
actions adverse to Company's and its shareholders' best interests. As used in
this Agreement, (1) "intentional misconduct" will not include violations of
disclosure or reporting requirements of federal securities laws or a breach of
fiduciary duties (including duties of loyalty or care) if Executive relied on
advice of counsel to Company, or otherwise reasonably believed that there was no
violation of such requirements or breach of fiduciary duty; and (2) "significant
personal financial benefit" will not include compensation or employee benefits
for past or prospective services to Company or Company's successor or in
connection with an agreement not to compete or similar agreement, or any benefit
received by directors or officers or shareholders of Company generally.
(c) If Executive is entitled under this Agreement to indemnification
for less than all of the amounts incurred by Executive in connection with a
Covered Matter, Company will indemnify Executive for the indemnifiable amount.
2. Agent for Trust and the subsidiaries. The Trust and the Subsidiaries
hereby appoint Venture Service Company ("Agent") as their agent for giving and
receiving certain notices relating to the Executive's indemnification claims,
and for making certain determinations relating to the Executive's right to
indemnification as further described herein.
3. Claims for Indemnification. Executive will give Agent written notice
of any claim for indemnification under this Agreement. Payment requests will
include a schedule setting forth in reasonable detail the amount requested and
will be accompanied (or, if necessary, followed) by copies of the relevant
invoices or other documentation. Upon the Agent's request, Executive will
provide the Trust with a copy of the document or pleading, if any, notifying
Executive of the Covered Matter. To the extent practicable, Company will pay
Indemnified Amounts directly without requiring Executive to make any prior
payment.
4. Determination of Right-to Indemnification.
(a) Executive will be presumed to be entitled to indemnification
under this Agreement and will receive such indemnification, subject to
paragraph 4(b) below, irrespective of whether the Covered Matter involves
allegations of intentional misconduct, alleged violations of
2
<PAGE> 3
Section 16(b) of the Securities Exchange Act of 1934, alleged violations of
Section 10(b) of the Securities Exchange Act of 1934 (including Rule l0b-5
thereunder), breach of Executive's fiduciary duties (including duties of loyalty
or care) or any other claim.
(b) If, in the opinion of counsel to the Agent, applicable law
permits indemnification in a Covered Matter only as authorized in the specific
case upon a determination that indemnification is proper in the circumstances
because Executive has met a standard of conduct established by applicable law,
and upon an evaluation of Indemnified Amounts to be paid in connection with such
Covered Matter, the following will apply:
(1) Agent will give Executive notice that a de termination and
evaluation will be made under this paragraph 4(b); such notice will be
given immediately after receipt of counsel's opinion that such a
determination and evaluation is necessary and will include a copy of such
opinion.
(2) Such determination and evaluation will be made in good
faith, as follows:
(A) by a majority vote of a quorum of Agent's Board of
Directors who are not parties or threatened to be made parties to the
Covered Matter in question ("Disinterested Directors") or, if such a
quorum is not obtainable, by a majority vote of a committee of
Disinterested Directors who are selected by the Board; or
(B) by an attorney or firm of attorneys, having no previous
relationship with Agent or Executive, which is selected by Agent and
Executive; or
(C) by all independent directors of Agent (as defined in
the Michigan Business Corporation Act) who are not parties or
threatened to be made parties to the Covered Matter.
(3) Executive will be entitled to a hearing before the entire
Board of Directors of Agent and any other person or persons making the
determination and evaluation under clause (2) above Executive will be
entitled to be represented by counsel at such hearing.
(4) The cost of a determination and evaluation under this
paragraph 4(b) (including attorneys' fees and other expenses incurred by
Executive in preparing for and attending the hearing contemplated by clause
(3) above and otherwise in connection with the determination and evaluation
under this paragraph 4(b)) will be borne by Company.
(5) The determination will be made as promptly as possible after
final adjudication of the Covered Matter.
3
<PAGE> 4
(6) Executive will be presumed to have met the required standard
of conduct under this Section 4(b) unless it is clearly demonstrated to the
determining body that Executive has not met the required standard of
conduct.
5. Advance of Expenses.
(a) Before final adjudication of a Covered Matter, upon Executive's
request pursuant to paragraph 2 above, Company will promptly either advance
Expenses directly or reimburse Executive for all Expenses. As used in this
Agreement, "Expenses" means all costs and expenses (including attorneys' fees,
expert fees, other professional fees and court costs) incurred by Executive in
connection with a Covered Matter other than judgments, penalties, fines and
settlement amounts.
(b) If, in the opinion of counsel to Agent, applicable law permits
advancement of Expenses only as authorized in the specific case upon a
determination that Executive has met a standard of conduct established by
applicable law, the determination will be made at Company's cost, in good faith
and as promptly as possible after Executive's request, in accordance with
clauses (1) through (4) and (6) of paragraph 4(b) above. Because of the
difficulties inherent in making any such determination before final disposition
of the Covered Matter, to the extent permitted by law such advance will be made
if (1) the facts then known to those persons making the determination, without
conducting a formal independent investigation, would not preclude advancement of
Expenses under applicable law and (2) Executive submits to Agent a written
affirmation of Executive's belief that Executive has met the standard of conduct
necessary for advancement of Expenses under the circumstances.
(c) Executive will repay any Expenses that are advanced under this
paragraph 5 if it is ultimately determined, in a final, non-appealable judgment
rendered by the court of last resort (or by a lower court if not timely
appealed), that Executive is not entitled to be indemnified against such
Expenses. This undertaking by Executive is an unlimited general undertaking but
no security for such undertaking will be required.
6. Defense of Claim.
(a) Except as provided in paragraph 6(c) below, Company, jointly with
any other indemnifying party, will be entitled to assume the defense of any
Covered Matter as to which Executive requests indemnification.
(b) Counsel selected by Executive to defend any Covered Matter will
be subject to Executive's advance written approval, which will not be
unreasonably withheld.
(c) Executive may employ Executive's own counsel in a Covered Matter
and be fully reimbursed therefor if (1) Agent approves, in writing, the
employment of such counsel or (2) either (A) Executive has reasonably concluded
that there may be a conflict of interest between
4
<PAGE> 5
Company and Executive or between Executive and other parties represented by
counsel employed by Agent to represent Executive in such action or (B) Agent has
not employed counsel reasonably satisfactory to Executive to assume the defense
of such Covered Matter promptly after Executive's request.
(d) Neither Company nor Executive will settle any Covered Matter
without the other's written consent, which will not be unreasonably withheld.
(e) If Executive is required to testify (in court proceedings,
depositions, informal interviews or otherwise), consult with counsel, furnish
documents or take any other reasonable action in connection with a Covered
Matter, Company will reimburse Executive for all reasonable expenses incurred by
Executive in connection therewith.
7. Disputes: Enforcement
(a) If there is a dispute relating to the validity or enforceability
of this Agreement or a denial of indemnification, advance of Expenses or payment
of any other amounts due under this Agreement or any of the Subsidiaries'
Articles of Incorporation or Bylaws, Company will provide such indemnification,
advance of Expenses or other payment until a final, non-appealable judgment that
Executive is not entitled to such indemnification, advance of Expenses or other
payment has been rendered by the court of last resort (or by a lower court if
not timely appealed). Executive will repay such amounts if such final,
non-appealable judgment so requires.
(b) Company will reimburse all of Executive's reasonable expenses
(including attorneys' fees) in pursuing an action to enforce Executive's rights
under this Agreement unless a final, non-appealable judgment against Executive
has been rendered in such action by the court of last resort (or by a lower
court if not timely appealed). At Executive's request, such expenses will be
advanced by Company to Executive as incurred before final resolution of such
action by the court of last resort; such expenses will be repaid by Executive if
a final, non-appealable judgment in Company's favor is rendered in such action
by the court of last resort (or by a lower court if not timely appealed).
8. Rights Not Exclusive. The indemnification provided to Executive
under this Agreement will be in addition to any indemnification provided to
Executive by any law, agreement, Board resolution, provision of the Articles of
Incorporation or Bylaws of any Subsidiary or otherwise.
9. Subrogation. Upon payment of any Indemnified Amount under this
Agreement, Company will be subrogated to the extent of such payment to all of
Executive's rights of recovery therefor and Executive will take all reasonable
actions requested by Company (at no cost or penalty to Executive) to secure
Company's rights under this paragraph 9 including executing documents.
5
<PAGE> 6
10. Continuation of Indemnity. All of Company's obligations under this
Agreement will continue as long as Executive is subject to any actual or
possible Covered Matter, notwithstanding Executive's termination of service as
an officer or director.
11. Amendments. None of the Subsidiaries' Articles of Incorporation or
Bylaws will be changed to increase liability of officers or directors or to
limit Executive's indemnification. Any repeal or modification of any
Subsidiary's Articles of Incorporation or Bylaws or any repeal or modification
of the relevant provisions of any applicable law will not in any way diminish
any of Executive's rights or Company's obligations under this Agreement. This
Agreement cannot be amended except with the written consent of Company and
Executive.
12. Governing Law. This Agreement will be governed by Michigan law.
13. Successors.
(a) This Agreement will be binding upon and inure to the benefit of
the parties and their respective heirs, legal representatives and assigns.
(b) Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of any Subsidiary to assume all of Company's obligations
under this Agreement. Such assumption will not release Company from its
obligations under this Agreement.
14. Severability. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will. remain binding in accordance with their terms.
15. Notices. All notices given under this Agreement will be in writing
and delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to Executive:
If to the Trust, the
Agent, the Company
or any Subsidiary: Venture Service Company
33662 James J. Pompo
Fraser, Michigan 48026
Attn: President
6
<PAGE> 7
or to such other address as either party furnishes to the other in writing.
16. Counterparts. This Agreement may be signed in counterpart.
17. Subsidiaries. As used in this Agreement, the term "subsidiary" means
any corporation in which any Subsidiary owns a majority interest.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
written above.
VENTURE HOLDINGS TRUST
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VEMCO, INC.
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VENTURE INDUSTRIES CORPORATION
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VENTURE INDUSTRIES CANADA LTD.
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VENTURE MOLD & ENGINEERING CORPORATION
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
7
<PAGE> 8
VENTURE LEASING COMPANY
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VEMCO LEASING, INC.
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VENTURE SERVICE COMPANY
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
VENTURE HOLDINGS CORPORATION
By: /s/ Larry J. Winget
-------------------------------------
-------------------------------------
/s/ Michael G. Torakis
-------------------------------------
MICHAEL G. TORAKIS, EXECUTIVE
8
<PAGE> 1
EXHIBIT 10.21
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on February 7,
1994, by and among Venture Holdings Trust (the "Trust"), Vemco, Inc., Venture
Industries Corporation, Venture Industries Canada Ltd., Venture Mold &
Engineering Corporation, Venture Leasing Company, Vemco Leasing, Inc., Venture
Holdings Corporation and Venture Service Company (collectively, the
"Subsidiaries"), and A. JAMES SCHUTZ ("Executive"). The Trust and the
Subsidiaries are referred to herein as the "Company."
Recitals
A. Executive serves as an officer and/or director of one or more of the
Subsidiaries and the Company desires Executive to continue in such capacities.
Executive is willing to continue to serve in such capacities if Executive
receives the protections provided by this Agreement.
B. Company believes that (1) litigation against corporate officers and
directors, regardless of whether meritorious, is expensive and time-consuming
for the official to defend; (2) there is a substantial risk of a large judgment
or settlement in litigation in which a corporate official was neither culpable
nor profited personally to the detriment of the corporation; (3) it is
increasingly difficult to attract and keep qualified officers and directors
because of such potential liabilities; and (4) it is important for officers and
directors to have assurance that indemnification will be available if they act
in accordance with reasonable business standards, it is in the best interests of
Company and its shareholders for Company to contractually obligate itself to
indemnify its officers and directors and to set forth the details of the
indemnification process.
C. Based upon the conclusions stated in Recital B above, to induce
Executive to continue to serve as one of the Company's officers and/or directors
and in consideration of Executive's continued service, Company wishes to enter
into this Agreement with Executive.
Therefore, Company and Executive agree as follows:
1. Indemnification
(a) The Subsidiaries and the Trust (collectively, the "Company")
jointly and severally agree to indemnify Executive to the fullest extent
permitted under applicable law if Executive was or is a party or threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding of any kind, whether civil, criminal administrative or investigative
and whether formal or informal (including actions by or in the right of Company
and any preliminary inquiry or claim by any person or authority), by reason of
the fact that Executive is or was a director, officer, partner, trustee,
employee or agent of Company or is or was servicing at Company's request as a
director, officer, employee or agent of another corporation (including a
subsidiary of any Subsidiary), limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise, whether or not for
profit, or by reason of anything done or not done by Executive in any such
capacity (collectively, "Covered Matters"). Such indemnification will cover all
<PAGE> 2
Expenses (as defined in paragraph 5(a) below), liabilities, judgments (including
punitive and exemplary damages), penalties, fines (including excise taxes
relating to employee benefit plans and civil penalties) and amounts paid in
settlement which are incurred or imposed upon Executive in connection with a
Covered Matter (collectively, "Indemnified Amounts
(b) Executive will be indemnified for all Indemnified Amounts and
Company will defend Executive against claims (including threatened claims and
investigations) in any way related to Executive's service as an officer or
director including claims brought by or on behalf of Company or any subsidiary
of any Subsidiary, except if it is finally determined by the court of last
resort (or by a lower court if not timely appealed) that (1) the payment is
prohibited by applicable law or (2) Executive engaged in intentional misconduct
for the primary purpose of significant personal financial benefit through
actions adverse to Company's and its shareholders' best interests. As used in
this Agreement, (1) "intentional misconduct" will not include violations of
disclosure or reporting requirements of federal securities laws or a breach of
fiduciary duties (including duties of loyalty or care) if Executive relied on
advice of counsel to Company, or otherwise reasonably believed that there was no
violation of such requirements or breach of fiduciary duty; and (2) "significant
personal financial benefit" will not include compensation or employee benefits
for past or prospective services to Company or Company's successor or in
connection with an agreement not to compete or similar agreement, or any benefit
received by directors or officers or shareholders of Company generally.
(c) If Executive is entitled under this Agreement to indemnification
for less than all of the amounts incurred by Executive in connection with a
Covered Matter, Company will indemnify Executive for the indemnifiable amount.
2. Agent for Trust and the subsidiaries. The Trust and the Subsidiaries
hereby appoint Venture Service Company ("Agent") as their agent for giving and
receiving certain notices relating to the Executive's indemnification claims,
and for making certain determinations relating to the Executive's right to
indemnification as further described herein.
3. Claims for Indemnification. Executive will give Agent written notice
of any claim for indemnification under this Agreement. Payment requests will
include a schedule setting forth in reasonable detail the amount requested and
will be accompanied (or, if necessary, followed) by copies of the relevant
invoices or other documentation. Upon the Agent's request, Executive will
provide the Trust with a copy of the document or pleading, if any, notifying
Executive of the Covered Matter. To the extent practicable, Company will pay
Indemnified Amounts directly without requiring Executive to make any prior
payment.
4. Determination of Right to Indemnification.
(a) Executive will be presumed to be entitled to indemnification
under this Agreement and will receive such indemnification, subject to paragraph
4(b) below, irrespective of whether the Covered Matter involves allegations of
intentional misconduct, alleged violations of
2
<PAGE> 3
Section 16(b) of the Securities Exchange Act of 1934, alleged violations of
Section 10(b) of the Securities Exchange Act of 1934 (including Rule l0b-5
thereunder), breach of Executive's fiduciary duties (including duties of loyalty
or care) or any other claim.
(b) If, in the opinion of counsel to the Agent, applicable law
permits indemnification in a Covered Matter only as authorized in the specific
case upon a determination that indemnification is proper in the circumstances
because Executive has met a standard of conduct established by applicable law,
and upon an evaluation of Indemnified Amounts to be paid in connection with such
Covered Matter, the following will apply:
(1) Agent will give Executive notice that a de termination and
evaluation will be made under this paragraph 4(b); such notice will be
given immediately after receipt of counsel's opinion that such a
determination and evaluation is necessary and will include a copy of such
opinion.
(2) Such determination and evaluation will be made in good
faith, as follows:
(A) by a majority vote of a quorum of Agent's Board of
Directors who are not parties or threatened to be made parties to the
Covered Matter in question ("Disinterested Directors") or, if such a
quorum is not obtainable, by a majority vote of a committee of
Disinterested Directors who are selected by the Board; or
(B) by an attorney or firm of attorneys, having no previous
relationship with Agent or Executive, which is selected by Agent and
Executive; or
(C) by all independent directors of Agent (as defined in
the Michigan Business Corporation Act) who are not parties or
threatened to be made parties to the Covered Matter.
(3) Executive will be entitled to a hearing before the entire
Board of Directors of Agent and any other person or persons making the
determination and evaluation under clause (2) above Executive will be
entitled to be represented by counsel at such hearing.
(4) The cost of a determination and evaluation under this
paragraph 4(b) (including attorneys' fees and other expenses incurred by
Executive in preparing for and attending the hearing contemplated by clause
(3) above and otherwise in connection with the determination and evaluation
under this paragraph 4(b)) will be borne by Company.
(5) The determination will be made as promptly as possible after
final adjudication of the Covered Matter.
3
<PAGE> 4
(6) Executive will be presumed to have met the required
standard of conduct under this Section 4(b) unless it is clearly
demonstrated to the determining body that Executive has not met the
required standard of conduct.
5. Advance of Expenses.
(a) Before final adjudication of a Covered Matter, upon Executive's
request pursuant to paragraph 2 above, Company will promptly either advance
Expenses directly or reimburse Executive for all Expenses. As used in this
Agreement, "Expenses" means all costs and expenses (including attorneys' fees,
expert fees, other professional fees and court costs) incurred by Executive in
connection with a Covered Matter other than judgments, penalties, fines and
settlement amounts.
(b) If, in the opinion of counsel to Agent, applicable law permits
advancement of Expenses only as authorized in the specific case upon a
determination that Executive has met a standard of conduct established by
applicable law, the determination will be made at Company's cost, in good faith
and as promptly as possible after Executive's request, in accordance with
clauses (1) through (4) and (6) of paragraph 4(b) above. Because of the
difficulties inherent in making any such determination before final disposition
of the Covered Matter, to the extent permitted by law such advance will be made
if (1) the facts then known to those persons making the determination, without
conducting a formal independent investigation, would not preclude advancement of
Expenses under applicable law and (2) Executive submits to Agent a written
affirmation of Executive's belief that Executive has met the standard of conduct
necessary for advancement of Expenses under the circumstances.
(c) Executive will repay any Expenses that are advanced under this
paragraph 5 if it is ultimately determined, in a final, non-appealable judgment
rendered by the court of last resort (or by a lower court if not timely
appealed), that Executive is not entitled to be indemnified against such
Expenses. This undertaking by Executive is an unlimited general undertaking but
no security for such undertaking will be required.
6. Defense of Claim.
(a) Except as provided in paragraph 6(c) below, Company, jointly with
any other indemnifying party, will be entitled to assume the defense of any
Covered Matter as to which Executive requests indemnification.
(b) Counsel selected by Executive to defend any Covered Matter will
be subject to Executive's advance written approval, which will not be
unreasonably withheld.
(c) Executive may employ Executive's own counsel in a Covered Matter
and be fully reimbursed therefor if (1) Agent approves, in writing, the
employment of such counsel or (2) either (A) Executive has reasonably concluded
that there may be a conflict of interest between
4
<PAGE> 5
Company and Executive or between Executive and other parties represented by
counsel employed by Agent to represent Executive in such action or (B) Agent has
not employed counsel reasonably satisfactory to Executive to assume the defense
of such Covered Matter promptly after Executive's request.
(d) Neither Company nor Executive will settle any Covered Matter
without the other's written consent, which will not be unreasonably withheld.
(e) If Executive is required to testify (in court proceedings,
depositions, informal interviews or otherwise), consult with counsel, furnish
documents or take any other reasonable action in connection with a Covered
Matter, Company will reimburse Executive for all reasonable expenses incurred by
Executive in connection therewith.
7. Disputes: Enforcement
(a) If there is a dispute relating to the validity or enforceability
of this Agreement or a denial of indemnification, advance of Expenses or payment
of any other amounts due under this Agreement or any of the Subsidiaries'
Articles of Incorporation or Bylaws, Company will provide such indemnification,
advance of Expenses or other payment until a final, non-appealable judgment that
Executive is not entitled to such indemnification, advance of Expenses or other
payment has been rendered by the court of last resort (or by a lower court if
not timely appealed). Executive will repay such amounts if such final,
non-appealable judgment so requires.
(b) Company will reimburse all of Executive's reasonable expenses
(including attorneys' fees) in pursuing an action to enforce Executive's rights
under this Agreement unless a final, non-appealable judgment against Executive
has been rendered in such action by the court of last resort (or by a lower
court if not timely appealed). At Executive's request, such expenses will be
advanced by Company to Executive as incurred before final resolution of such
action by the court of last resort; such expenses will be repaid by Executive if
a final, non-appealable judgment in Company's favor is rendered in such action
by the court of last resort (or by a lower court if not timely appealed).
8. Rights Not Exclusive. The indemnification provided to Executive
under this Agreement will be in addition to any indemnification provided to
Executive by any law, agreement, Board resolution, provision of the Articles of
Incorporation or Bylaws of any Subsidiary or otherwise.
9. Subrogation. Upon payment of any Indemnified Amount under this
Agreement, Company will be subrogated to the extent of such payment to all of
Executive's rights of recovery therefor and Executive will take all reasonable
actions requested by Company (at no cost or penalty to Executive) to secure
Company's rights under this paragraph 9 including executing documents.
5
<PAGE> 6
10. Continuation of Indemnity. All of Company's obligations under this
Agreement will continue as long as Executive is subject to any actual or
possible Covered Matter, notwithstanding Executive's termination of service as
an officer or director.
11. Amendments. None of the Subsidiaries' Articles of Incorporation or
Bylaws will be changed to increase liability of officers or directors or to
limit Executive's indemnification. Any repeal or modification of any
Subsidiary's Articles of Incorporation or Bylaws or any repeal or modification
of the relevant provisions of any applicable law will not in any way diminish
any of Executive's rights or Company's obligations under this Agreement. This
Agreement cannot be amended except with the written consent of Company and
Executive.
12. Governing Law. This Agreement will be governed by Michigan law.
13. Successors.
(a) This Agreement will be binding upon and inure to the benefit of
the parties and their respective heirs, legal representatives and assigns.
(b) Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of any Subsidiary to assume all of Company's obligations
under this Agreement. Such assumption will not release Company from its
obligations under this Agreement.
14. Severability. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will. remain binding in accordance with their terms.
15. Notices. All notices given under this Agreement will be in writing and
delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to Executive:
If to the Trust, the
Agent, the Company
or any Subsidiary: Venture Service Company
33662 James J. Pompo
Fraser, Michigan 48026
Attn: President
6
<PAGE> 7
or to such other address as either party furnishes to the other in writing.
16. Counterparts. This Agreement may be signed in counterpart.
17. Subsidiaries. As used in this Agreement, the term "subsidiary" means
any corporation in which any Subsidiary owns a majority interest.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
written above.
VENTURE HOLDINGS TRUST
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VEMCO, INC.
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE INDUSTRIES CORPORATION
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE INDUSTRIES CANADA LTD.
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE MOLD & ENGINEERING CORPORATION
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
7
<PAGE> 8
VENTURE LEASING COMPANY
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VEMCO LEASING, INC.
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE SERVICE COMPANY
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
VENTURE HOLDINGS CORPORATION
By: /s/ Michael G. Torakis
-------------------------------------
-------------------------------------
/s/ A. James Schutz
-------------------------------------
A. JAMES SCHUTZ, EXECUTIVE
8
<PAGE> 1
EXHIBIT 12.1
VENTURE HOLDINGS TRUST
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH
31, YEARS ENDED DECEMBER 31,
1999 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Earnings from continuing operations 8,106 14,207 11,523 1,999 4,142 7,445
Add back:
Taxes on Income 1,067 2,489 3,830 1,002 577 3,405
Fixed Charges 10,472 40,651 34,204 21,899 16,704 16,049
Amortization of previously capitalized interest 56 224 295 285 285 285
Deduct:
Capitalized interest 0 0 0 108 0 0
Earnings available for fixed charges 19,701 57,571 49,852 25,077 21,708 27,184
Fixed charges of Venture Holdings Trust:
Interest expense 9,479 36,641 30,182 19,248 15,032 14,345
Capitalized interest 0 0 0 108 0 0
Amortization of debt expense and debt discount 530 2,160 1,934 885 556 466
Interest portion of rent expense 463 1,850 2,088 1,658 1,116 1,238
------ ------ ------ ------ ------ ------
10,472 40,651 34,204 21,899 16,704 16,049
Ratio of earnings to fixed charges 1.88 1.42 1.46 1.15 1.30 1.69
</TABLE>
<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANTS
Set forth below are the directly and indirectly subsidiaries of Venture
Holdings Company LLC, including those subsidiaries that are co-registrants.
Unless otherwise indicated, all subsidiaries are wholly owned, directly or
indirectly, by Venture Holdings Company LLC. Also listed below is the state or
other jurisdiction of incorporation of each subsidiary, and the names under
which such subsidiaries do business.
<TABLE>
<CAPTION>
Other name(s) under which
Name Jurisdiction the company does business
- ---- ------------ -------------------------
<S> <C> <C>
Vemco, Inc. Michigan Quantum Polymer Processors, Inc.
Venture Grand Blanc
Venture Industries Corporation Michigan n/a
Venture Mold & Engineering Michigan Venture Industries Technical
Corporation Development Company
Venture Leasing Company Michigan n/a
Vemco Leasing, Inc. Michigan n/a
Venture Holdings Corporation Michigan Bailey
Venture Service Company Michigan Venture Holding
Venture Advanced Engineering
Venture Advanced Engineering
Group
Venture Manufacturing Group
Venture Holdings Group
Venture Mold Group
Venture Sales Group
Venture Industries Canada Ltd. Ontario, Canada n/a
Experience Management LLC Michigan Venture Management
Venture Europe, Inc. Michigan n/a
Venture EU Corporation Michigan n/a
Venture Germany GmbH Germany n/a
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
<S> <C> <C>
Venture Beteiligungs GmbH Germany n/a
Venture Verwaltungs GmbH Germany n/a
Peguform GmbH Germany n/a
Peguform France S.A. France n/a
Peguform Bohemia a.s. Czech Republic n/a
Peguform Iberica Spain n/a
Peguform Hella Mexico
S.A. de C.V. Mexico n/a
(70% owned joint venture)
Celulosa Fabril S.A. Spain n/a
(50% owned joint venture)
Inerga Components S.A. Spain n/a
Inerga Logistics S.L. Spain n/a
Peguform do Brasil Ltda. Brazil n/a
Peguform Argentina S.A. Argentina n/a
</TABLE>
2
<PAGE> 1
EXHIBIT 23.1
[DELOITTE & TOUCHE LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Venture Holdings
Company LLC on Form S-4 of our report dated March 30, 1999, appearing in
the prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the headings "Selected
Consolidated Financial Data" and "Experts" in such prospectus.
/s/ Deloitte & Touche LLP
July 9, 1999
<PAGE> 1
[BDO LETTERHEAD]
EXHIBIT 23.2
BDO Consent
INDEPENDENT AUDITOR'S CONSENT
We consent to the use in this Registration Statement of Venture Holdings
Company LLC on form S-4 of our report dated December 18, 1998, except for the
adjustments according to U.S. generally accepted accounting principles, as to
which the date is April 26, 1999, appearing in the prospectus, which is part of
this Registration Statement.
We also consent to the reference to us under the headings "Selected Consolidated
Financial Data" and "Experts" in such prospectus.
July 9, 1999
BDO International GmbH
Wirtschaftsprufungsgesellschaft
/s/ Moller /s/ Hoffmann
- -------------- --------------
Moller Hoffmann
<PAGE> 1
EXHIBIT 25.1
United States
Securities and Exchange Commission
Washington, D.C. 20549
----------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
----------------------------------
THE HUNTINGTON NATIONAL BANK
(Exact name of trustee as specified in its charter)
- ------------------------------------ 31-0966785
(Jurisdiction of incorporation or organization (IRS Employer
if not a U.S. national bank) Identification Number)
41 S. High Street
Columbus, Ohio 43215
(Address of principal executive offices) (Zip Code)
Richard A. Cheap, General Counsel and Secretary
The Huntington National Bank
41 S. High Street - HC3412
Columbus, Ohio 43215
Tel: (614) 480-4647
(Name, address and telephone number of agent for service)
---------------------------------------------------
VENTURE HOLDINGS TRUST
(Exact name of obligor as specified in its charter)
Michigan 38-6530870
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
33662 James J. Pompo Drive
Fraser, Michigan 48026 48026
(Address of principal executive offices) (Zip Code)
---------------------------------------------------
VENTURE HOLDINGS TRUST 11% SENIOR NOTES DUE 2007
Debt Securities
(Title of the indenture securities)
---------------------------------------------------
1
<PAGE> 2
GENERAL
Pursuant to General Instruction B of the Form T-1, the applicant is providing
responses to only Items 1, 2, and 16 of the Form T-1 since the obligor is not in
default.
Item 1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it is
subject.
Office of the Comptroller of the Currency Federal Deposit Insurance
Central District Corporation
One Financial Plaza Chicago Region
440 South LaSalle, Suite 2700 30 South Wacker Drive
Chicago, Illinois 60605 Chicago, Illinois 60505
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Federal Reserve Bank of Cleveland - District No. 4
1455 East Sixth Street
Cleveland, Ohio 44115
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
2
<PAGE> 3
16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect (see
Item 16, Exhibit 1 to Form T-1 filed in connection with Registration Statement
No. 33-80090 which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence Business
(see Item 16, Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-80090, which is incorporated by reference).
3. A copy of the authorization of the Trustee to exercise corporate trust
powers (see Item 16, Exhibit 3 to Form T-1 filed in connection with Registration
Statement No. 33-80090, which is incorporated by reference).
4. A copy of the existing By Laws of the Trustee (see Item 16, Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-80090, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321 (b) of the Act (see Item
16, Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-80090, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published pursuant
to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Huntington National Bank, a national association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Columbus and State of Ohio, on the 25th day of
June, 1999.
THE HUNTINGTON NATIONAL BANK
--------------------------------
(Trustee)
By: /s/ Candada J. Moore
-----------------------------
Candada J. Moore, Vice President
(Name and Title)
3
<PAGE> 4
Exhibit 7 to Form T-1
<TABLE>
<S><C>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
[LOGO]
|1|
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES -- FFIEC 031
REPORT AT THE CLOSE OF BUSINESS MARCH 31, 1999 (19990331)
----------
(RCRI 9999)
This report is required by law: 12 U.S.C. ss.324 (State This report form is to be filed by banks with branches and
member banks); 12 U.S.C. ss.1817 (State nonmember banks); consolidated subsidiaries in U.S. territories and possessions,
and 12 U.S.C. ss.161 (National banks). Edge or Agreement subsidiaries, foreign branches, consolidated
foreign subsidiaries, or International Banking Facilities.
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by The Reports of Condition and Income are to be prepared in
an authorized officer and the Report of Condition must be accordance with Federal regulatory authority instructions.
attested to by not less than two directors (trustees) for
State nonmember banks and three directors for State member We, the undersigned directors (trustees), attest to the
and National banks. correctness of the Report of Condition (including the
supporting schedules) for this report date and declare that it
I, John VanFleet, SVP and Controller has been examined by us and to the best of our knowledge and
--------------------------------------------------------- belief has been prepared in conformance with the instructions
Name and Title of Officer Authorized to Sign Report issued by the appropriate Federal regulatory authority and is
true and correct.
of the named bank do hereby declare that the Reports of
Condition and Income (including the supporting schedules)
for this report date have been prepared in conformance with
the instructions issued by the appropriate Federal
regulatory authority and are true to the best of my
knowledge and belief. -----------------------------------------------------------
Director (Trustee)
John D. VanFleet
- ----------------------------------------------------------- -----------------------------------------------------------
Signature of Officer Authorized to Sign Report Director (Trustee)
- ----------------------------------------------------------- -----------------------------------------------------------
Date of Signature Director (Trustee)
April 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
SUBMISSION OF REPORTS
Each bank must prepare its Reports of Condition and Income For electronic filing assistance, contact EDS Call Report
either: Services 2150 N. Prospect Ave., Milwaukee, WI 53202, telephone
(800) 255-1571.
(a) in electronic form and then file the computer data file
directly with the banking agencies' collection agent, To fulfill the signature and attestation requirement for the
Electronic Data Systems Corporation (EDS), by modem or Reports of Condition and Income for this report date, attach
on computer diskette; or this signature page (or a photocopy or a computer-generated
version of this page) to the hard-copy record of the completed
(b) in hard-copy (paper) form and arrange for another party report that the bank places in its files.
to convert the paper report to electronic form. That
party (if other than EDS) must transmit the bank's
computer data file to EDS.
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number | | | | | | (RCRI 9050) Huntington National Bank
-----------------------------------------------------------
Legal Title of Bank (Text 9010)
Columbus
-----------------------------------------------------------
City (TEXT 9130)
OH 43215
-----------------------------------------------------------
State Abbrev. (TEXT 9200) ZIP Code (TEXT 9220)
Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-1
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1999-MARCH 31, 1999
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
SCHEDULE RI--INCOME STATEMENT
<TABLE>
<CAPTION>
----
I480 <-
------------
Year-to-date
----------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate................................................. 4011 128,762 1.a.(1)(a)
(b) Loans to depository institutions............................................. 4019 493 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers.......... 4024 2,338 1.a.(1)(c)
(d) Commercial and industrial loans.............................................. 4012 115,073 1.a.(1)(d)
(e) Acceptances of other banks................................................... 4026 17 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans.......................................... 4054 16,393 1.a.(1)(f)(1)
(2) Other................................................................... 4055 109,130 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions....................... 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political
subdivisions in the U.S.:
(1) Taxable obligations..................................................... 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations.................................................. 4504 1,334 1.a.(1)(h)(2)
(i) All other loans in domestic offices.......................................... 4058 56 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 4059 0 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases.................................................................... 4505 42,274 1.b.(1)
(2) Tax-exempt leases................................................................. 4307 0 1.b.(2)
c. Interest income on balances due from depository institutions: (1)
(1) In domestic offices............................................................... 4105 20 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 4106 68 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations (INCLUDING
MORTGAGE-BACKED SECURITIES ISSUED OR GUARANTEED BY FNMA, FHLMC, OR GNMA).......... 4027 67,561 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities........................................................... 4506 1,195 1.d.(2)(a)
(b) Tax-exempt securities........................................................ 4507 3,373 1.d.(2)(b)
(3) Other domestic debt securities (INCLUDING MORTGAGE-BACKED SECURITIES NOT ISSUED OR
GUARANTEED BY FNMA, FHLMC, OR GNMA)............................................... 3657 5,159 1.d.(3)
(4) Foreign debt securities........................................................... 3658 61 1.d.(4)
(5) Equity securities (including investments in mutual funds)......................... 3659 453 1.d.(5)
e. Interest income from trading assets.................................................... 4069 32 1.e
</TABLE>
- -----------------
(1) Includes interest income on time certificates of deposit not held for
trading.
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-2
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
-----------------
Dollar Amounts in Thousands Year-to-date
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest income (continued) RIAD Bil Mil Thou
f. Interest income on federal funds sold and securities purchased under
agreements to resell ................................................ 4020 548 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ 4107 494,340 1.g.
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) .............. 4508 5,911 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) ................... 4509 18,802 2.a.(1)(b)(1)
(2) Other savings deposits .................................. 4511 28,409 2.a.(1)(b)(2)
(3) Time deposits of $100,000 or more ....................... A517 22,809 2.a.(1)(b)(3)
(4) Time deposits of less than $100,000 ..................... A518 78,518 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs .......................................... 4172 3,395 2.a.(2)
b. Expense of federal funds purchased and securities sold under
agreements to repurchase ............................................ 4180 27,577 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and other borrowed money ............................... 4185 37,057 2.c.
d. Not applicable
e. Interest on subordinated notes and debentures ....................... 4200 11,084 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... 4073 233,562 2.f.
3. Net interest income (item 1.g minus 2.f) ............................... RIAD 4074 260,778 3.
4. Provisions:
a. Provision for credit losses ......................................... RIAD 4230 25,305 4.a.
b. Provision for allocated transfer risk ............................... RIAD 4243 0 4.b.
5. Noninterest income:
a. Income from fiduciary activities .................................... 4070 13,433 5.a.
b. Service charges on deposit accounts in domestic offices ............. 4080 37,035 5.b.
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) .............................................. A220 1,712 5.c.
d.-e. Not applicable
f. Other noninterest income:
(1) Other fee income ................................................ 5407 40,169 5.f.(1)
(2) All other noninterest income*.................................... 5408 12,878 5.f.(2)
g. Total noninterest income (sum of item 5.a through 5.f) .............. RIAD 4079 105,227 5.g.
6. a. Realized gains (losses) on held-to-maturity securities .............. RIAD 3521 0 6.a.
b. Realized gains (losses) on available-for-sale securities ............ RIAD 3196 2,330 6.b.
7. Noninterest expense:
a. Salaries and employee benefits ...................................... 4135 96,386 7.a.
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest) .... 4217 29,896 7.b.
c. Other noninterest expense* .......................................... 4092 72,577 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) ............ RIAD 4093 198,859 7.d.
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b,
and 7.d)................................................................ RIAD 4301 144,171 8.
9. Applicable income taxes (on item 8) .................................... RIAD 4302 47,046 9.
10. Income (loss) before extraordinary items and other adjustments (item 8
minus 9)................................................................ RIAD 4300 97,125 10.
11. Extraordinary items and other adjustments, net of income taxes* ........ RIAD 4320 0 11.
12. Net income (loss) (sum of items 10 and 11) ............................. RIAD 4340 97,125 12.
</TABLE>
- ------------
*Describe on Schedule RI-E--Explanations.
4
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-3
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
-----
I481 <-
----------------
Year-to-date
-----------------
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after
August 7, 1986, that is not deductible for federal income tax purposes............................ 4513 850 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
(included in Schedule RI, item 8)................................................................. 8431 6,747 M.2.
3.-4. Not applicable
5. Number of full-time equivalent employees at end of current period (round to Number
nearest whole number)............................................................................. 4150 9,603 M.5.
6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push down RIAD CC YY MM DD
accounting this calendar year, report the date of the bank's acquisition (1) ..............9106 00 00 00 00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c): Bil Mil Thou
a. Interest rate exposures..................................................................... 8757 1,366 M.8.a.
b. Foreign exchange exposures.................................................................. 8758 346 M.8.b.
c. Equity security and index exposures......................................................... 8759 0 M.8.c.
d. Commodity and other exposures............................................................... 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income.................................................. 8761 2,878 M.9.a.
b. Net (increase) decrease to interest expense................................................. 8762 3,736 M.9.b.
c. Other (noninterest) allocations............................................................. 8763 1,105 M.9.c.
10. Credit losses on off-balance sheet derivatives (see instructions)................................ A251 0 M.10.
11. Does the reporting bank have a Subchapter S election in effect for federal income tax YES NO
purposes for the current tax year?............................................................... A530 X M.11.
12. Deferred portion of total applicable income taxes included in Schedule RI, Bil Mil Thou
items 9 and 11 (to be reported with the December Report of Income)............................... 4772 N/A M.12.
</TABLE>
- ------------
(1) For example, a bank acquired on June 1, 1997, would report 19970601.
5
<PAGE> 8
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High Street Page RI-4
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-A -- CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>
-----
I483 <-
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total equity capital originally reported in the
December 31, 1998, Reports of Condition and Income................ 3215 2,208,624 1.
2. Equity capital adjustments from amended Reports of
Income, net*...................................................... 3216 0 2.
3. Amended balance end of previous calendar year
(sum of items 1 and 2)............................................ 3217 2,208,624 3.
4. Net income (loss) (must equal Schedule RI, item 12)............... 4340 97,125 4.
5. Sale, conversion, acquisition, or retirement of
capital stock, net................................................ 4346 0 5.
6. Changes incident to business combinations, net.................... 4356 18,455 6.
7. LESS: Cash dividends declared on preferred stock................. 4470 0 7.
8. LESS: Cash dividends declared on common stock.................... 4460 47,284 8.
9. Cumulative effect of changes in accounting principles
from prior years* (see instructions for this schedule)............ 4411 0 9.
10. Corrections of material accounting errors from prior
years* (see instructions for this schedule)....................... 4412 0 10.
11. a. Change in net unrealized holding gains (losses) on
available-for-sale securities................................ 8433 (42,620) 11.a.
b. CHANGE IN ACCUMULATED NET GAINS (LOSSES) ON CASH
FLOW HEDGES.................................................. 4574 0 11.b.
12. Foreign currency translation adjustments.......................... 4414 0 12.
13. Other transactions with parent holding company* (not
included in items 5, 7, or 8 above)............................... 4415 0 13.
14. Total equity capital end of current period (sum of
items 3 through 13) (must equal Schedule RC, item 28)............. 3210 2,234,300 14.
</TABLE>
*Describe on Schedule RI-E--Explanations.
SCHEDULE RI-B--CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES AND CHANGES IN
ALLOWANCE FOR CREDIT LOSSES
PART I. Charge-Offs and Recoveries on Loans and Leases
PART I Excludes Charge-Offs and Recoveries through the Allocated Transfer Risk
Reserve.
<TABLE>
<CAPTION>
-----
I486 <-
--------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
---------------------- -------------------
Calendar year-to-date
--------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile)............................... 4651 1,775 4661 756 1.a.
b. To non-U.S. addressees (domicile)........................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of other banks:
a. To U.S. banks and other U.S. depository institutions........ 4653 0 4663 0 2.a.
b. To foreign banks............................................ 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to
farmers.......................................................... 4655 7 4665 1 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)............................... 4645 5,022 4617 759 4.a.
b. To non-U.S. addressees (domicile)........................... 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and other personal
expenditures:
a. Credit cards and related plans.............................. 4656 6,415 4666 1,109 5.a.
b. Other (includes single payment, installment, and all
student loans).............................................. 4657 16,560 4667 4,364 5.b.
6. Loans to foreign governments and official institutions........... 4643 0 4627 0 6.
7. All other loans.................................................. 4644 0 4628 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile)............................... 4658 2,752 4668 355 8.a.
b. Of non-U.S. addressees (domicile)........................... 4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8)................................. 4635 32,531 4605 7,344 9.
</TABLE>
6
<PAGE> 9
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High Street Page RI-5
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-B--CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Charge-offs Recoveries
----------------------------------------
Memoranda Calendar year-to-date
----------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1-3. Not applicable
4. Loans to finance commercial real estate, construction, and land
development activities (NOT SECURED BY REAL ESTATE) included in
Schedule RI-B, part I, items 4 and 7, above................................ 5409 0 5410 0 M.4.
5. Loans secured by real estate in domestic offices (included in
Schedule RI-B, part I, item 1, above):
a. Construction and land development.................................. 3582 119 3583 0 M.5.a.
b. Secured by farmland..................................................... 3584 0 3585 0 M.5.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit....................... 5411 821 5412 96 M.5.c.(1)
(2) All other loans secured by 1-4 family residential properties........ 5413 223 5414 103 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties............... 3588 0 3589 0 M.5.d.
e. Secured by nonfarm nonresidential properties............................ 3590 612 3591 557 M.5.e.
</TABLE>
PART II. CHANGES IN ALLOWANCE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Balance originally reported in the December 31, 1998, Reports of Condition and Income.............. 3124 288,315 1.
2. Recoveries (must equal or exceed part I, item 9, column B above)................................... 2419 7,344 2.
3. LESS: Charge-offs (must equal or exceed part I, item 9, column A above)............................ 2432 32,531 3.
4. Provision for credit losses (must equal Schedule RI, item 4.a)..................................... 4230 25,305 4.
5. Adjustments* (see instructions for this schedule).................................................. 4815 2,543 5.
6. Balance end of current period (sum of items 1 through 5) (must equal or exceed
Schedule RC, item 4.b)............................................................................. A512 290,976 6.
</TABLE>
- -----------------
* Describe on Schedule RI-E--Explanations.
7
<PAGE> 10
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-6
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
<TABLE>
<CAPTION>
-----
I492 <--
------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries,
and IBF's
a. Interest income booked........................................................................ 4837 N/A 1.a.
b. Interest expense booked....................................................................... 4838 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and
IBFs (item 1.a minus 1.b)..................................................................... 4839 N/A 1.c.
2. Adjustments for booking location of international operations:
a. Net interest income attributable to international operations booked at domestic offices....... 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign offices............... 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b).......................................... 4842 N/A 2.c.
3. Noninterest income and expense attributable to international operations:
a. Noninterest income attributable to international operations................................... 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international operations.................. 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations............................ 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a
minus 3.b and 3.c)............................................................................ 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before capital allocation
adjustment (sum of items 1.c, 2.c, and 3.d)...................................................... 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect
the effects of equity capital on overall bank funding costs...................................... 4845 N/A 5.
6. Estimated pretax income attributable to international operations after capital allocation
adjustment(sum of times 4 and 5)................................................................. 4846 N/A 6.
7. Income taxes attributable to income from international operations as estimated in item 6......... 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus 7)................... 4341 N/A 8.
</TABLE>
Memoranda
<TABLE>
<CAPTION>
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Intracompany interest income included in item 1.a above.......................................... 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above......................................... 4848 N/A M.2.
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income booked at IBFs................................................................... 4849 N/A 1.
2. Interest expense booked at IBFs.................................................................. 4850 N/A 2.
3. Noninterest income attributable to international operations booked at domestic offices
(excluding IBFs):
a. Gains (losses) and extraordinary items........................................................ 5491 N/A 3.a.
b. Fees and other noninterest income............................................................. 5492 N/A 3.b.
4. Provisions for loan and lease losses attributable to international operations booked at domestic
offices (excluding IBFs)......................................................................... 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at domestic offices
(excluding IBFs)................................................................................. 4853 N/A 5.
</TABLE>
8
<PAGE> 11
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-7
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-E--EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other noninterest
income and other noninterest expense in Schedule RI. (See instructions for
details.)
<TABLE>
<CAPTION>
-----
I495 <-
-----------------
Year-to-date
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2):
a. Net gains (losses) on other real estate owned .............................................. 5415 0 1.a.
b. Net gains (losses) on sales of loans ....................................................... 5416 0 1.b.
c. Net gains (losses) on sales of premises and fixed assets.................................... 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 5.f.(2):
d. TEXT 4461 Income from Bank-Owned Life Insurance (BOLI) 4461 9,390 1.d.
e. TEXT 4462 Net losses on lease-and residuals 4462 1,468 1.e.
f. TEXT 4463 4463 1.f.
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets .................................................. 4531 8,592 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net (gains) losses on other real estate owned .............................................. 5418 0 2.b.
c. Net (gains) losses on sales of loans ....................................................... 5419 0 2.c.
d. Net (gains) losses on sales of premises and fixed assets ................................... 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 7.c:
e. TEXT 4464 none 4464 0 2.e.
f. TEXT 4467 4467 2.f.
g. TEXT 4468 4468 2.g.
3. Extraordinary items and other adjustments and applicable income tax effect
(from Schedule RI, item 11) (itemize and describe all extraordinary items and
other adjustments):
a. (1) TEXT 6373 Effect of adopting FAS 133, "Accounting for Deriva 6373 0 3.a.(1)
(2) Applicable income tax effect RIAD 4486 0 3.a.(2)
b. (1) TEXT 4487 4487 3.b.(1)
(2) Applicable income tax effect RIAD 4488 3.b.(2)
c. (1) TEXT 4489 4489 3.c.(1)
(2) Applicable income tax effect RIAD 4491 3.c.(2)
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2)
(itemize and describe all adjustments):
a. TEXT 4492 n/a 4492 0 4.a.
b. TEXT 4493 4493 4.b.
5. Cumulative effect of change in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles):
a. TEXT 4494 n/a 4494 0 5.a.
b. TEXT 4495 4495 5.b.
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10)
(itemize and describe all corrections):
a. TEXT 4496 n/a 4496 0 6.a.
b. TEXT 4497 4497 6.b.
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-8
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-E--CONTINUED
<TABLE>
<CAPTION>
--------------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S><C> <C> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13)
(itemize and describe all such transactions):
a. TEXT 4498 n/a 4498 0 7.a.
b. TEXT 4499 4499 7.b.
8. Adjustments to allowance for credit losses (from Schedule RI-B, part II, item 5)
(itemize and describe all adjustments):
a. TEXT 4521 Change incident to business combination 4521 2,543 8.a.
b. TEXT 4522 4522 8.b.
9. Other explanations (the space below is provided for the bank to briefly describe, at its I498 I499
option, any other significant items affecting the Report of Income):
No comment [X] (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-1
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC -- BALANCE SHEET
<TABLE>
<CAPTION>
-----
C400 <--
------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) ....................................... 0081 957,763 1.a.
b. Interest-bearing balances (2) ............................................................... 0071 1,693 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .................................. 1754 23,044 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ................................ 1773 5,318,512 2.b.
3. Federal funds sold and securities purchased under agreements to resell ......................... 1350 22,730 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 19,991,705 4.a.
b. LESS: Allowance for loan and lease losses ................... RCFD 3123 290,976 4.b.
c. LESS: Allocated transfer risk reserve ....................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ......................................... 2125 19,700,729 4.d.
5. Trading assets (from Schedule RC-D) ............................................................ 3545 6,466 5.
6. Premises and fixed assets (including capitalized leases) ....................................... 2145 446,342 6.
7. Other real estate owned (from Schedule RC-M) ................................................... 2150 17,853 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)........ 2130 7,696 8.
9. Customers' liability to this bank on acceptances outstanding ................................... 2155 19,402 9.
10. Intangible assets (from Schedule RC-M) ......................................................... 2143 751,923 10.
11. Other assets (from Schedule RC-F) .............................................................. 2160 1,138,695 11.
12. Total assets (sum of items 1 through 11) ....................................................... 2170 28,412,848 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
11
<PAGE> 14
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-2
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
part I) .................................................................................... RCON 2200 18,993,560 13.a.
(1) Noninterest-bearing(1) ................................ RCON 6631 2,982,925 13.a.(1)
(2) Interest-bearing ...................................... RCON 6636 16,010,635 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E,
part II) ................................................................................... RCFN 2200 209,856 13.b.
(1) Noninterest-bearing ................................... RCFN 6631 0 13.b.(1)
(2) Interest-bearing ...................................... RCFN 6636 209,856 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase .................... RCFD 2800 2,571,414 14.
15. a. Demand notes issued to the U.S. Treasury ................................................... RCON 2840 27,000 15.a.
b. Trading liabilities (from Schedule RC-D) ................................................... RCFD 3548 0 15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less .............................................. RCFD 2332 1,477,541 16.a.
b. With a remaining maturity of more than one year through three years ........................ RCFD A547 1,390,149 16.b.
c. With a remaining maturity of more than three years ......................................... RCFD A548 237,985 16.c.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding ...................................... RCFD 2920 19,402 18.
19. Subordinated notes and debentures(2) .......................................................... RCFD 3200 767,901 19.
20. Other liabilities (from Schedule RC-G) ........................................................ RCFD 2930 483,740 20.
21. Total liabilities (sum of items 13 through 20) ................................................ RCFD 2948 26,178,548 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ................................................. RCFD 3838 0 23.
24. Common stock .................................................................................. RCFD 3230 40,000 24.
25. Surplus (exclude all surplus related to preferred stock) ...................................... RCFD 3839 832,836 25.
26. a. Undivided profits and capital reserves ..................................................... RCFD 3632 1,379,554 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ..................... RCFD 8434 (18,090) 26.b.
c. Accumulated net gains (losses) on cash flow hedges ......................................... RCFD 4336 0 26.c.
27. Cumulative foreign currency translation adjustments ........................................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) ............................................. RCFD 3210 2,234,300 28.
29. Total liabilities and equity capital (sum of items 21 and 28) ................................. RCFD 3300 28,412,848 29.
</TABLE>
<TABLE>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1998 ................................................................ RCFD 6724 2 M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a
certified public accounting firm which submits a
report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted
auditing standards by a certified public accounting
firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
4 = Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5 = Review of the bank's financial statements by external
auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
12
<PAGE> 15
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-3
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-A--CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading
<TABLE>
<CAPTION>
----
C405 <-
---------------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
----------------- -----------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and
coin................................................................... 0022 509,033 1.
a. Cash items in process of collection and unposted debits ........... 0020 244,129 1.a.
b. Currency and coin .................................................. 0080 264,904 1.b.
2. Balances due from depository institutions in the U.S................... 0082 145,140 2.
a. U.S. branches and agencies of foreign banks (including their IBFs).. 0083 0 2.a.
b. Other commercial banks in the U.S. and other depository institutions
in the U.S. (including their IBFs) ................................. 0085 145,140 2.b.
3. Balances due from banks in foreign countries and foreign central banks 0070 0 3.
a. Foreign branches of other U.S. banks ............................... 0073 0 3.a.
b. Other banks in foreign countries and foreign central banks ......... 0074 0 3.b.
4. Balances due from Federal Reserve Banks ............................... 0090 305,283 0090 305,283 4.
5. Total (sum of items 1 through 4) (total of column A must equal
Schedule RC, sum of items 1.a and 1.b) ................................ 0010 959,456 0010 959,456 5.
---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2,
column B above) ........................................................................................... 0050 143,447 M.1.
</TABLE>
SCHEDULE RC-B--SECURITIES
Exclude assets held for trading.
<TABLE>
<CAPTION>
----
C410 <-
-----------------------------------------------------------------------------------
Held -To-maturity Available-for-sale
-----------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amoritzed Cost Fair Value (1)
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury Securities .......... 0211 156 0213 156 1286 745,580 1287 736,861 1.
2. U.S. Government agency obligations
(exclude mortgage-backed
securities):
a. Issued by U.S. Government
agencies (2) .................. 1289 0 1290 0 1291 0 1293 0 2.a.
b. Issued by U.S.Government-sponsored
agencies (3) .................. 1294 0 1295 0 1297 1,441,258 1298 1,428,169 2.b.
</TABLE>
- ---------------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, Resolution Funding Corporation, the Student Loan
Marketing Association, and the Tennessee Valley Authority.
13
<PAGE> 16
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-4
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
----------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amoritzed Cost Fair Value (1)
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3. Securities issued by states
and political subdivisions
in the U.S.:
a. General obligations ....... 1676 8,590 1677 8,691 1678 226,688 1679 226,797 3.a.
b. Revenue obligations ....... 1681 14,298 1686 14,567 1690 61,472 1691 62,175 3.b.
c. Industrial development
and similar obligations ... 1694 0 1695 0 1696 0 1697 0 3.c.
4. Mortgage-backed
securities (MBS):
a. Pass-through securities:
(1) Guaranteed by
GNMA .................. 1698 0 1699 0 1701 46,327 1702 47,290 4.a.(1)
(2) Issued by FNMA
and FHLMC ............. 1703 0 1705 0 1706 1,533,216 1707 1,524,292 4.a.(2)
(3) Other pass-through
securities ............ 1709 0 1710 0 1711 0 1713 0 4.a.(3)
b. Other mortagage-backed
securities (include CMOs,
REMICs, and stripped
MBS):
(1) Issued or guaranteed
by FNMA, FHLMC,
or GNMA ............... 1714 0 1715 0 1716 949,422 1717 949,373 4.b.(1)
(2) Collateralized
by MBS issued or
guaranteed by FNMA,
FHLMC, or GNMA ........ 1718 0 1719 0 1731 40 1732 40 4.b.(2)
(3) All other mortgage-backed
securities ............ 1733 0 1734 0 1735 0 1736 0 4.b.(3)
5. Other debt securities:
a. Other domestic debt
securities ................ 1737 0 1738 0 1739 309,287 1741 310,322 5.a.
b. Foreign debt
securities ................ 1742 0 1743 0 1744 3,499 1746 3,500 5.b.
6. Equity securities:
a. Investments in mutual
Funds and other equity
securities with readily
determinable fair values .. A510 0 A511 0 6.a.
b. All other equity
securities(1) ............. 1752 29,693 1753 29,693 6.b.
7. Total (sum of items 1
through 6) (total of
column A must equal
Schedule RC, item 2.a.)
(total of column D must
equal Schedule RC,
item 2.b) .................... 1754 23,044 1771 23,414 1772 5,346,482 1773 5,318,512 7.
</TABLE>
- -------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b., column D.
14
<PAGE> 17
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-5
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
-----
Memoranda C412 <-
-----------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Pledged securities(1) .............................................................. 0416 2,267,548 M.1.
2. Maturity and repricing data for DEBT securities(1),(2) (excluding those in
nonaccrual status):
a. Securities issued by the U.S. Treasury, U.S. Government agencies, and states and
political subdivisions in the U.S.; other non-mortgage debt securities; and
mortgage pass-through securities other than those backed by closed-end first lien
1-4 family residential mortgages with a remaining maturity or repricing frequency
of:(3)(4)
(1) Three months or less ........................................................ A549 4,155 M.2.a.(1)
(2) Over three months through 12 months ......................................... A550 7,672 M.2.a.(2)
(3) Over one year through three years ........................................... A551 195,049 M.2.a.(3)
(4) Over three years through five years ......................................... A552 1,286,896 M.2.a.(4)
(5) Over five years through 15 years ............................................ A553 1,190,496 M.2.a.(5)
(6) Over 15 years ............................................................... A554 106,600 M.2.a.(6)
b. Mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or repricing frequency of:(3)(5)
(1) Three months or less ........................................................ A555 0 M.2.b.(1)
(2) Over three months through 12 months ......................................... A556 0 M.2.b.(2)
(3) Over one year through three years ........................................... A557 9 M.2.b.(3)
(4) Over three years through five years ......................................... A558 0 M.2.b.(4)
(5) Over five years through 15 years ............................................ A559 801,981 M.2.b.(5)
(6) Over 15 years ............................................................... A560 769,592 M.2.b.(6)
c. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS; exclude
mortgage pass-through securities) with an expected average life of: (6)
(1) Three years or less ......................................................... A561 51,284 M.2.c.(1)
(2) Over three years ............................................................ A562 898,129 M.2.c.(2)
d. Debt securities with a REMAINING MATURITY of one year or less (included in
Memorandum items 2.a. through 2.c above) ........................................ A248 50,647 M.2.d.
3.-6. Not applicable
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-
sale or trading securities during the calendar year-to-date (report the amortized
cost at date of sale or transfer) .................................................. 1778 0 M.7.
8. NOT APPLICABLE
9. Structured notes (included in the held-to-maturity and available-for-sale accounts
in Schedule RC-B, items 2, 3, and 5):
a. Amortized cost .................................................................. 8782 0 M.9.a.
b. Fair value ...................................................................... 8783 0 M.9.b.
</TABLE>
- ----------------------
(1) Includes held-to-maturity securities at amortized cost and
available-for-sale securities at fair value.
(2) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(3) Report fixed rate debt securities by remaining maturity and floating rate
debt securities by reporting frequency.
(4) Sum of Memorandum items 2.a.(1) through 2.a.(6) plus any nonaccrual debt
securities in the categories of debt securities reported in Memorandum item
2.a that are included in Schedule RC-N, item 9, column C, must equal
Schedule RC-B, sum of items 1, 2, 3, and 5, columns A and D, plus mortgage
pass-through securities other than those backed by closed-end first lien 1-4
family residential mortgages included in Schedule RC-B, item 4.a, columns A
and D.
(5) Sum of Memorandum items 2.b.(1) through 2.b.(6) plus any nonaccrual
mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages included in Schedule RC-N, item 9,
column C, must equal Schedule RC-B, item 4.a, sum of columns A and D, less
the amount of mortgage pass-through securities other than those backed by
closed-end first lien 1-4 family residential mortgages included in Schedule
RC-B, item 4.a columns A and D.
(6) Sum of Memorandum items 2.c.(1) and 2.c.(2) plus any nonaccrual "Other
mortgage-backed securities" included in Schedule RC-N, item 9,
column C, must equal Schedule RC-B, item 4.b, sum of columns A and D.
15
<PAGE> 18
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-6
City, State Zip: Columbus, OH 43287 Printed 06/02/1999 at 15:00
FDIC Certificate No: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-C--LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowance for loan and lease losses from amounts reported in
this schedule. Report total loans and leases, net of unearned income. Exclude
assets held for trading and commercial paper.
<TABLE>
<CAPTION>
--------
C415 <-
---------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
---------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate............................................. 1410 8,314,657 1.
a. Construction and land development..................................... 1415 765,304 1.a.
b. Secured by farmland (including farm residential and other
improvements)......................................................... 1420 42,158 1.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit..................... 1797 1,452,196 1.c.(1)
(2) All other loans secured by 1-4 family residential properties:
(a) Secured by first liens........................................ 5367 1,878,449 1.c.(2)(a)
(b) Secured by junior liens....................................... 5368 788,802 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties............. 1460 185,533 1.d.
e. Secured by nonfarm nonresidential properties.......................... 1480 3,202,215 1.e.
2. Loans to depository institutions:
a. To commercial banks in the U.S. ...................................... 1505 22,115 2.a.
(1) To U.S. branches and agencies of foreign banks.................... 1506 0 2.a.(1)
(2) To other commercial banks in the U.S. ............................ 1507 22,115 2.a.(2)
b. To other depository institutions in the U.S. ......................... 1517 12,000 1517 12,000 2.b.
c. To banks in foreign countries......................................... 1510 0 2.c.
(1) To foreign branches of other U.S. banks........................... 1513 0 2.c.(1)
(2) To other banks in foreign countries............................... 1516 0 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers...... 1590 111,614 1590 111,614 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)......................................... 1763 4,576,582 1763 4,576,582 4.a.
b. To non-U.S. addressees (domicile)..................................... 1764 0 1764 0 4.b.
5. Acceptances of other banks:
a. Of U.S. banks......................................................... 1756 94 1756 94 5.a.
b. Of foreign banks...................................................... 1757 592 1757 592 5.b.
6. Loans to individuals for household, family, and other personal
expenditures (i.e., consumer loans) (includes purchased paper)........... 1975 4,529,490 6.
a. Credit cards and related plans (includes check credit and other
revolving credit plans)............................................... 2008 527,171 6.a.
b. Other (includes single payment, installment, and all student loans)... 2011 4,002,319 6.b.
7. Loans to foreign governments and official institutions (including
foreign central banks)................................................... 2081 0 2081 0 7.
8. Obligations (other than securities and leases) of states and political
subdivisions in the U.S. ................................................ 2107 92,772 2107 92,772 8.
9. Other loans.............................................................. 1563 205,804 9.
a. Loans for purchasing or carrying securities (secured and unsecured)... 1545 48,942 9.a.
b. All other loans (exclude consumer loans).............................. 1564 156,862 9.b.
10. Lease financing receivables (net of unearned income)..................... 2165 2,126,229 10.
a. Of U.S. addressees (domicile)......................................... 2182 2,126,229 10.a.
b. Of non-U.S. addressees (domicile)..................................... 2183 0 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above.......... 2123 244 2123 244 11.
12. Total loans and leases, net of unearned income (sum of items 1
through 10 minus item 11) (total of column A must equal
Schedule RC, item 4.a)................................................... 2122 19,991,705 2122 19,991,705 12.
</TABLE>
16
<PAGE> 19
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-7
City, State Zip: Columbus, OH 43287 Printed 06/02/1999 at 15:00
FDIC Certificate No.: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-C-- CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
Memoranda ------------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Not applicable
2. Loans and leases restructured and in compliance with modified terms (included in Schedule
RC-C, part I, above and not reported as past due or nonaccrual in Schedule RC-N,
Memorandum item 1):
a. Loans secured by real estate:
(1) To U.S. addressees (domicile)....................................................... RCFD 1687 2,214 M.2.a.(1)
(2) To non-U.S. addressees (domicile)................................................... RCFD 1689 0 M.2.a.(2)
b. All other loans and all lease financing receivables (exclude loans to individuals for
household, family, and other personal expenditures)...................................... RCFD 8691 550 M.2.b.
c. Commercial and industrial loans to and lease financing receivables of non-U.S.
addresses (domicile) included in Memorandum item 2.b above............................... RCFD 8692 0 M.2.c.
3. Maturity and repricing data for loans and leases (excluding those in nonaccrual status):
a. Closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices (reported in Schedule RC-C, part I, item 1.c(2)(a), column B)
with a remaining maturity or repricing frequency of:(1)(2)
(1) Three months or less................................................................. RCON A564 354,289 M.3.a.(1)
(2) Over three months through 12 months.................................................. RCON A565 526,334 M.3.a.(2)
(3) Over one year through three years.................................................... RCON A566 181,930 M.3.a.(3)
(4) Over three years through five years.................................................. RCON A567 173,209 M.3.a.(4)
(5) Over five years through 15 years..................................................... RCON A568 266,945 M.3.a.(5)
(6) Over 15 years........................................................................ RCON A569 357,365 M.3.a.(6)
b. All loans and leases (reported in Schedule RC-C, part I, items 1 through 10, column A)
EXCLUDING closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices (reported in Schedule RC-C, part I, item 1.c.(2)(a), column B)
with a remaining maturity or repricing frequency of:(1)(3)
(1) Three months or less................................................................. RCFD A570 7,404,692 M.3.b.(1)
(2) Over three months through 12 months.................................................. RCFD A571 1,584,994 M.3.b.(2)
(3) Over one year through three years.................................................... RCFD A572 3,400,671 M.3.b.(3)
(4) Over three years through five years.................................................. RCFD A573 4,216,478 M.3.b.(4)
(5) Over five years through 15 years..................................................... RCFD A574 1,374,939 M.3.b.(5)
(6) Over 15 years........................................................................ RCFD A575 75,987 M.3.b.(6)
c. Loans and leases (reported in Schedule RC-C, part I, items 1 through 10, column A)
with a REMAINING MATURITY of one year or less............................................ RCFD A247 3,868,481 M.3.c.
d. Loans secured by nonfarm nonresidential properties in domestic offices (reported in
Schedule RC-C, part I, item 1.e, column B) with a REMAINING MATURITY of over five years.. RCON A577 411,999 M.3.d.
e. Commercial and industrial loans (reported in Schedule RC-C, part I, item 4, column A)
with a REMAINING MATURITY of over three years............................................ RCFD A578 1,202,360 M.3.e.
</TABLE>
- ------------
(1) Report fixed rate loans and leases by remaining maturity and floating rate
loans by repricing frequency.
(2) Sum of Memorandum items 3.a.(1) through 3.a.(6) plus total nonaccrual
closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices included in Schedule RC-N, Memorandum item 3.c.(2),
column C, must equal total closed-end loans secured by first liens on 1-4
family residential properties from Schedule RC-C, part I, item 1.c. (2)(a),
column B.
(3) Sum of Memorandum items 3.b.(1) through 3.b.(6), plus total nonaccrual loans
and leases from Schedule RC-N, sum of items 1 through 8, column C, minus
nonaccrual closed-end loans secured by first liens on 1-4 family
residential properties in domestic offices included in Schedule RC-N,
Memorandum item 3.c.(2), column C, must equal total loans and leases from
Schedule RC-C, part I, sum of items 1 through 10, column A, minus total
closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices from Schedule RC-C, part I, item 1.c.(2)(a), column B.
17
<PAGE> 20
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-8
City, State Zip: Columbus, OH 43287 Printed 06/02/1999 at 15:00
</TABLE>
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
Memoranda (continued)
<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4. Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RC-C, part I, items 4 and 9, column A,
page RC-6(1)............................................................................... RCFD 2746 120,531 M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, page RC-6).............. RCFD 5369 279,794 M.5.
6. Adjustable rate closed-end loans secured by first liens on 1 -4 family residential properties
in domestic offices (included in Schedule RC-C, part I, item 1.c.(2)(a), column B, page RC-6) RCON 5370 565,476 M.6.
</TABLE>
- ----------
(1) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, item 1, column A.
SCHEDULE RC-D TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in total
assets or with $2 billion or more in par/ notional amount of off-balance sheet
derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
<TABLE>
<CAPTION>
-----
C420 <--
-----------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. U.S. Treasury securities in domestic offices................................................. RCON 3531 0 1.
2. U.S. Government agency obligations in domestic offices (exclude mortgage- backed securities . RCON 3532 0 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices....... RCON 3533 0 3.
4. Mortgages-backed securities (MBS) in domestic offices:
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA...................... RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA
(include CMOs, REMICs, and stripped MBS).................................................. RCON 3535 0 4.b.
c. All other mortgage-backed securities...................................................... RCON 3536 0 4.c.
5. Other debt securities in domestic offices.................................................... RCON 3537 0 5.
6. -8. Not applicable.
9. Other trading assets in domestic offices..................................................... RCON 3541 6,466 9.
10. Trading assets in foreign offices............................................................ RCFN 3542 0 10.
11. Revaluation gains in interest rate, foreign exchange rate, and other commodity and equity
contracts:
a. In domestic offices....................................................................... RCON 3543 0 11.a.
b. In foreign offices........................................................................ RCFN 3543 0 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5)............ RCFD 3545 6,466 12.
-----------------------
LIABILITIES Bil Mil Thou
-----------------------
13. Liability for short positions................................................................ RCFD 3546 0 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity
contracts.................................................................................... RCFD 3547 0 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b)....... RCFD 3548 0 15.
</TABLE>
18
<PAGE> 21
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-9
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: 06560
-----
</TABLE>
SCHEDULE RC-E--DEPOSIT LIABILITIES
PART I DEPOSITS IN DOMESTIC OFFICES
<TABLE>
<CAPTION>
-----
C425 <-
------------------------------------------------------------
Nontransaction
Transaction Accounts Accounts
------------------------------------------------------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
------------------------------------------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations.............. 2201 3,276,618 2240 2,684,472 2346 14,745,256 1.
2. U.S. Government.......................................... 2202 2,327 2280 2,327 2520 0 2.
3. States and political subdivisions in the U.S.............. 2203 97,381 2290 94,375 2530 670,227 3.
4. Commercial banks in the U.S.............................. 2206 61,706 2310 61,706 2550 0 4.
5. Other depository institutions in the U.S................. 2207 0 2312 0 2349 0 5.
6. Banks in foreign countries............................... 2213 1,044 2320 1,044 2236 0 6.
7. Foreign governments and official institutions
(including foreign central banks)........................ 2216 0 2300 0 2377 0 7.
8. Certified and official checks............................ 2330 139,001 2330 139,001 8.
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a)............................................... 2215 3,578,077 2210 2,982,925 2385 15,415,483 9.
</TABLE>
Memoranda
<TABLE>
<CAPTION>
-----------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C):
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts.............................. 6835 1,022,910 M.1.a.
b. Total brokered deposits.......................................................................... 2365 174,410 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000................................................ 2343 0 M.1.c.(1)
(2) Issued EITHER in denominations of $100,000 OR in denominations greater than
$100,000 and participated out by the broker in shares of $100,000 or less.................... 2344 0 M.1.c.(2)
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining
maturity of one year or less (included in Memorandum item 1.c.(1) above)...................... A243 0 M.1.d.(1)
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining
maturity of one year or less (included in Memorandum item 1.b above).......................... A244 174,410 M.1.d.(2)
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S.
reported in item 3 above which are secured or collateralized as required under state law)
(TO BE COMPLETED FOR THE DECEMBER REPORT ONLY)................................................... 5590 N/A M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
must equal item 9, column C above):
a. Savings deposits:
(1) Money market deposits accounts (MMDAs)....................................................... 6810 4,032,933 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs)...................................................... 0352 3,748,469 M.2.a.(2)
b. Total time deposits of less than $100,000........................................................ 6648 5,709,983 M.2.b.
c. Total time deposits of $100,000 or more.......................................................... 2604 1,924,098 M.2.c.
3. All NOW accounts (included in column A above)....................................................... 2398 463,564 M.3.
4. Not applicable
</TABLE>
19
<PAGE> 22
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-10
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-E--CONTINUED
PART I. CONTINUED
Memoranda (continued)
<TABLE>
<CAPTION>
---------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Maturity and repricing data for time deposits of less than $100,000:
a. Time deposits of less than $100,000 with a remaining maturity or repricing
frequency of: (1) (2)
(1) Three months or less.................................................. A579 1,697,311 M.5.a.(1)
(2) Over three months through 12 months................................... A580 2,432,943 M.5.a.(2)
(3) Over one year through three years..................................... A581 1,181,238 M.5.a (3)
(4) Over three years...................................................... A582 398,491 M.5.a.(4)
b. Time deposits of less than $100,000 with a REMAINING MATURITY of one year
or less (included in Memorandum items 5.a.(1) through 5.a.(4) above)...... A241 4,130,248 M.5.b.
6. Maturity and repricing data for time deposits of $100,000 or more:
a. Time deposits of $100,000 or more with a remaining maturity or repricing
frequency of: (1) (3)
(1) Three months or less.................................................. A584 886,844 M.6.a.(1)
(2) Over three months through 12 months................................... A585 755,846 M.6.a.(2)
(3) Over one year through three years..................................... A586 244,002 M.6.a.(3)
(4) Over three years...................................................... A587 37,406 M.6.a.(4)
b. Time deposits of $100,000 or more with a REMAINING MATURITY of one year or
less (included in Memorandum items 6.a.(1) through 6.a.(4) above)......... A242 1,642,689 M.6.b.
</TABLE>
- ------------
(1) Report fixed rate time deposits by remaining maturity and floating rate time
deposits by repricing frequency.
(2) Sum of Memorandum items 5.a.(1) trough 5.a.(4) must equal Schedule RC-E,
Memorandum item 2.b above.
(3) Sum of Memorandum items 6.a.(1) through 6.a.(4) must equal Schedule RC-E,
Memorandum item 2.c above.
20
<PAGE> 23
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-11
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-E--CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFS)
<TABLE>
<CAPTION>
---------------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
Deposits of:
<S> <C> <C>
1. Individuals, partnerships, and corporations.................................................... 2621 72,870 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks)................................. 2623 0 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks, including their IBFs).... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks)................ 2650 0 4.
5. Certified and official checks.................................................................. 2330 0 5.
6. All other deposits............................................................................. 2668 136,986 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b)........................... 2200 209,856 7.
---------------------------
Memorandum
---------------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
1. Time deposits with a remaining maturity of one year of less (included in Part II, item 7 above) A245 209,856 M.1.
---------------------------
<CAPTION>
SCHEDULE RC-F--OTHER ASSETS
--------
C430 <-
---------------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Income earned, not collected on loans.......................................................... RCFD 2164 91,298 1.
2. Net deferred tax assets (1).................................................................... RCFD 2148 0 2.
3. Interest-only strips receivable (not in the form of a security) (2) on:
a. Mortgage loans.............................................................................. RCFD A519 0 3.a.
b. Other financial assets...................................................................... RCFD A520 0 3.b.
4. Other (itemize and describe amounts that exceed 25% of this item).............................. RCFD 2168 1,047,397 4.
---------- -----------------------------
a. TEXT 3549 BANK OWNED LIFE INSURANCE RCFD 3549 737,228 4.a.
---------------------------------------------------------------
b. TEXT 3550 RCFD 3550 4.b.
---------------------------------------------------------------
c. TEXT 3551 RCFD 3551 4.c.
--------------------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)............................. RCFD 2160 1,138,695 5.
---------------------------
---------------------------
Memorandum Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
1. Deferred tax assets disallowed for regulatory capital purposes................................. RCFD 5610 0 M.1.
---------------------------
<CAPTION>
SCHEDULE RC-G--OTHER LIABILITIES
--------
C435 <-
---------------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices(3).............................. RCON 3645 79,517 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable)................... RCFD 3646 263,114 1.b.
2. Net deferred tax liabilities(1)................................................................ RCFD 3049 65,178 2.
3. Minority interest in consolidated subsidiaries................................................. RCFD 3000 238 3.
4. Other (itemize and describe amounts that exceed 25% of this item) ............................. RCFD 2938 75,693 4.
---------- -----------------------------
a. TEXT 3552 DEFERRED INCOME - SALE/LEASEBACK AGREEMENT RCFD 3552 56,612 4.a.
---------------------------------------------------------------
b. TEXT 3553 RCFD 3553 4.b.
---------------------------------------------------------------
c. TEXT 3554 RCFD 3554 4.c.
--------------------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)............................. RCFD 2930 483,740 5.
---------------------------
</TABLE>
- ----------------
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) Report interest-only strips receivable in the form of a security as
available-for-sale securities in Schedule RC, item 2.b., or as trading
assets in Schedule RC, item 5, as appropriate.
(3) For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE> 24
<TABLE>
<S> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-12
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
<TABLE>
<CAPTION>
----
C440 <-
-------------------
Domestic Offices
-------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Customers' liability to this bank on accepting outstanding ............................... 2155 19,402 1.
2. Bank's liability on acceptances executed and outstanding ................................. 2920 19,402 2.
3. Federal funds sold and securities purchased under agreements to resell ................... 1350 22,730 3.
4. Federal funds purchased and securities sold under agreements to repurchase ............... 2800 2,571,413 4.
5. Other borrowed money...................................................................... 3190 3,105,675 5.
EITHER
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs .............. 2163 N/A 6.
OR
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs ................ 2941 296,684 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries,
and IBFs)................................................................................. 2192 28,412,848 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries,
and IBFs) ................................................................................ 3129 25,881,864 9.
-------------------
IN ITEMS 10-17, REPORT THE AMORTIZED (HISTORICAL) COST OF BOTH HELD-TO-MATURITY AND RCON Bil Mil Thou
AVAILABLE-FOR-SALE SECURITIES IN DOMESTIC OFFICES. -------------------
10. U.S. Treasury securities ................................................................ 1039 745,736 10.
11. U.S. Government agency obligations (exclude mortgage-backed securities) .................. 1041 1,441,258 11.
12. Securities issued by states and political subdivisions in the U.S. ....................... 1042 311,048 12.
13. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ...................................... 1043 1,579,543 13.a.(1)
(2) Other pass-through securities ..................................................... 1044 0 13.a.(2)
b. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS):
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ...................................... 1209 949,422 13.b.(1)
(2) All other mortgage-backed securities .............................................. 1280 40 13.b.(2)
14. Other domestic debt securities ........................................................... 1281 309,287 14.
15. Foreign debt securities .................................................................. 1282 3,499 15.
16. Equity securities:
a. Investments in mutual funds and other equity securities with readily
determinable fair values .............................................................. A510 0 16.a.
b. All other equity securities ........................................................... 1752 29,693 16.b
17. Total amortized (historical) cost of both held-to-maturity and available-for-sale
securities (sum of items 10 through 16) .................................................. 1374 5,369,526 17.
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
<CAPTION>
-------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EITHER
1. Net due from the IBF of the domestic offices of the reporting bank ....................... 3051 N/A M.1.
OR
2. Net due to the IBF of the domestic offices of the reporting bank ......................... 3059 N/A M.2.
</TABLE>
22
<PAGE> 25
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-13
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFS
To be completed only by banks with IBFs and other "Foreign" offices.
<TABLE>
<CAPTION>
-----
C445 <-
-------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12) ............... 2133 N/A 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I,
item 12, column A) .......................................................................... 2076 N/A 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4,
column A) ................................................................................... 2077 N/A 3.
4. Total IBF liabilities (component of Schedule RC, item 21) ................................... 2898 N/A 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E,
part II, items 2 and 3)...................................................................... 2379 N/A 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6) ... 2381 N/A 6.
</TABLE>
SCHEDULE RC-K--QUARTERLY AVERAGES (1)
<TABLE>
<CAPTION>
------
C455 <-
--------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Interest-bearing balances due from depository institutions .................................. RCFD 3381 5,288 1.
2. U.S. Treasury securities and U.S. Government agency obligations (2) (INCLUDING
MORTGAGE-BACKED SECURITIES ISSUED OR GUARANTEED BY FNMA, FHLMC, OR GNMA) .................... RCFD 3382 4,517,729 2.
3. Securities issued by states and political subdivisions in the U.S. (2) ...................... RCFD 3383 303,959 3.
4. a. Other debt securities(2) INCLUDING MORTGAGE-BACKED SECURITIES NOT ISSUED OR GUARANTEED
BY FNMA, FHLMC, OR GNMA).................................................................. RCFD 3647 329,948 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock) .... RCFD 3648 29,685 4.b.
5. Federal funds sold and securities purchased under agreements to resell....................... RCFD 3365 140,944 5.
6. Loans:
a. Loans in domestic offices:
(1) Total loans .......................................................................... RCON 3360 19,901,299 6.a.(1)
(2) Loans secured by real estate ......................................................... RCON 3385 6,400,932 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers .................. RCON 3386 112,593 6.a.(3)
(4) Commercial and industrial loans ...................................................... RCON 3387 5,902,927 6.a.(4)
(5) Loans to individuals for household, family, and other personal expenditures........... RCON 3388 5,435,137 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs ................ RCFN 3360 0 6.b.
7. Trading assets............................................................................... RCFD 3401 4,077 7.
8. Lease financing receivables (net of unearned income) ........................................ RCFD 3484 2,039,774 8.
9. Total assets (4) ............................................................................ RCFD 3368 28,400,654 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts,
and telephone and preauthorized transfer accounts) (exclude demand deposits) ................ RCON 3485 3,326,635 10.
11. Nontransaction accounts in domestic offices:
a. Money market deposit accounts (MMDAs) .................................................... RCON 3486 3,906,119 11.a.
b. Other savings deposits ................................................................... RCON 3487 3,810,725 11.b.
c. Time deposits of $100,000 or more ........................................................ RCON A514 1,732,571 11.c.
d. Time deposits of less than $100,000 ...................................................... RCON A529 6,047,825 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs .... RCFN 3404 288,894 12.
13. Federal funds purchased and securities sold under agreements to repurchase .................. RCFD 3353 2,854,771 13.
14. Other borrowed money (includes mortgage indebtedness and obligations under capitalized
leases) ..................................................................................... RCFD 3355 2,911,580 14.
</TABLE>
- ------------
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on historical
cost.
(4) The quarterly average for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
23
<PAGE> 26
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High Street Page RC-14
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
Schedule RC-L -- Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
<TABLE>
<CAPTION>
----
C460 <--
----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unused commitments:
a. Revolving, open-end lines secured by 1-4 family
residential properties, e.g., home equity lines......... 3814 2,369,803 1.a.
b. Credit card lines....................................... 3815 1,992,256 1.b.
c. Commercial real estate, construction, and land
development:
(1) Commitments to fund loans secured by real
estate............................................. 3816 258,186 1.c.(1)
(2) Commitments to fund loans not secured by
real estate........................................ 6550 17,192 1.c.(2)
d. Securities underwriting................................. 3817 0 1.d.
e. Other unused commitments................................ 3818 3,784,709 1.e.
2. Financial standby letters of credit and foreign office
guarantees................................................... 3819 703,893 2.
a. Amount of financial standby letters of credit
conveyed to others RCFD 3820 14,879... 2.a.
3. Performance standby letters of credit and
foreign office guarantees.................................... 3821 43,491 3.
a. Amount of performance standby letters
of credit conveyed to others RCF 3822 2,168... 3.a.
4. Commercial and similar letters of credit..................... 3411 129,429 4.
5. Participations in acceptances (as described in the
instructions) conveyed to others by the reporting bank....... 3428 0 5.
6. Participations in acceptances (as described in the
instructions) acquired by the reporting (nonaccepting) bank.. 3429 0 6.
7. Securities borrowed.......................................... 3432 0 7.
8. Securities lent (including customers' securities lent
where the customer is indemnified against loss by the
reporting bank).............................................. 3433 0 8.
9. Financial assets transferred with recourse that have
been treated as sold for Call Report purposes:
a. First lien 1-to-4 family residential mortgage
loans:
(1) Outstanding principal balance of mortgages
transferred as of the report date.................. A521 9,629 9.a.(1)
(2) Amount of recourse exposure on these
mortgages as of the report date.................... A522 9,629 9.a.(2)
b. Other financial assets (excluding small business
obligations reported in item 9.c):
(1) Outstanding principal balance of assets
transferred as of the report date.................. A523 0 9.b.(1)
(2) Amount of recourse exposure on these assets
as of the report date.............................. A524 0 9.b.(2)
c. Small business obligations transferred with
recourse under Section 208 of the Riegle Community
Development and Regulatory Improvement Act of 1994:
(1) Outstanding principal balance of small business
obligations transferred as of the report date...... A249 0 9.c.(1)
(2) Amount of retained recourse on these obligations
as of the report date.............................. A250 0 9.c.(2)
10. Notional amount of credit derivatives:
a. Credit derivatives on which the reporting bank is
the guarantor........................................... A534 0 10.a.
b. Credit derivatives on which the reporting bank is
the beneficiary......................................... A535 0 10.b.
11. Spot foreign exchange contracts.............................. 8765 920 11.
12. All other off-balance sheet liabilities (exclude
off-balance sheet derivatives) (itemize and describe
each component of this item over 25% of Schedule RC,
item 28, "Total equity capital")............................. 3430 0 12.
a. TEXT 3555 RCFD 3555 12.a.
b. TEXT 3556 RCFD 3556 12.b.
c. TEXT 3557 RCFD 3557 12.c.
d. TEXT 3558 RCFD 3558 12.d.
</TABLE>
24
<PAGE> 27
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-15
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.:|0|6|5|6|0|
-----------
</TABLE>
Schedule RC-L--Continued
<TABLE>
<CAPTION>
-----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives)
(itemize and describe each component of this item over 25% of Schedule RC,
item 28, "Total equity capital") 5591 0 13.
a. TEXT 5592 RCFD 5592 13.a.
b. TEXT 5593 RCFD 5593 13.b.
c. TEXT 5594 RCFD 5594 13.c.
d. TEXT 5595 RCFD 5595 13.d.
<CAPTION>
-----------------
C461 <-
- ---------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
--------------------------- Contracts Contracts Contracts Other Contracts
Off-balance Sheet Derivatives ----------------- ------------------ ------------------ -----------------
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
14. Gross amounts (e.g.,
notional amounts) (for
each column,sum of items
14.a through 14.e must
equal sum of items 15,
16.a, and 16.b:
a. Futures contracts......... 0 0 0 0 14.a.
RCFD 8693 RCFD 8694 RCFD 8695 RCFD 8696
b. Forward contracts 470,072 74,241 0 0 14.b.
RCFD 8697 RCFD 8698 RCFD 8699 RCFD 8700
c. Exchange-traded option
contracts:
(1) Written options....... 0 0 0 0 14.c.(1)
RCFD 8701 RCFD 8702 RCFD 8703 RCFD 8704
(2) Purchased options..... 0 0 0 0 14.c.(2)
RCFD 8705 RCFD 8706 RCFD 8707 RCFD 8708
d. Over-the-counter option
contracts:
(1) Written options....... 240,274 0 0 0 14.d.(1)
RCFD 8709 RCFD 8710 RCFD 8711 RCFD 8712
(2) Purchased options..... 1,314,774 0 0 0 14.d.(2)
RCFD 8713 RCFD 8714 RCFD 8715 RCFD 8716
e. Swaps..................... 5,743,342 34,650 0 0 14.e.
RCFD 3450 RCFD 3826 RCFD 8719 RCFD 8720
15. Total gross notional amount
of derivative contracts
held for trading............. 1,407,224 74,241 0 0 15.
RCFD A126 RCFD A127 RCFD 8723 RCFD 8724
16. Gross notional amount of
derivative contracts held for
purposes other than trading:
a. Contracts marked to market 1,294,572 0 0 0 16.a.
RCFD 8725 RCFD 8726 RCFD 8727 RCFD 8728
b. Contracts not marked to
market.................... 5,066,666 34,650 0 0 16.b.
RCFD 8729 RCFD 8730 RCFD 8731 RCFD 8732
c. Interest rate swaps where
the bank has agreed to pay
a fixed rate.............. 900,000 16.c.
RCFD A589
</TABLE>
25
<PAGE> 28
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-16
City, State, Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-L--CONTINUED
<TABLE>
<CAPTION>
------
C462 <--
----------------------------------------------------------------------------------------
Dollar Amounts in Thousands (Column A) (Column B) (Column C) (Column D)
- ------------------------------ Interest Rate Foreign Exchange Equity Derivative Commodity and
Off-balance Sheet Derivatives Contracts Contracts Contracts Other Contracts
-----------------------------------------------------------------------------------------
Position Indicators RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17. Gross fair values of
derivative contracts:
a. Contracts held for
trading:
(1) Gross positive
fair value............ 8733 47,278 8734 502 8735 0 8736 0 17.a.(1)
(2) Gross negative
fair value............ 8737 44,853 8738 482 8739 0 8740 0 17.a.(2)
b. Contracts held for
purposes other than
trading that are marked
to market:
(1) Gross positive
fair value............ 8741 9,329 8742 0 8743 0 8744 0 17.b.(1)
(2) Gross negative
fair value............ 8745 1,694 8746 0 8747 0 8748 0 17.b.(2)
c. Contracts held for
purposes other than
trading that are not
marked to market:
(1) Gross positive
fair value............ 8749 36,669 8750 0 8751 0 8752 0 17.c.(1)
(2) Gross negative
fair value............ 8753 7,615 8754 1,573 8755 0 8756 0 17.c.(2)
<CAPTION>
---------------------
Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1.-2. Not applicable
3. Unused commitments with an original maturity exceeding one year that are reported in
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments
that are fee paid or otherwise legally binding)................................................ 3833 3,047,868 M.3.
a. Participations in commitments with an original maturity
exceeding one year conveyed to others..............................RCFD 3834 450,473 M.3.a.
4. To be completed only by banks with $1 billion or more in total assets:
Standby letters of credit and foreign office guarantees (both financial and performance) issued
to non-U.S. addressees (domicile) included in Schedule RC-L, items 2 and 3, above.............. 3377 2,600 M.4.
5. Loans to individuals for household, family, and other personal expenditures that
have been securitized and sold (with servicing retained), amounts outstanding by type of loan:
a. Loans to purchase private passenger automobiles (TO BE COMPLETED FOR THE
SEPTEMBER REPORT ONLY)...................................................................... 2741 N/A M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY).................................. 2742 0 M.5.b.
c. All other consumer credit (including mobile home loans)(TO BE COMPLETED FOR THE
SEPTEMBER REPORT ONLY)...................................................................... 2743 N/A M.5.c.
</TABLE>
26
<PAGE> 29
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-17
City, State Zip: Columbus, OH 43287 Printed 06/07/1999 at 11:17
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-M--MEMORANDA
<TABLE>
<CAPTION>
--------
C465 <-
------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors,
principal shareholders, and their related interests......................................... 6164 332,133 1.a.
b. Number of executive officers, directors, and principal shareholders to whom to the amount of
all extensions of credit by the reporting bank (including extensions of credit to
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number
of total capital as defined for this purpose in agency -----------------------------
regulations................................................... RCFD 6165 16 1.b.
-----------------------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
and agencies of FOREIGN BANKS(1) (included in Schedule RC, item 3)............................. 3405 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract.................................................... 5500 378,969 4.a.
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer...................................................... 5501 2,777 4.b.(1)
(2) Serviced without recourse to servicer................................................... 5502 948,678 4.b.(2)
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract................................................ 5503 2,590 4.c.(1)
(2) Serviced under a special option contract................................................ 5504 4,722,912 4.c.(2)
d. Mortgages serviced under other servicing contracts.......................................... 5505 1,964,743 4.d.
5. To be completed only by banks with $1 billion or more in total assets:
Customers' liability to this bank on acceptance outstanding (sum of items 5.1 and 5.b must
equal Schedule RC, item 9):
a. U.S. addressees (domicile).................................................................. 2103 19,402 5.a.
b. Non-U.S. addressees (domicile).............................................................. 2104 0 5.b.
6. Intangible assets:
a. Mortgage servicing assets................................................................... 3164 80,602 6.a.
(1) Estimated fair value of mortgage servicing assets..........-----------------------------
RCFD A590 81,069 6.a.(1)
-----------------------------
b. Other identifiable intangible assets:
(1) PURCHASED CREDIT CARD RELATIONSHIPS AND NONMORTGAGE SERVICING ASSETS.................... B026 0 6.b.(1)
(2) All other identifiable intangible assets................................................ 5507 60,436 6.b.(2)
c. Goodwill.................................................................................... 3163 610,885 6.c.
d. Total (sum of items 6.a., 6.b.(1), 6.b.(2), and 6.c) (must equal Schedule RC, item 10)...... 2143 751,923 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been grandfathered or
are otherwise qualifying for regulatory capital purposes.................................... 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to
redeem the debt................................................................................ 3295 0 7.
</TABLE>
- ----------------
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this item.
27
<PAGE> 30
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-18
City, State Zip: Columbus, OH 43287 Printed 06/07/1999 at 11:17
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-M--Continued
<TABLE>
<CAPTION>
--------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8. a. Other real estate owned:
(1) Direct and indirect investments in real estate ventures........................ RCFD 5372 0 8.a.(1)
(2) All other real estate owned:
(a) Construction and land development in domestic offices...................... RCON 5508 1,285 8.a.(2)(a)
(b) Farmland in domestic offices............................................... RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices...................... RCON 5510 3,605 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices......... RCON 5511 0 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices...................... RCON 5512 12,963 8.a.(2)(e)
(f) In foreign offices......................................................... RCON 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.b.(1) and 8.a.(2)) (must equal Schedule RC, item 7)...... RCFD 2150 17,853 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures........................ RCFD 5374 7,229 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies.. RCFD 5375 467 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)...... RCFD 2130 7,696 8.b.(3)
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus".............................. RCFD 3778 0 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include
proprietary, private label, and third party products):
a. Money market funds................................................................. RCON 6441 177,777 10.a.
b. Equity securities funds............................................................ RCON 8427 35,251 10.b.
c. Debt securities funds.............................................................. RCON 8428 16,248 10.c.
d. Other mutual funds................................................................. RCON 8429 28,426 10.d.
e. Annuities.......................................................................... RCON 8430 65,257 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above)........................................................................ RCON 8784 173,769 10.f.
11. Net unamortized realized deferred gains (losses) on off-balance sheet derivative
contracts included in assets and liabilities reported in Schedule RC.................. RCFD A525 414 11.
12. Amount of assets netted against nondeposit liabilities and deposits in foreign offices
(other than insured branches in Puerto Rico and U.S. territories and possessions) on
the balance sheet (Schedule RC) in accordance with generally accepted accounting
principles (1)........................................................................ RCFD A526 0 12.
13. Outstanding principal balance of loans other than 1-4 family residential mortgage
loans that are serviced for others (to be completed if this balance is more than
$10 million and exceeds ten percent of total assets)................................. RCFD A591 0 13.
</TABLE>
<TABLE>
<CAPTION>
----------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Reciprocal holdings of banking organizations' capital instruments
(TO BE COMPLETED FOR THE DECEMBER REPORT ONLY).......................................... 3836 N/A M.1.
</TABLE>
- ----------------
(1) Exclude netted on-balance sheet amounts associated with off-balance sheet
derivative contract, deferred tax assets netted against deferred tax
liabilities, and assets netted in accounting for pensions.
28
<PAGE> 31
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-19
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
<TABLE>
<CAPTION>
The FFIEC regards the information reported in --------
all of Memorandum item 1, in items 1 through 10, C470 <-
column A, and in Memorandum items 2 through 4, ------------------------------------------------------------------------
column A, as confidential (Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
------------------------------------------------------------------------
Dollars Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile).................. 1245 116,489 1246 19,700 1247 40,050 1.a.
b. To non-U.S. addressees (domicile).............. 1248 0 1249 0 1250 0 1.b.
2. Loans to depository institutions and acceptances
of other banks
a. To U.S. banks and other U.S. depository
institutions................................... 5377 0 5378 0 5379 0 2.a.
b. To foreign banks............................... 5380 0 5381 0 5382 0 2.b.
3. Loans to finance agricultural production and
other loans to farmers............................ 1594 1,244 1597 456 1583 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile).................. 1251 37,835 1252 9,078 1253 33,552 4.a.
b. To non-U.S. addressees (domicile).............. 1254 0 1255 0 1256 0 4.b.
5. Loans to individuals for household, family, and
other personal expenditures:
a. Credit cards and related plans................. 5383 8,894 5384 3,137 5385 0 5.a.
b. Other (includes single payment, installment,
and all student loans)......................... 5386 93,198 5387 17,722 5388 458 5.b.
6. Loans to foreign governments and official
institutions...................................... 5389 0 5390 0 5391 0 6.
7. All other loans................................... 5459 0 5460 0 5461 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile).................. 1257 30,341 1258 3,997 1259 56 8.a.
b. Of non-U.S. addressees (domicile).............. 1271 0 1272 0 1791 0 8.b.
9. Debt securities and other assets (exclude other
real estate owned and other repossessed assets)... 3505 0 3506 0 3507 0 9.
------------------------------------------------------------------------
====================================================================================================================================
<CAPTION>
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 10 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
10. Loans and leases reported in items 1 RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
through 8 above which are wholly or partially -----------------------------------------------------------------------
guaranteed by the U.S. Government................ 5612 2,237 5613 3,107 5614 1,279 10.
a. Guaranteed portion of loans and leases
included in item 10 above..................... 5615 1,430 5616 2,286 5617 621 10.a.
-----------------------------------------------------------------------
</TABLE>
29
<PAGE> 32
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High Street Page RC-20
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-N--Continued
<TABLE>
<CAPTION>
----------------
C473 <-
- ---------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
Memoranda ---------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 8, above
(and not reported in Schedule RC-C, part I,
Memorandum item 2).................................. 1658 0 1659 0 1661 0 M.1.
2. Loans to finance commercial real estate,
construction, and land development activities
(NOT SECURED BY REAL ESTATE) included in
Schedule RC-N, items 4 and 7, above................. 6558 0 6559 0 6560 0 M.2
3. Loans secured by real estate in domestic RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
offices (included in Schedule RC-N, item 1,
above):
a. Construction and land development.............. 2759 10,320 2769 1,658 3492 7,540 M.3.a.
b. Secured by farmland............................ 3493 0 3494 0 3495 0 M.3.b.
c. Secured by 1-4 family residential
properties:
(1) Revolving, open-end loans
secured by 1-4 family residential
properties and extended under
lines of credit........................... 5398 11,265 5399 3,523 5400 0 M.3.c.(1)
(2) All other loans secured by 1-4
family residential properties............. 5401 70,791 5402 10,738 5403 18,377 M.3.c.(2)
d. Secured by multifamily (5 or more)
residential properties......................... 3499 898 3500 95 3501 0 M.3.d.
e. Secured by nonfarm residential
properties..................................... 3502 23,215 3503 3,686 3504 14,133 M.3.e.
<CAPTION>
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
--------------------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou
--------------------------------------
<S> <C> <C> <C> <C> <C>
4. Interest rate, foreign exchange rate,
and other commodity and equity contracts:
a. Book value of amounts carried as
assets......................................... 3522 0 3528 0 M.4.a.
b. Replacement cost of contracts with a
positive replacement cost...................... 3529 0 3530 0 M.4.b.
</TABLE>
<TABLE>
----
C477 <-
----
Person to whom questions about the Reports of Condition and Income should be
directed:
<S> <C>
BILL TELZEROW, MANAGER OF FINANCIAL REPORTING (614) 480-4563
- --------------------------------------------------- --------------------------------------------------------
Name and Title (TEXT 8901) Telephone: Area code/phone number/extension (TEXT 8902)
(614) 480-5284
-------------------------------------------------------
FAX: Area code/phone number (TEXT 9116)
</TABLE>
30
<PAGE> 33
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-21
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-0--OTHER DATA FOR DEPOSIT INSURANCE AND FICO ASSESSMENTS
<TABLE>
<CAPTION>
C475 <--
--------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unposted debits (see instructions):
a. Actual amount of all unposted debits........................................................... 0030 N/A 1.a.
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits........................................ 0031 0 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits (1).......................... 0032 0 1.b.(2)
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits.......................................................... 3510 6,629 2.a.
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits....................................... 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and saving deposits(1)........................... 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total
deposits in domestic offices)..................................................................... 3520 0 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in Puerto
Rico and U.S. territories and possessions (not included in total deposits):
a. Demand deposits of consolidated subsidiaries................................................... 2211 0 4.a.
b. Time and savings deposits (1) of consolidated subsidiaries..................................... 2351 0 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries........................... 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions
a. Demand deposits in insured branches (included in Schedule RC-E, Part II)....................... 2229 0 5.a.
b. Time and savings deposits (1) in insured branches (included in Schedule RC-E, Part II)......... 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches (included in
Schedule RC-G, item 1.b)....................................................................... 5515 0 5.c.
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on
behalf of its respondent depository institutions that are also reflected as deposit liabilities
of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, Item 4 or 5,
column B)...................................................................................... 2314 0 6.a.
b. Amount reflected in time and savings deposits (1) (included in Schedule RC-E, Part I,
item 4 or 5, column A or C, but not column B).................................................. 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1), (2)
a. Unamortized premiums........................................................................... 5516 36 7.a.
b. Unamortized discounts.......................................................................... 5517 0 7.b.
8. TO BE COMPLETED BY BANKS WITH "OAKAR DEPOSITS."
a. Deposits purchased or acquired from other FDIC-insured institutions during the quarter
(exclude deposits purchased or acquired from foreign offices other than insured branches
in Puerto Rico and U.S. territories and possessions):
(1) Total deposits purchased or acquired from other FDIC-insured institutions during
the quarter................................................................................ A531 0 8.a.(1)
(2) Amount of purchased or acquired deposits reported in item 8.a.(1) above attributable
to a secondary fund (i.e., BIF members report deposits attributable to SAIF; SAIF
members report deposits attributable to BIF)............................................... A532 0 8.a.(2)
b. Total deposits sold or transferred to other FDIC-insured institutions during the quarter
(exclude sales or transfers by the reporting bank of deposits in foreign offices other than
insured branches in Puerto Rico and U.S. territories and possessions).......................... A533 0 8.b.
</TABLE>
- -----------
(1) For FDIC insurance and FICO assessment purposes, "time and savings deposits"
consists of nontransaction accounts and all transaction accounts other than
demand deposits.
(2) Exclude core deposit intangibles.
31
<PAGE> 34
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High Street Page RC-22
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-O--CONTINUED
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9. Deposits in lifeline accounts.......................................... 5596 9.
10. Benefit-responsive "Depository Institution Investment
Contracts" (included in total deposits in domestic offices)............ 8432 0 10.
11. Adjustments to demand deposits in domestic offices and in
insured branches in Puerto Rico and U.S. territories and
possessions reported in Schedule RC-E for certain reciprocal
demand balances:
a. Amount by which demand deposits would be reduced if the
reporting bank's reciprocal demand balances with the
domestic offices of U.S. banks and savings associations
and insured branches in Puerto Rico and U.S. territories
and possessions that were reported on a gross basis in
Schedule RC-E had been reported on a net basis.................... 8785 0 11.a.
b. Amount by which demand deposits would be increased if the
reporting bank's reciprocal demand balances with foreign
banks and foreign offices of other U.S. banks (other than insured
branches in Puerto Rico and U.S. territories and possessions) that
were reported on a net basis in Schedule RC-E had been reported on a
gross basis....................................................... A181 0 11.b.
c. Amount by which demand deposits would be reduced if cash
items in process of collection were included in the
calculation of the reporting bank's net reciprocal demand
balances with the domestic offices of U.S. banks and
savings associations and insured branches in Puerto Rico
and U.S. territories and possessions in Schedule RC-E............. A182 0 11.c.
12. Amount of assets netted against deposit liabilities in domestic
offices and in insured branches in Puerto Rico and U.S.
territories and possessions on the balance sheet (Schedule RC)
in accordance with generally accepted accounting principles
(exclude amounts related to reciprocal demand balances):
a. Amount of assets netted against demand deposits................... A527 0 12.a.
b. Amount of assets netted against time and savings deposits......... A528 0 12.b.
</TABLE>
Memoranda (TO BE COMPLETED EACH QUARTER EXCEPT AS NOTED)
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total deposits in domestic offices of the bank
(sum of Memorandum items 1.a.(1) and 1.b.(1) must equal
Schedule RC, item 13.a):
a. Deposit accounts of $100,000 or less:
(1) Amount of deposit accounts of $100,000 or
less........................................................ 2702 13,014,275 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or
less (TO BE COMPLETED FOR THE JUNE REPORT Number
ONLY)..................................... RCON 3779 N/A M.1.a.(2)
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than
$100,000.................................................... 2710 5,979,285 M.1.b.(1)
(2) Number of deposit accounts of more than Number
$100,000.................................. RCON 2772 21,637 M.1.b.(2)
2. Estimated amount of uninsured deposits in domestic offices
of the bank:
a. an estimate of your bank's uninsured deposits can be
determined by multiplying the number of deposit accounts
of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the
amount of deposit accounts of more than $100,000 reported
in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your
bank has a method or procedure for determining a better
estimate of uninsured deposits than the estimate described YES NO
above............................................................ 6861 X M.2.a.
b. If the box marked YES has been checked, report the estimate
of uninsured deposits determined by using your bank's method RCON Bil Mil Thou
or procedure..................................................... 5597 N/A M.2.b.
3. Has the reporting institution been consolidated with a parent bank
or savings association in that parent bank's or parent savings
association's Call Report or Thrift Financial Report?
If so, report the legal title and FDIC Certificate Number of the
parent bank or parent savings association:
FDIC Cert No.
TEXT A545 N/A RCON A545 N/A M.3.
</TABLE>
32
<PAGE> 35
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-23
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-R--REGULATORY CAPITAL
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1998,
must complete items 2 through 9 and Memoranda items 1 and 2. BANKS WITH ASSETS
OF LESS THAN $1 BILLION MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR SCHEDULE RC-R
IN ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM 1 BELOW.
<TABLE>
<CAPTION>
<S><C>
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED. TO BE --------
COMPLETED ONLY BY BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION. Indicate in the C480 <-
appropriate box at the right whether the bank has total capital greater than or ------------------------
equal to eight percent of adjusted total assets.................................. YES NO
-----------------------------------------
RCFD 6056 1.
-----------------------------------------
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government
agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for
loan and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked
NO has been checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than
eight percent or that the bank is not in compliance with the risk-based capital guidelines.
</TABLE>
- ----------------------------------------------------------------
NOTE: ALL BANKS ARE REQUIRED TO COMPLETE ITEMS 2 AND 3 BELOW.
SEE OPTIONAL WORKSHEET FOR ITEMS 3.a through 3.f.
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------
Dollars Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Portion of qualifying limited-life capital instruments (original weighted
average maturity of at least five years) that is includible in Tier 2 capital:
a. Subordinated debt(1) and intermediate term preferred stock.................................. A515 690,000 2.a.
b. Other limited-life capital instruments...................................................... A516 0 2.b.
3. Amounts used in calculating regulatory capital ratios (report amounts determined by the bank
for its own internal regulatory capital analyses consistent with applicable capital standards):
a. (1) Tier 1 capital.......................................................................... 8274 1,573,668 3.a.(1)
(2) Tier 2 capital.......................................................................... 8275 980,975 3.a.(2)
(3) Tier 3 capital.......................................................................... 1395 0 3.a.(3)
b. Total risk-based capital.................................................................... 3792 2,554,644 3.b.
c. Excess allowances for loan and lease losses (amount that exceeds 1.25% of gross
risk-weighted assets)....................................................................... A222 0 3.c.
d. (1) Net risk-weighted assets (gross risk-weighted assets, INCLUDING MARKET RISK EQUIVALENT
ASSETS, less excess allowance reported in item 3.c above and all other deductions)...... A223 24,232,961 3.d.(1)
(2) Market risk equivalent assets (INCLUDED IN ITEM 3.d.(1) above).......................... 1651 0 3.d.(2)
e. Maximum contractual dollar amount of recourse exposure in low level
recourse transactions (to be completed only if the bank uses the "direct
reduction method" to report these transactions in Schedule RC-R)............................ 1727 0 3.e.
f. "Average total assets" (quarterly average reported in Schedule RC-K, item 9, less all
assets deducted from Tier 1 capital)(2).................................................... A224 27,725,154 3.f.
----------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------
(Column A) (Column B)
ITEMS 4-9 AND MEMORANDA ITEMS 1 AND 2 ARE TO BE COMPLETED Assets Credit Equiv-
BY BANKS THAT ANSWERED NO TO ITEM 1 ABOVE AND Recorded alent Amount
BY BANKS WITH TOTAL ASSETS OF $1 BILLION OR MORE. on the of Off-Balance
Balance Sheet Sheet Items(3)
---------------------------------------------------
<S> <C> <C>
4. Assets and credit equivalent amounts of off-balance sheet items RCFD Bil Mil Thou RCFD Bil Mil Thou
assigned to the Zero percent risk category: ---------------------------------------------------
a. Assets recorded on the balance sheet............................ 5163 1,424,444 4.a.
b. Credit equivalent amount of off-balance sheet items............. 3796 0 4.b.
---------------------------------------------------
</TABLE>
- ----------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
33
<PAGE> 36
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-24
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No. 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-R--CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items(1)
--------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items assigned
to the 20 percent risk category:
a. Assets recorded on the balance sheet................................. 5165 4,600,721 5.a.
b. Credit equivalent amount of off-balance sheet items.................. 3801 56,857 5.b.
6. Assets and credit equivalent amounts of the off-balance sheet items
assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet................................. 3802 2,085,615 6.a.
b. Credit equivalent amount of off-balance sheet items.................. 3803 74,592 6..b.
7. Assets and credit equivalent amounts of off-balance sheet items
assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet................................ 3804 19,940,942 7.a.
b. Credit equivalent amount of off-balance sheet time.................. 3805 2,280,401 7.b.
8. On-balance sheet asset values excluded from and deducted in the
calculation of the risk-based capital ratio(2)........................ 3806 652,102 8.
9. Total assets recorded on the balance sheet (sum of items 4.a.,5.a., 6.a.
7.a. and 8, column A) (must equal Schedule RC, item 12 plus items 4.b and
4.c.)..................................................................... 3807 28,703,824 9.
Memoranda
----------------------------- ----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by the risk-
based capital standards....................................................................... 8764 78,744 M.1.
With a remaining maturity of
-------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
One year or less Over one year Over five years
through five years
-------------------------------------------------------------------------------------
2. Notional principal amounts of RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
off-balance sheet derivative ----------------------- ------------------------- -----------------------
contracts(3):
<S> <C> <C> <C> <C> <C> <C> <C>
a. Interest rate contracts...... 3809 1,025,666 8766 3,811,445 8767 1,436,280 M.2.a
b. Foreign exchange contracts... 3812 74,241 8769 34,650 8770 0 M.2.b.
c. Gold contracts............... 8771 0 8772 0 8773 0 M.2.c.
d. Other precious metals
contracts.................... 8774 0 8775 0 8776 0 M.2.d.
e. Other commodity contracts.... 8777 0 8778 0 8779 0 M.2.e.
f. Equity derivative contracts.. A000 0 A001 0 A002 0 M.2.f.
</TABLE>
- --------------------------
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale debt securities in item 8 and report the amortized cost
of these debt securities in items 4 through 7 above. Item 8 also includes
on-balance sheet asset values (or portions thereof) of off-balance sheet
interest rate, foreign exchange rate, and commodity contracts and those
contracts(e.g., futures contracts) not subject to risk-based capital.
Exclude from item 8 margin accounts and accrued receivables not included in
the calculation of credit equivalent amounts of off-balance sheet
derivatives as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or
less and all futures contracts.
34
<PAGE> 37
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-25
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on March 31, 1999
THE HUNTINGTON NATIONAL BANK COLUMBUS, OHIO
- ---------------------------- -------- -----------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief narrative
statement on the amounts reported in the Reports of Condition and Income. This
optional statement will be made available to the public, along with the publicly
available data in the Reports of Condition and Income, in response to any
request for individual bank report data. However, the information reported in
column A and in all of Memorandum item 1 of Schedule RC-N is regarded as
confidential and will not be released to the public. BANKS CHOOSING TO SUBMIT
THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES NOT CONTAIN THE
NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE
AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER
INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not to make a
statement may check the "No comment" box below and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in
this space such phrases as "No statement," "Not applicable," "N/A," "No
comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, indentation, and
standard spacing between words and sentences. If any submission should exceed
750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who thereby
attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release to
the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- --------------------------------------------------------------------------------
No comment /X/ (RCON 6979) C471 C472 <-
---------------
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
?
- -------------------------------------- -----------------
Signature of Executive Officer of Bank Date of Signature
35
<PAGE> 38
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999
Address: 41 S. High St. FFIEC 031
City, State Zip: Columbus, OH 43287
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
<TABLE>
<CAPTION>
<S><C>
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- ----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF BANK OMB No. For OCC: 1557-0081
OMB No. For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 3/31/2001
SPECIAL REPORT
(Dollar Amounts in Thousands)
-------------------------------------------------------------------------------
CLOSE OF BUSINESS FDIC Certificate Number
DATE C-700 <---
03/31/1999 |0|6|5|6|0|
- ----------------------------------------------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
- ----------------------------------------------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242 but does not constitute a part of the
Report of Condition. With each Report of Condition, these Laws require all banks to furnish a report of all
loans or other extensions of credit to their executive officers made SINCE THE DATE OF THE PREVIOUS REPORT
OF CONDITION. Data regarding individual loans or other extensions of credit are not required. If no such
loans or other extensions of credit were made during the period, insert "none" against subitem (a). (Exclude
the first $15,000 of indebtedness of each executive officer under bank credit card plan.) SEE SECTIONS
215.2 AND 215.3 OF TITLE 12 OF THE CODE OF FEDERAL REGULATIONS (FEDERAL RESERVE BOARD REGULATION O) FOR THE
DEFINITIONS OF "EXECUTIVE OFFICER" AND "EXTENSION OF CREDIT," RESPECTIVELY. EXCLUDE LOANS AND OTHER EXTENSIONS
OF CREDIT TO DIRECTORS AND PRINICIPAL SHAREHOLDERS WHO ARE NOT EXECUTIVE OFFICERS.
- ----------------------------------------------------------------------------------------------------------------------
a. Number of loans made to executive officers since the previous Call Report date ............... RCFD 3561 1 a.
b. Total dollar amount of above loans (in thousands of dollars) ................................. RCFD 3562 26 b.
c. Range of interest charged on above loans
(example: 9 3/4% = 9.75) .............................................. RCFD 7701 6.77 % to RCFD 7702 6.77 % c.
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT DATE (Month, Day, Year)
- ----------------------------------------------------------------------------------------------------------------------
FDIC 8040/53 (3-98)
</TABLE>
36
<PAGE> 1
EXHIBIT 25.2
United States
Securities and Exchange Commission
Washington, D.C. 20549
----------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
-----------------------------------
THE HUNTINGTON NATIONAL BANK
(Exact name of trustee as specified in its charter)
- ------------------------------------ 31-0966785
(Jurisdiction of incorporation or organization (IRS Employer
if not a U.S. national bank) Identification Number)
41 S. High Street
Columbus, Ohio 43215
(Address of principal executive offices) (Zip Code)
Richard A. Cheap, General Counsel and Secretary
The Huntington National Bank
41 S. High Street - HC3412
Columbus, Ohio 43215
Tel: (614) 480-4647
(Name, address and telephone number of agent for service)
---------------------------------------------------
VENTURE HOLDINGS TRUST
(Exact name of obligor as specified in its charter)
Michigan 38-6530870
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
33662 James J. Pompo Drive
Fraser, Michigan 48026 48026
(Address of principal executive offices) (Zip Code)
---------------------------------------------------------------
VENTURE HOLDINGS TRUST 12% SENIOR SUBORDINATED NOTES DUE 2009
Debt Securities
(Title of the indenture securities)
---------------------------------------------------------------
1
<PAGE> 2
GENERAL
Pursuant to General Instruction B of the Form T-1, the applicant is providing
responses to only Items 1, 2, and 16 of the Form T-1 since the obligor is not in
default.
Item 1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Office of the Comptroller of the Currency Federal Deposit Insurance
Central District Corporation
One Financial Plaza Chicago Region
440 South LaSalle, Suite 2700 30 South Wacker Drive
Chicago, Illinois 60605 Chicago, Illinois 60505
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Federal Reserve Bank of Cleveland - District No. 4
1455 East Sixth Street
Cleveland, Ohio 44115
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
2
<PAGE> 3
16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect (see
Item 16, Exhibit 1 to Form T-1 filed in connection with Registration Statement
No. 33-80090 which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence Business
(see Item 16, Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-80090, which is incorporated by reference).
3. A copy of the authorization of the Trustee to exercise corporate trust
powers (see Item 16, Exhibit 3 to Form T-1 filed in connection with Registration
Statement No. 33-80090, which is incorporated by reference).
4. A copy of the existing By Laws of the Trustee (see Item 16, Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-80090, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321 (b) of the Act (see Item
16, Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-80090, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published pursuant
to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Huntington National Bank, a national association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Columbus and State of Ohio, on the 25th day of
June, 1999.
THE HUNTINGTON NATIONAL BANK
----------------------------
(Trustee)
By: /s/ Candada J. Moore
---------------------------------
Candada J. Moore, Vice President
(Name and Title)
3
<PAGE> 4
Exhibit 7 to Form T-1
<TABLE>
<S><C>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
[LOGO]
|1|
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES -- FFIEC 031
REPORT AT THE CLOSE OF BUSINESS MARCH 31, 1999 (19990331)
----------
(RCRI 9999)
This report is required by law: 12 U.S.C. ss.324 (State This report form is to be filed by banks with branches and
member banks); 12 U.S.C. ss.1817 (State nonmember banks); consolidated subsidiaries in U.S. territories and possessions,
and 12 U.S.C. ss.161 (National banks). Edge or Agreement subsidiaries, foreign branches, consolidated
foreign subsidiaries, or International Banking Facilities.
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by The Reports of Condition and Income are to be prepared in
an authorized officer and the Report of Condition must be accordance with Federal regulatory authority instructions.
attested to by not less than two directors (trustees) for
State nonmember banks and three directors for State member We, the undersigned directors (trustees), attest to the
and National banks. correctness of the Report of Condition (including the
supporting schedules) for this report date and declare that it
I, John VanFleet, SVP and Controller has been examined by us and to the best of our knowledge and
--------------------------------------------------------- belief has been prepared in conformance with the instructions
Name and Title of Officer Authorized to Sign Report issued by the appropriate Federal regulatory authority and is
true and correct.
of the named bank do hereby declare that the Reports of
Condition and Income (including the supporting schedules)
for this report date have been prepared in conformance with
the instructions issued by the appropriate Federal
regulatory authority and are true to the best of my
knowledge and belief. -----------------------------------------------------------
Director (Trustee)
John D. VanFleet
- ----------------------------------------------------------- -----------------------------------------------------------
Signature of Officer Authorized to Sign Report Director (Trustee)
- ----------------------------------------------------------- -----------------------------------------------------------
Date of Signature Director (Trustee)
April 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
SUBMISSION OF REPORTS
Each bank must prepare its Reports of Condition and Income For electronic filing assistance, contact EDS Call Report
either: Services 2150 N. Prospect Ave., Milwaukee, WI 53202, telephone
(800) 255-1571.
(a) in electronic form and then file the computer data file
directly with the banking agencies' collection agent, To fulfill the signature and attestation requirement for the
Electronic Data Systems Corporation (EDS), by modem or Reports of Condition and Income for this report date, attach
on computer diskette; or this signature page (or a photocopy or a computer-generated
version of this page) to the hard-copy record of the completed
(b) in hard-copy (paper) form and arrange for another party report that the bank places in its files.
to convert the paper report to electronic form. That
party (if other than EDS) must transmit the bank's
computer data file to EDS.
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number | | | | | | (RCRI 9050) Huntington National Bank
-----------------------------------------------------------
Legal Title of Bank (Text 9010)
Columbus
-----------------------------------------------------------
City (TEXT 9130)
OH 43215
-----------------------------------------------------------
State Abbrev. (TEXT 9200) ZIP Code (TEXT 9220)
Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-1
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1999-MARCH 31, 1999
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
SCHEDULE RI--INCOME STATEMENT
<TABLE>
<CAPTION>
----
I480 <-
------------
Year-to-date
----------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate................................................. 4011 128,762 1.a.(1)(a)
(b) Loans to depository institutions............................................. 4019 493 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers.......... 4024 2,338 1.a.(1)(c)
(d) Commercial and industrial loans.............................................. 4012 115,073 1.a.(1)(d)
(e) Acceptances of other banks................................................... 4026 17 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans.......................................... 4054 16,393 1.a.(1)(f)(1)
(2) Other................................................................... 4055 109,130 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions....................... 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political
subdivisions in the U.S.:
(1) Taxable obligations..................................................... 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations.................................................. 4504 1,334 1.a.(1)(h)(2)
(i) All other loans in domestic offices.......................................... 4058 56 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 4059 0 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases.................................................................... 4505 42,274 1.b.(1)
(2) Tax-exempt leases................................................................. 4307 0 1.b.(2)
c. Interest income on balances due from depository institutions: (1)
(1) In domestic offices............................................................... 4105 20 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 4106 68 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations (INCLUDING
MORTGAGE-BACKED SECURITIES ISSUED OR GUARANTEED BY FNMA, FHLMC, OR GNMA).......... 4027 67,561 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities........................................................... 4506 1,195 1.d.(2)(a)
(b) Tax-exempt securities........................................................ 4507 3,373 1.d.(2)(b)
(3) Other domestic debt securities (INCLUDING MORTGAGE-BACKED SECURITIES NOT ISSUED OR
GUARANTEED BY FNMA, FHLMC, OR GNMA)............................................... 3657 5,159 1.d.(3)
(4) Foreign debt securities........................................................... 3658 61 1.d.(4)
(5) Equity securities (including investments in mutual funds)......................... 3659 453 1.d.(5)
e. Interest income from trading assets.................................................... 4069 32 1.e
</TABLE>
- -----------------
(1) Includes interest income on time certificates of deposit not held for
trading.
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-2
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
-----------------
Dollar Amounts in Thousands Year-to-date
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest income (continued) RIAD Bil Mil Thou
f. Interest income on federal funds sold and securities purchased under
agreements to resell ................................................ 4020 548 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ 4107 494,340 1.g.
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) .............. 4508 5,911 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) ................... 4509 18,802 2.a.(1)(b)(1)
(2) Other savings deposits .................................. 4511 28,409 2.a.(1)(b)(2)
(3) Time deposits of $100,000 or more ....................... A517 22,809 2.a.(1)(b)(3)
(4) Time deposits of less than $100,000 ..................... A518 78,518 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs .......................................... 4172 3,395 2.a.(2)
b. Expense of federal funds purchased and securities sold under
agreements to repurchase ............................................ 4180 27,577 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and other borrowed money ............................... 4185 37,057 2.c.
d. Not applicable
e. Interest on subordinated notes and debentures ....................... 4200 11,084 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... 4073 233,562 2.f.
3. Net interest income (item 1.g minus 2.f) ............................... RIAD 4074 260,778 3.
4. Provisions:
a. Provision for credit losses ......................................... RIAD 4230 25,305 4.a.
b. Provision for allocated transfer risk ............................... RIAD 4243 0 4.b.
5. Noninterest income:
a. Income from fiduciary activities .................................... 4070 13,433 5.a.
b. Service charges on deposit accounts in domestic offices ............. 4080 37,035 5.b.
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) .............................................. A220 1,712 5.c.
d.-e. Not applicable
f. Other noninterest income:
(1) Other fee income ................................................ 5407 40,169 5.f.(1)
(2) All other noninterest income*.................................... 5408 12,878 5.f.(2)
g. Total noninterest income (sum of item 5.a through 5.f) .............. RIAD 4079 105,227 5.g.
6. a. Realized gains (losses) on held-to-maturity securities .............. RIAD 3521 0 6.a.
b. Realized gains (losses) on available-for-sale securities ............ RIAD 3196 2,330 6.b.
7. Noninterest expense:
a. Salaries and employee benefits ...................................... 4135 96,386 7.a.
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest) .... 4217 29,896 7.b.
c. Other noninterest expense* .......................................... 4092 72,577 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) ............ RIAD 4093 198,859 7.d.
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b,
and 7.d)................................................................ RIAD 4301 144,171 8.
9. Applicable income taxes (on item 8) .................................... RIAD 4302 47,046 9.
10. Income (loss) before extraordinary items and other adjustments (item 8
minus 9)................................................................ RIAD 4300 97,125 10.
11. Extraordinary items and other adjustments, net of income taxes* ........ RIAD 4320 0 11.
12. Net income (loss) (sum of items 10 and 11) ............................. RIAD 4340 97,125 12.
</TABLE>
- ------------
*Describe on Schedule RI-E--Explanations.
4
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-3
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
-----
I481 <-
----------------
Year-to-date
-----------------
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after
August 7, 1986, that is not deductible for federal income tax purposes............................ 4513 850 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
(included in Schedule RI, item 8)................................................................. 8431 6,747 M.2.
3.-4. Not applicable
5. Number of full-time equivalent employees at end of current period (round to Number
nearest whole number)............................................................................. 4150 9,603 M.5.
6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push down RIAD CC YY MM DD
accounting this calendar year, report the date of the bank's acquisition (1) ..............9106 00 00 00 00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c): Bil Mil Thou
a. Interest rate exposures..................................................................... 8757 1,366 M.8.a.
b. Foreign exchange exposures.................................................................. 8758 346 M.8.b.
c. Equity security and index exposures......................................................... 8759 0 M.8.c.
d. Commodity and other exposures............................................................... 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income.................................................. 8761 2,878 M.9.a.
b. Net (increase) decrease to interest expense................................................. 8762 3,736 M.9.b.
c. Other (noninterest) allocations............................................................. 8763 1,105 M.9.c.
10. Credit losses on off-balance sheet derivatives (see instructions)................................ A251 0 M.10.
11. Does the reporting bank have a Subchapter S election in effect for federal income tax YES NO
purposes for the current tax year?............................................................... A530 X M.11.
12. Deferred portion of total applicable income taxes included in Schedule RI, Bil Mil Thou
items 9 and 11 (to be reported with the December Report of Income)............................... 4772 N/A M.12.
</TABLE>
- ------------
(1) For example, a bank acquired on June 1, 1997, would report 19970601.
5
<PAGE> 8
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High Street Page RI-4
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-A -- CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>
-----
I483 <-
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total equity capital originally reported in the
December 31, 1998, Reports of Condition and Income................ 3215 2,208,624 1.
2. Equity capital adjustments from amended Reports of
Income, net*...................................................... 3216 0 2.
3. Amended balance end of previous calendar year
(sum of items 1 and 2)............................................ 3217 2,208,624 3.
4. Net income (loss) (must equal Schedule RI, item 12)............... 4340 97,125 4.
5. Sale, conversion, acquisition, or retirement of
capital stock, net................................................ 4346 0 5.
6. Changes incident to business combinations, net.................... 4356 18,455 6.
7. LESS: Cash dividends declared on preferred stock................. 4470 0 7.
8. LESS: Cash dividends declared on common stock.................... 4460 47,284 8.
9. Cumulative effect of changes in accounting principles
from prior years* (see instructions for this schedule)............ 4411 0 9.
10. Corrections of material accounting errors from prior
years* (see instructions for this schedule)....................... 4412 0 10.
11. a. Change in net unrealized holding gains (losses) on
available-for-sale securities................................ 8433 (42,620) 11.a.
b. CHANGE IN ACCUMULATED NET GAINS (LOSSES) ON CASH
FLOW HEDGES.................................................. 4574 0 11.b.
12. Foreign currency translation adjustments.......................... 4414 0 12.
13. Other transactions with parent holding company* (not
included in items 5, 7, or 8 above)............................... 4415 0 13.
14. Total equity capital end of current period (sum of
items 3 through 13) (must equal Schedule RC, item 28)............. 3210 2,234,300 14.
</TABLE>
*Describe on Schedule RI-E--Explanations.
SCHEDULE RI-B--CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES AND CHANGES IN
ALLOWANCE FOR CREDIT LOSSES
PART I. Charge-Offs and Recoveries on Loans and Leases
PART I Excludes Charge-Offs and Recoveries through the Allocated Transfer Risk
Reserve.
<TABLE>
<CAPTION>
-----
I486 <-
--------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
---------------------- -------------------
Calendar year-to-date
--------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile)............................... 4651 1,775 4661 756 1.a.
b. To non-U.S. addressees (domicile)........................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of other banks:
a. To U.S. banks and other U.S. depository institutions........ 4653 0 4663 0 2.a.
b. To foreign banks............................................ 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to
farmers.......................................................... 4655 7 4665 1 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)............................... 4645 5,022 4617 759 4.a.
b. To non-U.S. addressees (domicile)........................... 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and other personal
expenditures:
a. Credit cards and related plans.............................. 4656 6,415 4666 1,109 5.a.
b. Other (includes single payment, installment, and all
student loans).............................................. 4657 16,560 4667 4,364 5.b.
6. Loans to foreign governments and official institutions........... 4643 0 4627 0 6.
7. All other loans.................................................. 4644 0 4628 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile)............................... 4658 2,752 4668 355 8.a.
b. Of non-U.S. addressees (domicile)........................... 4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8)................................. 4635 32,531 4605 7,344 9.
</TABLE>
6
<PAGE> 9
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High Street Page RI-5
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-B--CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Charge-offs Recoveries
----------------------------------------
Memoranda Calendar year-to-date
----------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1-3. Not applicable
4. Loans to finance commercial real estate, construction, and land
development activities (NOT SECURED BY REAL ESTATE) included in
Schedule RI-B, part I, items 4 and 7, above................................ 5409 0 5410 0 M.4.
5. Loans secured by real estate in domestic offices (included in
Schedule RI-B, part I, item 1, above):
a. Construction and land development.................................. 3582 119 3583 0 M.5.a.
b. Secured by farmland..................................................... 3584 0 3585 0 M.5.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit....................... 5411 821 5412 96 M.5.c.(1)
(2) All other loans secured by 1-4 family residential properties........ 5413 223 5414 103 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties............... 3588 0 3589 0 M.5.d.
e. Secured by nonfarm nonresidential properties............................ 3590 612 3591 557 M.5.e.
</TABLE>
PART II. CHANGES IN ALLOWANCE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Balance originally reported in the December 31, 1998, Reports of Condition and Income.............. 3124 288,315 1.
2. Recoveries (must equal or exceed part I, item 9, column B above)................................... 2419 7,344 2.
3. LESS: Charge-offs (must equal or exceed part I, item 9, column A above)............................ 2432 32,531 3.
4. Provision for credit losses (must equal Schedule RI, item 4.a)..................................... 4230 25,305 4.
5. Adjustments* (see instructions for this schedule).................................................. 4815 2,543 5.
6. Balance end of current period (sum of items 1 through 5) (must equal or exceed
Schedule RC, item 4.b)............................................................................. A512 290,976 6.
</TABLE>
- -----------------
* Describe on Schedule RI-E--Explanations.
7
<PAGE> 10
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-6
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
<TABLE>
<CAPTION>
-----
I492 <--
------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries,
and IBF's
a. Interest income booked........................................................................ 4837 N/A 1.a.
b. Interest expense booked....................................................................... 4838 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and
IBFs (item 1.a minus 1.b)..................................................................... 4839 N/A 1.c.
2. Adjustments for booking location of international operations:
a. Net interest income attributable to international operations booked at domestic offices....... 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign offices............... 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b).......................................... 4842 N/A 2.c.
3. Noninterest income and expense attributable to international operations:
a. Noninterest income attributable to international operations................................... 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international operations.................. 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations............................ 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a
minus 3.b and 3.c)............................................................................ 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before capital allocation
adjustment (sum of items 1.c, 2.c, and 3.d)...................................................... 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect
the effects of equity capital on overall bank funding costs...................................... 4845 N/A 5.
6. Estimated pretax income attributable to international operations after capital allocation
adjustment(sum of times 4 and 5)................................................................. 4846 N/A 6.
7. Income taxes attributable to income from international operations as estimated in item 6......... 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus 7)................... 4341 N/A 8.
</TABLE>
Memoranda
<TABLE>
<CAPTION>
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Intracompany interest income included in item 1.a above.......................................... 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above......................................... 4848 N/A M.2.
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income booked at IBFs................................................................... 4849 N/A 1.
2. Interest expense booked at IBFs.................................................................. 4850 N/A 2.
3. Noninterest income attributable to international operations booked at domestic offices
(excluding IBFs):
a. Gains (losses) and extraordinary items........................................................ 5491 N/A 3.a.
b. Fees and other noninterest income............................................................. 5492 N/A 3.b.
4. Provisions for loan and lease losses attributable to international operations booked at domestic
offices (excluding IBFs)......................................................................... 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at domestic offices
(excluding IBFs)................................................................................. 4853 N/A 5.
</TABLE>
8
<PAGE> 11
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-7
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-E--EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other noninterest
income and other noninterest expense in Schedule RI. (See instructions for
details.)
<TABLE>
<CAPTION>
-----
I495 <-
-----------------
Year-to-date
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2):
a. Net gains (losses) on other real estate owned .............................................. 5415 0 1.a.
b. Net gains (losses) on sales of loans ....................................................... 5416 0 1.b.
c. Net gains (losses) on sales of premises and fixed assets.................................... 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 5.f.(2):
d. TEXT 4461 Income from Bank-Owned Life Insurance (BOLI) 4461 9,390 1.d.
e. TEXT 4462 Net losses on lease-and residuals 4462 1,468 1.e.
f. TEXT 4463 4463 1.f.
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets .................................................. 4531 8,592 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net (gains) losses on other real estate owned .............................................. 5418 0 2.b.
c. Net (gains) losses on sales of loans ....................................................... 5419 0 2.c.
d. Net (gains) losses on sales of premises and fixed assets ................................... 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 7.c:
e. TEXT 4464 none 4464 0 2.e.
f. TEXT 4467 4467 2.f.
g. TEXT 4468 4468 2.g.
3. Extraordinary items and other adjustments and applicable income tax effect
(from Schedule RI, item 11) (itemize and describe all extraordinary items and
other adjustments):
a. (1) TEXT 6373 Effect of adopting FAS 133, "Accounting for Deriva 6373 0 3.a.(1)
(2) Applicable income tax effect RIAD 4486 0 3.a.(2)
b. (1) TEXT 4487 4487 3.b.(1)
(2) Applicable income tax effect RIAD 4488 3.b.(2)
c. (1) TEXT 4489 4489 3.c.(1)
(2) Applicable income tax effect RIAD 4491 3.c.(2)
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2)
(itemize and describe all adjustments):
a. TEXT 4492 n/a 4492 0 4.a.
b. TEXT 4493 4493 4.b.
5. Cumulative effect of change in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles):
a. TEXT 4494 n/a 4494 0 5.a.
b. TEXT 4495 4495 5.b.
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10)
(itemize and describe all corrections):
a. TEXT 4496 n/a 4496 0 6.a.
b. TEXT 4497 4497 6.b.
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RI-8
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RI-E--CONTINUED
<TABLE>
<CAPTION>
--------------------
Year-to-date
--------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S><C> <C> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13)
(itemize and describe all such transactions):
a. TEXT 4498 n/a 4498 0 7.a.
b. TEXT 4499 4499 7.b.
8. Adjustments to allowance for credit losses (from Schedule RI-B, part II, item 5)
(itemize and describe all adjustments):
a. TEXT 4521 Change incident to business combination 4521 2,543 8.a.
b. TEXT 4522 4522 8.b.
9. Other explanations (the space below is provided for the bank to briefly describe, at its I498 I499
option, any other significant items affecting the Report of Income):
No comment [X] (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-1
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC -- BALANCE SHEET
<TABLE>
<CAPTION>
-----
C400 <--
------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) ....................................... 0081 957,763 1.a.
b. Interest-bearing balances (2) ............................................................... 0071 1,693 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .................................. 1754 23,044 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ................................ 1773 5,318,512 2.b.
3. Federal funds sold and securities purchased under agreements to resell ......................... 1350 22,730 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 19,991,705 4.a.
b. LESS: Allowance for loan and lease losses ................... RCFD 3123 290,976 4.b.
c. LESS: Allocated transfer risk reserve ....................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ......................................... 2125 19,700,729 4.d.
5. Trading assets (from Schedule RC-D) ............................................................ 3545 6,466 5.
6. Premises and fixed assets (including capitalized leases) ....................................... 2145 446,342 6.
7. Other real estate owned (from Schedule RC-M) ................................................... 2150 17,853 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)........ 2130 7,696 8.
9. Customers' liability to this bank on acceptances outstanding ................................... 2155 19,402 9.
10. Intangible assets (from Schedule RC-M) ......................................................... 2143 751,923 10.
11. Other assets (from Schedule RC-F) .............................................................. 2160 1,138,695 11.
12. Total assets (sum of items 1 through 11) ....................................................... 2170 28,412,848 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
11
<PAGE> 14
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-2
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
part I) .................................................................................... RCON 2200 18,993,560 13.a.
(1) Noninterest-bearing(1) ................................ RCON 6631 2,982,925 13.a.(1)
(2) Interest-bearing ...................................... RCON 6636 16,010,635 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E,
part II) ................................................................................... RCFN 2200 209,856 13.b.
(1) Noninterest-bearing ................................... RCFN 6631 0 13.b.(1)
(2) Interest-bearing ...................................... RCFN 6636 209,856 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase .................... RCFD 2800 2,571,414 14.
15. a. Demand notes issued to the U.S. Treasury ................................................... RCON 2840 27,000 15.a.
b. Trading liabilities (from Schedule RC-D) ................................................... RCFD 3548 0 15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less .............................................. RCFD 2332 1,477,541 16.a.
b. With a remaining maturity of more than one year through three years ........................ RCFD A547 1,390,149 16.b.
c. With a remaining maturity of more than three years ......................................... RCFD A548 237,985 16.c.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding ...................................... RCFD 2920 19,402 18.
19. Subordinated notes and debentures(2) .......................................................... RCFD 3200 767,901 19.
20. Other liabilities (from Schedule RC-G) ........................................................ RCFD 2930 483,740 20.
21. Total liabilities (sum of items 13 through 20) ................................................ RCFD 2948 26,178,548 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ................................................. RCFD 3838 0 23.
24. Common stock .................................................................................. RCFD 3230 40,000 24.
25. Surplus (exclude all surplus related to preferred stock) ...................................... RCFD 3839 832,836 25.
26. a. Undivided profits and capital reserves ..................................................... RCFD 3632 1,379,554 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ..................... RCFD 8434 (18,090) 26.b.
c. Accumulated net gains (losses) on cash flow hedges ......................................... RCFD 4336 0 26.c.
27. Cumulative foreign currency translation adjustments ........................................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) ............................................. RCFD 3210 2,234,300 28.
29. Total liabilities and equity capital (sum of items 21 and 28) ................................. RCFD 3300 28,412,848 29.
</TABLE>
<TABLE>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1998 ................................................................ RCFD 6724 2 M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a
certified public accounting firm which submits a
report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted
auditing standards by a certified public accounting
firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
4 = Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5 = Review of the bank's financial statements by external
auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
12
<PAGE> 15
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-3
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-A--CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading
<TABLE>
<CAPTION>
----
C405 <-
---------------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
----------------- -----------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and
coin................................................................... 0022 509,033 1.
a. Cash items in process of collection and unposted debits ........... 0020 244,129 1.a.
b. Currency and coin .................................................. 0080 264,904 1.b.
2. Balances due from depository institutions in the U.S................... 0082 145,140 2.
a. U.S. branches and agencies of foreign banks (including their IBFs).. 0083 0 2.a.
b. Other commercial banks in the U.S. and other depository institutions
in the U.S. (including their IBFs) ................................. 0085 145,140 2.b.
3. Balances due from banks in foreign countries and foreign central banks 0070 0 3.
a. Foreign branches of other U.S. banks ............................... 0073 0 3.a.
b. Other banks in foreign countries and foreign central banks ......... 0074 0 3.b.
4. Balances due from Federal Reserve Banks ............................... 0090 305,283 0090 305,283 4.
5. Total (sum of items 1 through 4) (total of column A must equal
Schedule RC, sum of items 1.a and 1.b) ................................ 0010 959,456 0010 959,456 5.
---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2,
column B above) ........................................................................................... 0050 143,447 M.1.
</TABLE>
SCHEDULE RC-B--SECURITIES
Exclude assets held for trading.
<TABLE>
<CAPTION>
----
C410 <-
-----------------------------------------------------------------------------------
Held -To-maturity Available-for-sale
-----------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amoritzed Cost Fair Value (1)
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury Securities .......... 0211 156 0213 156 1286 745,580 1287 736,861 1.
2. U.S. Government agency obligations
(exclude mortgage-backed
securities):
a. Issued by U.S. Government
agencies (2) .................. 1289 0 1290 0 1291 0 1293 0 2.a.
b. Issued by U.S.Government-sponsored
agencies (3) .................. 1294 0 1295 0 1297 1,441,258 1298 1,428,169 2.b.
</TABLE>
- ---------------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, Resolution Funding Corporation, the Student Loan
Marketing Association, and the Tennessee Valley Authority.
13
<PAGE> 16
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-4
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
----------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amoritzed Cost Fair Value (1)
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3. Securities issued by states
and political subdivisions
in the U.S.:
a. General obligations ....... 1676 8,590 1677 8,691 1678 226,688 1679 226,797 3.a.
b. Revenue obligations ....... 1681 14,298 1686 14,567 1690 61,472 1691 62,175 3.b.
c. Industrial development
and similar obligations ... 1694 0 1695 0 1696 0 1697 0 3.c.
4. Mortgage-backed
securities (MBS):
a. Pass-through securities:
(1) Guaranteed by
GNMA .................. 1698 0 1699 0 1701 46,327 1702 47,290 4.a.(1)
(2) Issued by FNMA
and FHLMC ............. 1703 0 1705 0 1706 1,533,216 1707 1,524,292 4.a.(2)
(3) Other pass-through
securities ............ 1709 0 1710 0 1711 0 1713 0 4.a.(3)
b. Other mortagage-backed
securities (include CMOs,
REMICs, and stripped
MBS):
(1) Issued or guaranteed
by FNMA, FHLMC,
or GNMA ............... 1714 0 1715 0 1716 949,422 1717 949,373 4.b.(1)
(2) Collateralized
by MBS issued or
guaranteed by FNMA,
FHLMC, or GNMA ........ 1718 0 1719 0 1731 40 1732 40 4.b.(2)
(3) All other mortgage-backed
securities ............ 1733 0 1734 0 1735 0 1736 0 4.b.(3)
5. Other debt securities:
a. Other domestic debt
securities ................ 1737 0 1738 0 1739 309,287 1741 310,322 5.a.
b. Foreign debt
securities ................ 1742 0 1743 0 1744 3,499 1746 3,500 5.b.
6. Equity securities:
a. Investments in mutual
Funds and other equity
securities with readily
determinable fair values .. A510 0 A511 0 6.a.
b. All other equity
securities(1) ............. 1752 29,693 1753 29,693 6.b.
7. Total (sum of items 1
through 6) (total of
column A must equal
Schedule RC, item 2.a.)
(total of column D must
equal Schedule RC,
item 2.b) .................... 1754 23,044 1771 23,414 1772 5,346,482 1773 5,318,512 7.
</TABLE>
- -------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b., column D.
14
<PAGE> 17
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-5
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-B--CONTINUED
<TABLE>
<CAPTION>
-----
Memoranda C412 <-
-----------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Pledged securities(1) .............................................................. 0416 2,267,548 M.1.
2. Maturity and repricing data for DEBT securities(1),(2) (excluding those in
nonaccrual status):
a. Securities issued by the U.S. Treasury, U.S. Government agencies, and states and
political subdivisions in the U.S.; other non-mortgage debt securities; and
mortgage pass-through securities other than those backed by closed-end first lien
1-4 family residential mortgages with a remaining maturity or repricing frequency
of:(3)(4)
(1) Three months or less ........................................................ A549 4,155 M.2.a.(1)
(2) Over three months through 12 months ......................................... A550 7,672 M.2.a.(2)
(3) Over one year through three years ........................................... A551 195,049 M.2.a.(3)
(4) Over three years through five years ......................................... A552 1,286,896 M.2.a.(4)
(5) Over five years through 15 years ............................................ A553 1,190,496 M.2.a.(5)
(6) Over 15 years ............................................................... A554 106,600 M.2.a.(6)
b. Mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or repricing frequency of:(3)(5)
(1) Three months or less ........................................................ A555 0 M.2.b.(1)
(2) Over three months through 12 months ......................................... A556 0 M.2.b.(2)
(3) Over one year through three years ........................................... A557 9 M.2.b.(3)
(4) Over three years through five years ......................................... A558 0 M.2.b.(4)
(5) Over five years through 15 years ............................................ A559 801,981 M.2.b.(5)
(6) Over 15 years ............................................................... A560 769,592 M.2.b.(6)
c. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS; exclude
mortgage pass-through securities) with an expected average life of: (6)
(1) Three years or less ......................................................... A561 51,284 M.2.c.(1)
(2) Over three years ............................................................ A562 898,129 M.2.c.(2)
d. Debt securities with a REMAINING MATURITY of one year or less (included in
Memorandum items 2.a. through 2.c above) ........................................ A248 50,647 M.2.d.
3.-6. Not applicable
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-
sale or trading securities during the calendar year-to-date (report the amortized
cost at date of sale or transfer) .................................................. 1778 0 M.7.
8. NOT APPLICABLE
9. Structured notes (included in the held-to-maturity and available-for-sale accounts
in Schedule RC-B, items 2, 3, and 5):
a. Amortized cost .................................................................. 8782 0 M.9.a.
b. Fair value ...................................................................... 8783 0 M.9.b.
</TABLE>
- ----------------------
(1) Includes held-to-maturity securities at amortized cost and
available-for-sale securities at fair value.
(2) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(3) Report fixed rate debt securities by remaining maturity and floating rate
debt securities by reporting frequency.
(4) Sum of Memorandum items 2.a.(1) through 2.a.(6) plus any nonaccrual debt
securities in the categories of debt securities reported in Memorandum item
2.a that are included in Schedule RC-N, item 9, column C, must equal
Schedule RC-B, sum of items 1, 2, 3, and 5, columns A and D, plus mortgage
pass-through securities other than those backed by closed-end first lien 1-4
family residential mortgages included in Schedule RC-B, item 4.a, columns A
and D.
(5) Sum of Memorandum items 2.b.(1) through 2.b.(6) plus any nonaccrual
mortgage pass-through securities backed by closed-end first lien
1-4 family residential mortgages included in Schedule RC-N, item 9,
column C, must equal Schedule RC-B, item 4.a, sum of columns A and D, less
the amount of mortgage pass-through securities other than those backed by
closed-end first lien 1-4 family residential mortgages included in Schedule
RC-B, item 4.a columns A and D.
(6) Sum of Memorandum items 2.c.(1) and 2.c.(2) plus any nonaccrual "Other
mortgage-backed securities" included in Schedule RC-N, item 9,
column C, must equal Schedule RC-B, item 4.b, sum of columns A and D.
15
<PAGE> 18
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-6
City, State Zip: Columbus, OH 43287 Printed 06/02/1999 at 15:00
FDIC Certificate No: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-C--LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowance for loan and lease losses from amounts reported in
this schedule. Report total loans and leases, net of unearned income. Exclude
assets held for trading and commercial paper.
<TABLE>
<CAPTION>
--------
C415 <-
---------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
---------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate............................................. 1410 8,314,657 1.
a. Construction and land development..................................... 1415 765,304 1.a.
b. Secured by farmland (including farm residential and other
improvements)......................................................... 1420 42,158 1.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit..................... 1797 1,452,196 1.c.(1)
(2) All other loans secured by 1-4 family residential properties:
(a) Secured by first liens........................................ 5367 1,878,449 1.c.(2)(a)
(b) Secured by junior liens....................................... 5368 788,802 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties............. 1460 185,533 1.d.
e. Secured by nonfarm nonresidential properties.......................... 1480 3,202,215 1.e.
2. Loans to depository institutions:
a. To commercial banks in the U.S. ...................................... 1505 22,115 2.a.
(1) To U.S. branches and agencies of foreign banks.................... 1506 0 2.a.(1)
(2) To other commercial banks in the U.S. ............................ 1507 22,115 2.a.(2)
b. To other depository institutions in the U.S. ......................... 1517 12,000 1517 12,000 2.b.
c. To banks in foreign countries......................................... 1510 0 2.c.
(1) To foreign branches of other U.S. banks........................... 1513 0 2.c.(1)
(2) To other banks in foreign countries............................... 1516 0 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers...... 1590 111,614 1590 111,614 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)......................................... 1763 4,576,582 1763 4,576,582 4.a.
b. To non-U.S. addressees (domicile)..................................... 1764 0 1764 0 4.b.
5. Acceptances of other banks:
a. Of U.S. banks......................................................... 1756 94 1756 94 5.a.
b. Of foreign banks...................................................... 1757 592 1757 592 5.b.
6. Loans to individuals for household, family, and other personal
expenditures (i.e., consumer loans) (includes purchased paper)........... 1975 4,529,490 6.
a. Credit cards and related plans (includes check credit and other
revolving credit plans)............................................... 2008 527,171 6.a.
b. Other (includes single payment, installment, and all student loans)... 2011 4,002,319 6.b.
7. Loans to foreign governments and official institutions (including
foreign central banks)................................................... 2081 0 2081 0 7.
8. Obligations (other than securities and leases) of states and political
subdivisions in the U.S. ................................................ 2107 92,772 2107 92,772 8.
9. Other loans.............................................................. 1563 205,804 9.
a. Loans for purchasing or carrying securities (secured and unsecured)... 1545 48,942 9.a.
b. All other loans (exclude consumer loans).............................. 1564 156,862 9.b.
10. Lease financing receivables (net of unearned income)..................... 2165 2,126,229 10.
a. Of U.S. addressees (domicile)......................................... 2182 2,126,229 10.a.
b. Of non-U.S. addressees (domicile)..................................... 2183 0 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above.......... 2123 244 2123 244 11.
12. Total loans and leases, net of unearned income (sum of items 1
through 10 minus item 11) (total of column A must equal
Schedule RC, item 4.a)................................................... 2122 19,991,705 2122 19,991,705 12.
</TABLE>
16
<PAGE> 19
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-7
City, State Zip: Columbus, OH 43287 Printed 06/02/1999 at 15:00
FDIC Certificate No.: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-C-- CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
Memoranda ------------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Not applicable
2. Loans and leases restructured and in compliance with modified terms (included in Schedule
RC-C, part I, above and not reported as past due or nonaccrual in Schedule RC-N,
Memorandum item 1):
a. Loans secured by real estate:
(1) To U.S. addressees (domicile)....................................................... RCFD 1687 2,214 M.2.a.(1)
(2) To non-U.S. addressees (domicile)................................................... RCFD 1689 0 M.2.a.(2)
b. All other loans and all lease financing receivables (exclude loans to individuals for
household, family, and other personal expenditures)...................................... RCFD 8691 550 M.2.b.
c. Commercial and industrial loans to and lease financing receivables of non-U.S.
addresses (domicile) included in Memorandum item 2.b above............................... RCFD 8692 0 M.2.c.
3. Maturity and repricing data for loans and leases (excluding those in nonaccrual status):
a. Closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices (reported in Schedule RC-C, part I, item 1.c(2)(a), column B)
with a remaining maturity or repricing frequency of:(1)(2)
(1) Three months or less................................................................. RCON A564 354,289 M.3.a.(1)
(2) Over three months through 12 months.................................................. RCON A565 526,334 M.3.a.(2)
(3) Over one year through three years.................................................... RCON A566 181,930 M.3.a.(3)
(4) Over three years through five years.................................................. RCON A567 173,209 M.3.a.(4)
(5) Over five years through 15 years..................................................... RCON A568 266,945 M.3.a.(5)
(6) Over 15 years........................................................................ RCON A569 357,365 M.3.a.(6)
b. All loans and leases (reported in Schedule RC-C, part I, items 1 through 10, column A)
EXCLUDING closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices (reported in Schedule RC-C, part I, item 1.c.(2)(a), column B)
with a remaining maturity or repricing frequency of:(1)(3)
(1) Three months or less................................................................. RCFD A570 7,404,692 M.3.b.(1)
(2) Over three months through 12 months.................................................. RCFD A571 1,584,994 M.3.b.(2)
(3) Over one year through three years.................................................... RCFD A572 3,400,671 M.3.b.(3)
(4) Over three years through five years.................................................. RCFD A573 4,216,478 M.3.b.(4)
(5) Over five years through 15 years..................................................... RCFD A574 1,374,939 M.3.b.(5)
(6) Over 15 years........................................................................ RCFD A575 75,987 M.3.b.(6)
c. Loans and leases (reported in Schedule RC-C, part I, items 1 through 10, column A)
with a REMAINING MATURITY of one year or less............................................ RCFD A247 3,868,481 M.3.c.
d. Loans secured by nonfarm nonresidential properties in domestic offices (reported in
Schedule RC-C, part I, item 1.e, column B) with a REMAINING MATURITY of over five years.. RCON A577 411,999 M.3.d.
e. Commercial and industrial loans (reported in Schedule RC-C, part I, item 4, column A)
with a REMAINING MATURITY of over three years............................................ RCFD A578 1,202,360 M.3.e.
</TABLE>
- ------------
(1) Report fixed rate loans and leases by remaining maturity and floating rate
loans by repricing frequency.
(2) Sum of Memorandum items 3.a.(1) through 3.a.(6) plus total nonaccrual
closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices included in Schedule RC-N, Memorandum item 3.c.(2),
column C, must equal total closed-end loans secured by first liens on 1-4
family residential properties from Schedule RC-C, part I, item 1.c. (2)(a),
column B.
(3) Sum of Memorandum items 3.b.(1) through 3.b.(6), plus total nonaccrual loans
and leases from Schedule RC-N, sum of items 1 through 8, column C, minus
nonaccrual closed-end loans secured by first liens on 1-4 family
residential properties in domestic offices included in Schedule RC-N,
Memorandum item 3.c.(2), column C, must equal total loans and leases from
Schedule RC-C, part I, sum of items 1 through 10, column A, minus total
closed-end loans secured by first liens on 1-4 family residential properties
in domestic offices from Schedule RC-C, part I, item 1.c.(2)(a), column B.
17
<PAGE> 20
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-8
City, State Zip: Columbus, OH 43287 Printed 06/02/1999 at 15:00
</TABLE>
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
Memoranda (continued)
<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4. Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RC-C, part I, items 4 and 9, column A,
page RC-6(1)............................................................................... RCFD 2746 120,531 M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, page RC-6).............. RCFD 5369 279,794 M.5.
6. Adjustable rate closed-end loans secured by first liens on 1 -4 family residential properties
in domestic offices (included in Schedule RC-C, part I, item 1.c.(2)(a), column B, page RC-6) RCON 5370 565,476 M.6.
</TABLE>
- ----------
(1) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, item 1, column A.
SCHEDULE RC-D TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in total
assets or with $2 billion or more in par/ notional amount of off-balance sheet
derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
<TABLE>
<CAPTION>
-----
C420 <--
-----------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. U.S. Treasury securities in domestic offices................................................. RCON 3531 0 1.
2. U.S. Government agency obligations in domestic offices (exclude mortgage- backed securities . RCON 3532 0 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices....... RCON 3533 0 3.
4. Mortgages-backed securities (MBS) in domestic offices:
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA...................... RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA
(include CMOs, REMICs, and stripped MBS).................................................. RCON 3535 0 4.b.
c. All other mortgage-backed securities...................................................... RCON 3536 0 4.c.
5. Other debt securities in domestic offices.................................................... RCON 3537 0 5.
6. -8. Not applicable.
9. Other trading assets in domestic offices..................................................... RCON 3541 6,466 9.
10. Trading assets in foreign offices............................................................ RCFN 3542 0 10.
11. Revaluation gains in interest rate, foreign exchange rate, and other commodity and equity
contracts:
a. In domestic offices....................................................................... RCON 3543 0 11.a.
b. In foreign offices........................................................................ RCFN 3543 0 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5)............ RCFD 3545 6,466 12.
-----------------------
LIABILITIES Bil Mil Thou
-----------------------
13. Liability for short positions................................................................ RCFD 3546 0 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity
contracts.................................................................................... RCFD 3547 0 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b)....... RCFD 3548 0 15.
</TABLE>
18
<PAGE> 21
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-9
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: 06560
-----
</TABLE>
SCHEDULE RC-E--DEPOSIT LIABILITIES
PART I DEPOSITS IN DOMESTIC OFFICES
<TABLE>
<CAPTION>
-----
C425 <-
------------------------------------------------------------
Nontransaction
Transaction Accounts Accounts
------------------------------------------------------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
------------------------------------------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations.............. 2201 3,276,618 2240 2,684,472 2346 14,745,256 1.
2. U.S. Government.......................................... 2202 2,327 2280 2,327 2520 0 2.
3. States and political subdivisions in the U.S.............. 2203 97,381 2290 94,375 2530 670,227 3.
4. Commercial banks in the U.S.............................. 2206 61,706 2310 61,706 2550 0 4.
5. Other depository institutions in the U.S................. 2207 0 2312 0 2349 0 5.
6. Banks in foreign countries............................... 2213 1,044 2320 1,044 2236 0 6.
7. Foreign governments and official institutions
(including foreign central banks)........................ 2216 0 2300 0 2377 0 7.
8. Certified and official checks............................ 2330 139,001 2330 139,001 8.
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a)............................................... 2215 3,578,077 2210 2,982,925 2385 15,415,483 9.
</TABLE>
Memoranda
<TABLE>
<CAPTION>
-----------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C):
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts.............................. 6835 1,022,910 M.1.a.
b. Total brokered deposits.......................................................................... 2365 174,410 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000................................................ 2343 0 M.1.c.(1)
(2) Issued EITHER in denominations of $100,000 OR in denominations greater than
$100,000 and participated out by the broker in shares of $100,000 or less.................... 2344 0 M.1.c.(2)
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining
maturity of one year or less (included in Memorandum item 1.c.(1) above)...................... A243 0 M.1.d.(1)
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining
maturity of one year or less (included in Memorandum item 1.b above).......................... A244 174,410 M.1.d.(2)
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S.
reported in item 3 above which are secured or collateralized as required under state law)
(TO BE COMPLETED FOR THE DECEMBER REPORT ONLY)................................................... 5590 N/A M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
must equal item 9, column C above):
a. Savings deposits:
(1) Money market deposits accounts (MMDAs)....................................................... 6810 4,032,933 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs)...................................................... 0352 3,748,469 M.2.a.(2)
b. Total time deposits of less than $100,000........................................................ 6648 5,709,983 M.2.b.
c. Total time deposits of $100,000 or more.......................................................... 2604 1,924,098 M.2.c.
3. All NOW accounts (included in column A above)....................................................... 2398 463,564 M.3.
4. Not applicable
</TABLE>
19
<PAGE> 22
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-10
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-E--CONTINUED
PART I. CONTINUED
Memoranda (continued)
<TABLE>
<CAPTION>
---------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Maturity and repricing data for time deposits of less than $100,000:
a. Time deposits of less than $100,000 with a remaining maturity or repricing
frequency of: (1) (2)
(1) Three months or less.................................................. A579 1,697,311 M.5.a.(1)
(2) Over three months through 12 months................................... A580 2,432,943 M.5.a.(2)
(3) Over one year through three years..................................... A581 1,181,238 M.5.a (3)
(4) Over three years...................................................... A582 398,491 M.5.a.(4)
b. Time deposits of less than $100,000 with a REMAINING MATURITY of one year
or less (included in Memorandum items 5.a.(1) through 5.a.(4) above)...... A241 4,130,248 M.5.b.
6. Maturity and repricing data for time deposits of $100,000 or more:
a. Time deposits of $100,000 or more with a remaining maturity or repricing
frequency of: (1) (3)
(1) Three months or less.................................................. A584 886,844 M.6.a.(1)
(2) Over three months through 12 months................................... A585 755,846 M.6.a.(2)
(3) Over one year through three years..................................... A586 244,002 M.6.a.(3)
(4) Over three years...................................................... A587 37,406 M.6.a.(4)
b. Time deposits of $100,000 or more with a REMAINING MATURITY of one year or
less (included in Memorandum items 6.a.(1) through 6.a.(4) above)......... A242 1,642,689 M.6.b.
</TABLE>
- ------------
(1) Report fixed rate time deposits by remaining maturity and floating rate time
deposits by repricing frequency.
(2) Sum of Memorandum items 5.a.(1) trough 5.a.(4) must equal Schedule RC-E,
Memorandum item 2.b above.
(3) Sum of Memorandum items 6.a.(1) through 6.a.(4) must equal Schedule RC-E,
Memorandum item 2.c above.
20
<PAGE> 23
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-11
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-E--CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFS)
<TABLE>
<CAPTION>
---------------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
Deposits of:
<S> <C> <C>
1. Individuals, partnerships, and corporations.................................................... 2621 72,870 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks)................................. 2623 0 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks, including their IBFs).... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks)................ 2650 0 4.
5. Certified and official checks.................................................................. 2330 0 5.
6. All other deposits............................................................................. 2668 136,986 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b)........................... 2200 209,856 7.
---------------------------
Memorandum
---------------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
1. Time deposits with a remaining maturity of one year of less (included in Part II, item 7 above) A245 209,856 M.1.
---------------------------
<CAPTION>
SCHEDULE RC-F--OTHER ASSETS
--------
C430 <-
---------------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Income earned, not collected on loans.......................................................... RCFD 2164 91,298 1.
2. Net deferred tax assets (1).................................................................... RCFD 2148 0 2.
3. Interest-only strips receivable (not in the form of a security) (2) on:
a. Mortgage loans.............................................................................. RCFD A519 0 3.a.
b. Other financial assets...................................................................... RCFD A520 0 3.b.
4. Other (itemize and describe amounts that exceed 25% of this item).............................. RCFD 2168 1,047,397 4.
---------- -----------------------------
a. TEXT 3549 BANK OWNED LIFE INSURANCE RCFD 3549 737,228 4.a.
---------------------------------------------------------------
b. TEXT 3550 RCFD 3550 4.b.
---------------------------------------------------------------
c. TEXT 3551 RCFD 3551 4.c.
--------------------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)............................. RCFD 2160 1,138,695 5.
---------------------------
---------------------------
Memorandum Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
1. Deferred tax assets disallowed for regulatory capital purposes................................. RCFD 5610 0 M.1.
---------------------------
<CAPTION>
SCHEDULE RC-G--OTHER LIABILITIES
--------
C435 <-
---------------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices(3).............................. RCON 3645 79,517 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable)................... RCFD 3646 263,114 1.b.
2. Net deferred tax liabilities(1)................................................................ RCFD 3049 65,178 2.
3. Minority interest in consolidated subsidiaries................................................. RCFD 3000 238 3.
4. Other (itemize and describe amounts that exceed 25% of this item) ............................. RCFD 2938 75,693 4.
---------- -----------------------------
a. TEXT 3552 DEFERRED INCOME - SALE/LEASEBACK AGREEMENT RCFD 3552 56,612 4.a.
---------------------------------------------------------------
b. TEXT 3553 RCFD 3553 4.b.
---------------------------------------------------------------
c. TEXT 3554 RCFD 3554 4.c.
--------------------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)............................. RCFD 2930 483,740 5.
---------------------------
</TABLE>
- ----------------
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) Report interest-only strips receivable in the form of a security as
available-for-sale securities in Schedule RC, item 2.b., or as trading
assets in Schedule RC, item 5, as appropriate.
(3) For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE> 24
<TABLE>
<S> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-12
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
<TABLE>
<CAPTION>
----
C440 <-
-------------------
Domestic Offices
-------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Customers' liability to this bank on accepting outstanding ............................... 2155 19,402 1.
2. Bank's liability on acceptances executed and outstanding ................................. 2920 19,402 2.
3. Federal funds sold and securities purchased under agreements to resell ................... 1350 22,730 3.
4. Federal funds purchased and securities sold under agreements to repurchase ............... 2800 2,571,413 4.
5. Other borrowed money...................................................................... 3190 3,105,675 5.
EITHER
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs .............. 2163 N/A 6.
OR
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs ................ 2941 296,684 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries,
and IBFs)................................................................................. 2192 28,412,848 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries,
and IBFs) ................................................................................ 3129 25,881,864 9.
-------------------
IN ITEMS 10-17, REPORT THE AMORTIZED (HISTORICAL) COST OF BOTH HELD-TO-MATURITY AND RCON Bil Mil Thou
AVAILABLE-FOR-SALE SECURITIES IN DOMESTIC OFFICES. -------------------
10. U.S. Treasury securities ................................................................ 1039 745,736 10.
11. U.S. Government agency obligations (exclude mortgage-backed securities) .................. 1041 1,441,258 11.
12. Securities issued by states and political subdivisions in the U.S. ....................... 1042 311,048 12.
13. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ...................................... 1043 1,579,543 13.a.(1)
(2) Other pass-through securities ..................................................... 1044 0 13.a.(2)
b. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS):
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ...................................... 1209 949,422 13.b.(1)
(2) All other mortgage-backed securities .............................................. 1280 40 13.b.(2)
14. Other domestic debt securities ........................................................... 1281 309,287 14.
15. Foreign debt securities .................................................................. 1282 3,499 15.
16. Equity securities:
a. Investments in mutual funds and other equity securities with readily
determinable fair values .............................................................. A510 0 16.a.
b. All other equity securities ........................................................... 1752 29,693 16.b
17. Total amortized (historical) cost of both held-to-maturity and available-for-sale
securities (sum of items 10 through 16) .................................................. 1374 5,369,526 17.
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
<CAPTION>
-------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EITHER
1. Net due from the IBF of the domestic offices of the reporting bank ....................... 3051 N/A M.1.
OR
2. Net due to the IBF of the domestic offices of the reporting bank ......................... 3059 N/A M.2.
</TABLE>
22
<PAGE> 25
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-13
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFS
To be completed only by banks with IBFs and other "Foreign" offices.
<TABLE>
<CAPTION>
-----
C445 <-
-------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12) ............... 2133 N/A 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I,
item 12, column A) .......................................................................... 2076 N/A 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4,
column A) ................................................................................... 2077 N/A 3.
4. Total IBF liabilities (component of Schedule RC, item 21) ................................... 2898 N/A 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E,
part II, items 2 and 3)...................................................................... 2379 N/A 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6) ... 2381 N/A 6.
</TABLE>
SCHEDULE RC-K--QUARTERLY AVERAGES (1)
<TABLE>
<CAPTION>
------
C455 <-
--------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Interest-bearing balances due from depository institutions .................................. RCFD 3381 5,288 1.
2. U.S. Treasury securities and U.S. Government agency obligations (2) (INCLUDING
MORTGAGE-BACKED SECURITIES ISSUED OR GUARANTEED BY FNMA, FHLMC, OR GNMA) .................... RCFD 3382 4,517,729 2.
3. Securities issued by states and political subdivisions in the U.S. (2) ...................... RCFD 3383 303,959 3.
4. a. Other debt securities(2) INCLUDING MORTGAGE-BACKED SECURITIES NOT ISSUED OR GUARANTEED
BY FNMA, FHLMC, OR GNMA).................................................................. RCFD 3647 329,948 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock) .... RCFD 3648 29,685 4.b.
5. Federal funds sold and securities purchased under agreements to resell....................... RCFD 3365 140,944 5.
6. Loans:
a. Loans in domestic offices:
(1) Total loans .......................................................................... RCON 3360 19,901,299 6.a.(1)
(2) Loans secured by real estate ......................................................... RCON 3385 6,400,932 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers .................. RCON 3386 112,593 6.a.(3)
(4) Commercial and industrial loans ...................................................... RCON 3387 5,902,927 6.a.(4)
(5) Loans to individuals for household, family, and other personal expenditures........... RCON 3388 5,435,137 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs ................ RCFN 3360 0 6.b.
7. Trading assets............................................................................... RCFD 3401 4,077 7.
8. Lease financing receivables (net of unearned income) ........................................ RCFD 3484 2,039,774 8.
9. Total assets (4) ............................................................................ RCFD 3368 28,400,654 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts,
and telephone and preauthorized transfer accounts) (exclude demand deposits) ................ RCON 3485 3,326,635 10.
11. Nontransaction accounts in domestic offices:
a. Money market deposit accounts (MMDAs) .................................................... RCON 3486 3,906,119 11.a.
b. Other savings deposits ................................................................... RCON 3487 3,810,725 11.b.
c. Time deposits of $100,000 or more ........................................................ RCON A514 1,732,571 11.c.
d. Time deposits of less than $100,000 ...................................................... RCON A529 6,047,825 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs .... RCFN 3404 288,894 12.
13. Federal funds purchased and securities sold under agreements to repurchase .................. RCFD 3353 2,854,771 13.
14. Other borrowed money (includes mortgage indebtedness and obligations under capitalized
leases) ..................................................................................... RCFD 3355 2,911,580 14.
</TABLE>
- ------------
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on historical
cost.
(4) The quarterly average for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
23
<PAGE> 26
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High Street Page RC-14
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
Schedule RC-L -- Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
<TABLE>
<CAPTION>
----
C460 <--
----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unused commitments:
a. Revolving, open-end lines secured by 1-4 family
residential properties, e.g., home equity lines......... 3814 2,369,803 1.a.
b. Credit card lines....................................... 3815 1,992,256 1.b.
c. Commercial real estate, construction, and land
development:
(1) Commitments to fund loans secured by real
estate............................................. 3816 258,186 1.c.(1)
(2) Commitments to fund loans not secured by
real estate........................................ 6550 17,192 1.c.(2)
d. Securities underwriting................................. 3817 0 1.d.
e. Other unused commitments................................ 3818 3,784,709 1.e.
2. Financial standby letters of credit and foreign office
guarantees................................................... 3819 703,893 2.
a. Amount of financial standby letters of credit
conveyed to others RCFD 3820 14,879... 2.a.
3. Performance standby letters of credit and
foreign office guarantees.................................... 3821 43,491 3.
a. Amount of performance standby letters
of credit conveyed to others RCF 3822 2,168... 3.a.
4. Commercial and similar letters of credit..................... 3411 129,429 4.
5. Participations in acceptances (as described in the
instructions) conveyed to others by the reporting bank....... 3428 0 5.
6. Participations in acceptances (as described in the
instructions) acquired by the reporting (nonaccepting) bank.. 3429 0 6.
7. Securities borrowed.......................................... 3432 0 7.
8. Securities lent (including customers' securities lent
where the customer is indemnified against loss by the
reporting bank).............................................. 3433 0 8.
9. Financial assets transferred with recourse that have
been treated as sold for Call Report purposes:
a. First lien 1-to-4 family residential mortgage
loans:
(1) Outstanding principal balance of mortgages
transferred as of the report date.................. A521 9,629 9.a.(1)
(2) Amount of recourse exposure on these
mortgages as of the report date.................... A522 9,629 9.a.(2)
b. Other financial assets (excluding small business
obligations reported in item 9.c):
(1) Outstanding principal balance of assets
transferred as of the report date.................. A523 0 9.b.(1)
(2) Amount of recourse exposure on these assets
as of the report date.............................. A524 0 9.b.(2)
c. Small business obligations transferred with
recourse under Section 208 of the Riegle Community
Development and Regulatory Improvement Act of 1994:
(1) Outstanding principal balance of small business
obligations transferred as of the report date...... A249 0 9.c.(1)
(2) Amount of retained recourse on these obligations
as of the report date.............................. A250 0 9.c.(2)
10. Notional amount of credit derivatives:
a. Credit derivatives on which the reporting bank is
the guarantor........................................... A534 0 10.a.
b. Credit derivatives on which the reporting bank is
the beneficiary......................................... A535 0 10.b.
11. Spot foreign exchange contracts.............................. 8765 920 11.
12. All other off-balance sheet liabilities (exclude
off-balance sheet derivatives) (itemize and describe
each component of this item over 25% of Schedule RC,
item 28, "Total equity capital")............................. 3430 0 12.
a. TEXT 3555 RCFD 3555 12.a.
b. TEXT 3556 RCFD 3556 12.b.
c. TEXT 3557 RCFD 3557 12.c.
d. TEXT 3558 RCFD 3558 12.d.
</TABLE>
24
<PAGE> 27
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-15
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.:|0|6|5|6|0|
-----------
</TABLE>
Schedule RC-L--Continued
<TABLE>
<CAPTION>
-----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives)
(itemize and describe each component of this item over 25% of Schedule RC,
item 28, "Total equity capital") 5591 0 13.
a. TEXT 5592 RCFD 5592 13.a.
b. TEXT 5593 RCFD 5593 13.b.
c. TEXT 5594 RCFD 5594 13.c.
d. TEXT 5595 RCFD 5595 13.d.
<CAPTION>
-----------------
C461 <-
- ---------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
--------------------------- Contracts Contracts Contracts Other Contracts
Off-balance Sheet Derivatives ----------------- ------------------ ------------------ -----------------
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
14. Gross amounts (e.g.,
notional amounts) (for
each column,sum of items
14.a through 14.e must
equal sum of items 15,
16.a, and 16.b:
a. Futures contracts......... 0 0 0 0 14.a.
RCFD 8693 RCFD 8694 RCFD 8695 RCFD 8696
b. Forward contracts 470,072 74,241 0 0 14.b.
RCFD 8697 RCFD 8698 RCFD 8699 RCFD 8700
c. Exchange-traded option
contracts:
(1) Written options....... 0 0 0 0 14.c.(1)
RCFD 8701 RCFD 8702 RCFD 8703 RCFD 8704
(2) Purchased options..... 0 0 0 0 14.c.(2)
RCFD 8705 RCFD 8706 RCFD 8707 RCFD 8708
d. Over-the-counter option
contracts:
(1) Written options....... 240,274 0 0 0 14.d.(1)
RCFD 8709 RCFD 8710 RCFD 8711 RCFD 8712
(2) Purchased options..... 1,314,774 0 0 0 14.d.(2)
RCFD 8713 RCFD 8714 RCFD 8715 RCFD 8716
e. Swaps..................... 5,743,342 34,650 0 0 14.e.
RCFD 3450 RCFD 3826 RCFD 8719 RCFD 8720
15. Total gross notional amount
of derivative contracts
held for trading............. 1,407,224 74,241 0 0 15.
RCFD A126 RCFD A127 RCFD 8723 RCFD 8724
16. Gross notional amount of
derivative contracts held for
purposes other than trading:
a. Contracts marked to market 1,294,572 0 0 0 16.a.
RCFD 8725 RCFD 8726 RCFD 8727 RCFD 8728
b. Contracts not marked to
market.................... 5,066,666 34,650 0 0 16.b.
RCFD 8729 RCFD 8730 RCFD 8731 RCFD 8732
c. Interest rate swaps where
the bank has agreed to pay
a fixed rate.............. 900,000 16.c.
RCFD A589
</TABLE>
25
<PAGE> 28
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-16
City, State, Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-L--CONTINUED
<TABLE>
<CAPTION>
------
C462 <--
----------------------------------------------------------------------------------------
Dollar Amounts in Thousands (Column A) (Column B) (Column C) (Column D)
- ------------------------------ Interest Rate Foreign Exchange Equity Derivative Commodity and
Off-balance Sheet Derivatives Contracts Contracts Contracts Other Contracts
-----------------------------------------------------------------------------------------
Position Indicators RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17. Gross fair values of
derivative contracts:
a. Contracts held for
trading:
(1) Gross positive
fair value............ 8733 47,278 8734 502 8735 0 8736 0 17.a.(1)
(2) Gross negative
fair value............ 8737 44,853 8738 482 8739 0 8740 0 17.a.(2)
b. Contracts held for
purposes other than
trading that are marked
to market:
(1) Gross positive
fair value............ 8741 9,329 8742 0 8743 0 8744 0 17.b.(1)
(2) Gross negative
fair value............ 8745 1,694 8746 0 8747 0 8748 0 17.b.(2)
c. Contracts held for
purposes other than
trading that are not
marked to market:
(1) Gross positive
fair value............ 8749 36,669 8750 0 8751 0 8752 0 17.c.(1)
(2) Gross negative
fair value............ 8753 7,615 8754 1,573 8755 0 8756 0 17.c.(2)
<CAPTION>
---------------------
Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1.-2. Not applicable
3. Unused commitments with an original maturity exceeding one year that are reported in
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments
that are fee paid or otherwise legally binding)................................................ 3833 3,047,868 M.3.
a. Participations in commitments with an original maturity
exceeding one year conveyed to others..............................RCFD 3834 450,473 M.3.a.
4. To be completed only by banks with $1 billion or more in total assets:
Standby letters of credit and foreign office guarantees (both financial and performance) issued
to non-U.S. addressees (domicile) included in Schedule RC-L, items 2 and 3, above.............. 3377 2,600 M.4.
5. Loans to individuals for household, family, and other personal expenditures that
have been securitized and sold (with servicing retained), amounts outstanding by type of loan:
a. Loans to purchase private passenger automobiles (TO BE COMPLETED FOR THE
SEPTEMBER REPORT ONLY)...................................................................... 2741 N/A M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY).................................. 2742 0 M.5.b.
c. All other consumer credit (including mobile home loans)(TO BE COMPLETED FOR THE
SEPTEMBER REPORT ONLY)...................................................................... 2743 N/A M.5.c.
</TABLE>
26
<PAGE> 29
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-17
City, State Zip: Columbus, OH 43287 Printed 06/07/1999 at 11:17
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-M--MEMORANDA
<TABLE>
<CAPTION>
--------
C465 <-
------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors,
principal shareholders, and their related interests......................................... 6164 332,133 1.a.
b. Number of executive officers, directors, and principal shareholders to whom to the amount of
all extensions of credit by the reporting bank (including extensions of credit to
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number
of total capital as defined for this purpose in agency -----------------------------
regulations................................................... RCFD 6165 16 1.b.
-----------------------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
and agencies of FOREIGN BANKS(1) (included in Schedule RC, item 3)............................. 3405 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract.................................................... 5500 378,969 4.a.
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer...................................................... 5501 2,777 4.b.(1)
(2) Serviced without recourse to servicer................................................... 5502 948,678 4.b.(2)
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract................................................ 5503 2,590 4.c.(1)
(2) Serviced under a special option contract................................................ 5504 4,722,912 4.c.(2)
d. Mortgages serviced under other servicing contracts.......................................... 5505 1,964,743 4.d.
5. To be completed only by banks with $1 billion or more in total assets:
Customers' liability to this bank on acceptance outstanding (sum of items 5.1 and 5.b must
equal Schedule RC, item 9):
a. U.S. addressees (domicile).................................................................. 2103 19,402 5.a.
b. Non-U.S. addressees (domicile).............................................................. 2104 0 5.b.
6. Intangible assets:
a. Mortgage servicing assets................................................................... 3164 80,602 6.a.
(1) Estimated fair value of mortgage servicing assets..........-----------------------------
RCFD A590 81,069 6.a.(1)
-----------------------------
b. Other identifiable intangible assets:
(1) PURCHASED CREDIT CARD RELATIONSHIPS AND NONMORTGAGE SERVICING ASSETS.................... B026 0 6.b.(1)
(2) All other identifiable intangible assets................................................ 5507 60,436 6.b.(2)
c. Goodwill.................................................................................... 3163 610,885 6.c.
d. Total (sum of items 6.a., 6.b.(1), 6.b.(2), and 6.c) (must equal Schedule RC, item 10)...... 2143 751,923 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been grandfathered or
are otherwise qualifying for regulatory capital purposes.................................... 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to
redeem the debt................................................................................ 3295 0 7.
</TABLE>
- ----------------
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this item.
27
<PAGE> 30
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-18
City, State Zip: Columbus, OH 43287 Printed 06/07/1999 at 11:17
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-M--Continued
<TABLE>
<CAPTION>
--------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8. a. Other real estate owned:
(1) Direct and indirect investments in real estate ventures........................ RCFD 5372 0 8.a.(1)
(2) All other real estate owned:
(a) Construction and land development in domestic offices...................... RCON 5508 1,285 8.a.(2)(a)
(b) Farmland in domestic offices............................................... RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices...................... RCON 5510 3,605 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices......... RCON 5511 0 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices...................... RCON 5512 12,963 8.a.(2)(e)
(f) In foreign offices......................................................... RCON 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.b.(1) and 8.a.(2)) (must equal Schedule RC, item 7)...... RCFD 2150 17,853 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures........................ RCFD 5374 7,229 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies.. RCFD 5375 467 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)...... RCFD 2130 7,696 8.b.(3)
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus".............................. RCFD 3778 0 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include
proprietary, private label, and third party products):
a. Money market funds................................................................. RCON 6441 177,777 10.a.
b. Equity securities funds............................................................ RCON 8427 35,251 10.b.
c. Debt securities funds.............................................................. RCON 8428 16,248 10.c.
d. Other mutual funds................................................................. RCON 8429 28,426 10.d.
e. Annuities.......................................................................... RCON 8430 65,257 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above)........................................................................ RCON 8784 173,769 10.f.
11. Net unamortized realized deferred gains (losses) on off-balance sheet derivative
contracts included in assets and liabilities reported in Schedule RC.................. RCFD A525 414 11.
12. Amount of assets netted against nondeposit liabilities and deposits in foreign offices
(other than insured branches in Puerto Rico and U.S. territories and possessions) on
the balance sheet (Schedule RC) in accordance with generally accepted accounting
principles (1)........................................................................ RCFD A526 0 12.
13. Outstanding principal balance of loans other than 1-4 family residential mortgage
loans that are serviced for others (to be completed if this balance is more than
$10 million and exceeds ten percent of total assets)................................. RCFD A591 0 13.
</TABLE>
<TABLE>
<CAPTION>
----------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Reciprocal holdings of banking organizations' capital instruments
(TO BE COMPLETED FOR THE DECEMBER REPORT ONLY).......................................... 3836 N/A M.1.
</TABLE>
- ----------------
(1) Exclude netted on-balance sheet amounts associated with off-balance sheet
derivative contract, deferred tax assets netted against deferred tax
liabilities, and assets netted in accounting for pensions.
28
<PAGE> 31
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-19
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
<TABLE>
<CAPTION>
The FFIEC regards the information reported in --------
all of Memorandum item 1, in items 1 through 10, C470 <-
column A, and in Memorandum items 2 through 4, ------------------------------------------------------------------------
column A, as confidential (Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
------------------------------------------------------------------------
Dollars Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile).................. 1245 116,489 1246 19,700 1247 40,050 1.a.
b. To non-U.S. addressees (domicile).............. 1248 0 1249 0 1250 0 1.b.
2. Loans to depository institutions and acceptances
of other banks
a. To U.S. banks and other U.S. depository
institutions................................... 5377 0 5378 0 5379 0 2.a.
b. To foreign banks............................... 5380 0 5381 0 5382 0 2.b.
3. Loans to finance agricultural production and
other loans to farmers............................ 1594 1,244 1597 456 1583 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile).................. 1251 37,835 1252 9,078 1253 33,552 4.a.
b. To non-U.S. addressees (domicile).............. 1254 0 1255 0 1256 0 4.b.
5. Loans to individuals for household, family, and
other personal expenditures:
a. Credit cards and related plans................. 5383 8,894 5384 3,137 5385 0 5.a.
b. Other (includes single payment, installment,
and all student loans)......................... 5386 93,198 5387 17,722 5388 458 5.b.
6. Loans to foreign governments and official
institutions...................................... 5389 0 5390 0 5391 0 6.
7. All other loans................................... 5459 0 5460 0 5461 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile).................. 1257 30,341 1258 3,997 1259 56 8.a.
b. Of non-U.S. addressees (domicile).............. 1271 0 1272 0 1791 0 8.b.
9. Debt securities and other assets (exclude other
real estate owned and other repossessed assets)... 3505 0 3506 0 3507 0 9.
------------------------------------------------------------------------
====================================================================================================================================
<CAPTION>
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 10 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
10. Loans and leases reported in items 1 RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
through 8 above which are wholly or partially -----------------------------------------------------------------------
guaranteed by the U.S. Government................ 5612 2,237 5613 3,107 5614 1,279 10.
a. Guaranteed portion of loans and leases
included in item 10 above..................... 5615 1,430 5616 2,286 5617 621 10.a.
-----------------------------------------------------------------------
</TABLE>
29
<PAGE> 32
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High Street Page RC-20
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-N--Continued
<TABLE>
<CAPTION>
----------------
C473 <-
- ---------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
Memoranda ---------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 8, above
(and not reported in Schedule RC-C, part I,
Memorandum item 2).................................. 1658 0 1659 0 1661 0 M.1.
2. Loans to finance commercial real estate,
construction, and land development activities
(NOT SECURED BY REAL ESTATE) included in
Schedule RC-N, items 4 and 7, above................. 6558 0 6559 0 6560 0 M.2
3. Loans secured by real estate in domestic RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
offices (included in Schedule RC-N, item 1,
above):
a. Construction and land development.............. 2759 10,320 2769 1,658 3492 7,540 M.3.a.
b. Secured by farmland............................ 3493 0 3494 0 3495 0 M.3.b.
c. Secured by 1-4 family residential
properties:
(1) Revolving, open-end loans
secured by 1-4 family residential
properties and extended under
lines of credit........................... 5398 11,265 5399 3,523 5400 0 M.3.c.(1)
(2) All other loans secured by 1-4
family residential properties............. 5401 70,791 5402 10,738 5403 18,377 M.3.c.(2)
d. Secured by multifamily (5 or more)
residential properties......................... 3499 898 3500 95 3501 0 M.3.d.
e. Secured by nonfarm residential
properties..................................... 3502 23,215 3503 3,686 3504 14,133 M.3.e.
<CAPTION>
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
--------------------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou
--------------------------------------
<S> <C> <C> <C> <C> <C>
4. Interest rate, foreign exchange rate,
and other commodity and equity contracts:
a. Book value of amounts carried as
assets......................................... 3522 0 3528 0 M.4.a.
b. Replacement cost of contracts with a
positive replacement cost...................... 3529 0 3530 0 M.4.b.
</TABLE>
<TABLE>
----
C477 <-
----
Person to whom questions about the Reports of Condition and Income should be
directed:
<S> <C>
BILL TELZEROW, MANAGER OF FINANCIAL REPORTING (614) 480-4563
- --------------------------------------------------- --------------------------------------------------------
Name and Title (TEXT 8901) Telephone: Area code/phone number/extension (TEXT 8902)
(614) 480-5284
-------------------------------------------------------
FAX: Area code/phone number (TEXT 9116)
</TABLE>
30
<PAGE> 33
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-21
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-0--OTHER DATA FOR DEPOSIT INSURANCE AND FICO ASSESSMENTS
<TABLE>
<CAPTION>
C475 <--
--------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unposted debits (see instructions):
a. Actual amount of all unposted debits........................................................... 0030 N/A 1.a.
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits........................................ 0031 0 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits (1).......................... 0032 0 1.b.(2)
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits.......................................................... 3510 6,629 2.a.
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits....................................... 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and saving deposits(1)........................... 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total
deposits in domestic offices)..................................................................... 3520 0 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in Puerto
Rico and U.S. territories and possessions (not included in total deposits):
a. Demand deposits of consolidated subsidiaries................................................... 2211 0 4.a.
b. Time and savings deposits (1) of consolidated subsidiaries..................................... 2351 0 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries........................... 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions
a. Demand deposits in insured branches (included in Schedule RC-E, Part II)....................... 2229 0 5.a.
b. Time and savings deposits (1) in insured branches (included in Schedule RC-E, Part II)......... 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches (included in
Schedule RC-G, item 1.b)....................................................................... 5515 0 5.c.
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on
behalf of its respondent depository institutions that are also reflected as deposit liabilities
of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, Item 4 or 5,
column B)...................................................................................... 2314 0 6.a.
b. Amount reflected in time and savings deposits (1) (included in Schedule RC-E, Part I,
item 4 or 5, column A or C, but not column B).................................................. 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1), (2)
a. Unamortized premiums........................................................................... 5516 36 7.a.
b. Unamortized discounts.......................................................................... 5517 0 7.b.
8. TO BE COMPLETED BY BANKS WITH "OAKAR DEPOSITS."
a. Deposits purchased or acquired from other FDIC-insured institutions during the quarter
(exclude deposits purchased or acquired from foreign offices other than insured branches
in Puerto Rico and U.S. territories and possessions):
(1) Total deposits purchased or acquired from other FDIC-insured institutions during
the quarter................................................................................ A531 0 8.a.(1)
(2) Amount of purchased or acquired deposits reported in item 8.a.(1) above attributable
to a secondary fund (i.e., BIF members report deposits attributable to SAIF; SAIF
members report deposits attributable to BIF)............................................... A532 0 8.a.(2)
b. Total deposits sold or transferred to other FDIC-insured institutions during the quarter
(exclude sales or transfers by the reporting bank of deposits in foreign offices other than
insured branches in Puerto Rico and U.S. territories and possessions).......................... A533 0 8.b.
</TABLE>
- -----------
(1) For FDIC insurance and FICO assessment purposes, "time and savings deposits"
consists of nontransaction accounts and all transaction accounts other than
demand deposits.
(2) Exclude core deposit intangibles.
31
<PAGE> 34
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999 FFIEC 031
Address: 41 S. High Street Page RC-22
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 9:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-O--CONTINUED
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9. Deposits in lifeline accounts.......................................... 5596 9.
10. Benefit-responsive "Depository Institution Investment
Contracts" (included in total deposits in domestic offices)............ 8432 0 10.
11. Adjustments to demand deposits in domestic offices and in
insured branches in Puerto Rico and U.S. territories and
possessions reported in Schedule RC-E for certain reciprocal
demand balances:
a. Amount by which demand deposits would be reduced if the
reporting bank's reciprocal demand balances with the
domestic offices of U.S. banks and savings associations
and insured branches in Puerto Rico and U.S. territories
and possessions that were reported on a gross basis in
Schedule RC-E had been reported on a net basis.................... 8785 0 11.a.
b. Amount by which demand deposits would be increased if the
reporting bank's reciprocal demand balances with foreign
banks and foreign offices of other U.S. banks (other than insured
branches in Puerto Rico and U.S. territories and possessions) that
were reported on a net basis in Schedule RC-E had been reported on a
gross basis....................................................... A181 0 11.b.
c. Amount by which demand deposits would be reduced if cash
items in process of collection were included in the
calculation of the reporting bank's net reciprocal demand
balances with the domestic offices of U.S. banks and
savings associations and insured branches in Puerto Rico
and U.S. territories and possessions in Schedule RC-E............. A182 0 11.c.
12. Amount of assets netted against deposit liabilities in domestic
offices and in insured branches in Puerto Rico and U.S.
territories and possessions on the balance sheet (Schedule RC)
in accordance with generally accepted accounting principles
(exclude amounts related to reciprocal demand balances):
a. Amount of assets netted against demand deposits................... A527 0 12.a.
b. Amount of assets netted against time and savings deposits......... A528 0 12.b.
</TABLE>
Memoranda (TO BE COMPLETED EACH QUARTER EXCEPT AS NOTED)
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total deposits in domestic offices of the bank
(sum of Memorandum items 1.a.(1) and 1.b.(1) must equal
Schedule RC, item 13.a):
a. Deposit accounts of $100,000 or less:
(1) Amount of deposit accounts of $100,000 or
less........................................................ 2702 13,014,275 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or
less (TO BE COMPLETED FOR THE JUNE REPORT Number
ONLY)..................................... RCON 3779 N/A M.1.a.(2)
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than
$100,000.................................................... 2710 5,979,285 M.1.b.(1)
(2) Number of deposit accounts of more than Number
$100,000.................................. RCON 2772 21,637 M.1.b.(2)
2. Estimated amount of uninsured deposits in domestic offices
of the bank:
a. an estimate of your bank's uninsured deposits can be
determined by multiplying the number of deposit accounts
of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the
amount of deposit accounts of more than $100,000 reported
in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your
bank has a method or procedure for determining a better
estimate of uninsured deposits than the estimate described YES NO
above............................................................ 6861 X M.2.a.
b. If the box marked YES has been checked, report the estimate
of uninsured deposits determined by using your bank's method RCON Bil Mil Thou
or procedure..................................................... 5597 N/A M.2.b.
3. Has the reporting institution been consolidated with a parent bank
or savings association in that parent bank's or parent savings
association's Call Report or Thrift Financial Report?
If so, report the legal title and FDIC Certificate Number of the
parent bank or parent savings association:
FDIC Cert No.
TEXT A545 N/A RCON A545 N/A M.3.
</TABLE>
32
<PAGE> 35
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-23
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
SCHEDULE RC-R--REGULATORY CAPITAL
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1998,
must complete items 2 through 9 and Memoranda items 1 and 2. BANKS WITH ASSETS
OF LESS THAN $1 BILLION MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR SCHEDULE RC-R
IN ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM 1 BELOW.
<TABLE>
<CAPTION>
<S><C>
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED. TO BE --------
COMPLETED ONLY BY BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION. Indicate in the C480 <-
appropriate box at the right whether the bank has total capital greater than or ------------------------
equal to eight percent of adjusted total assets.................................. YES NO
-----------------------------------------
RCFD 6056 1.
-----------------------------------------
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government
agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for
loan and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked
NO has been checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than
eight percent or that the bank is not in compliance with the risk-based capital guidelines.
</TABLE>
- ----------------------------------------------------------------
NOTE: ALL BANKS ARE REQUIRED TO COMPLETE ITEMS 2 AND 3 BELOW.
SEE OPTIONAL WORKSHEET FOR ITEMS 3.a through 3.f.
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------
Dollars Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Portion of qualifying limited-life capital instruments (original weighted
average maturity of at least five years) that is includible in Tier 2 capital:
a. Subordinated debt(1) and intermediate term preferred stock.................................. A515 690,000 2.a.
b. Other limited-life capital instruments...................................................... A516 0 2.b.
3. Amounts used in calculating regulatory capital ratios (report amounts determined by the bank
for its own internal regulatory capital analyses consistent with applicable capital standards):
a. (1) Tier 1 capital.......................................................................... 8274 1,573,668 3.a.(1)
(2) Tier 2 capital.......................................................................... 8275 980,975 3.a.(2)
(3) Tier 3 capital.......................................................................... 1395 0 3.a.(3)
b. Total risk-based capital.................................................................... 3792 2,554,644 3.b.
c. Excess allowances for loan and lease losses (amount that exceeds 1.25% of gross
risk-weighted assets)....................................................................... A222 0 3.c.
d. (1) Net risk-weighted assets (gross risk-weighted assets, INCLUDING MARKET RISK EQUIVALENT
ASSETS, less excess allowance reported in item 3.c above and all other deductions)...... A223 24,232,961 3.d.(1)
(2) Market risk equivalent assets (INCLUDED IN ITEM 3.d.(1) above).......................... 1651 0 3.d.(2)
e. Maximum contractual dollar amount of recourse exposure in low level
recourse transactions (to be completed only if the bank uses the "direct
reduction method" to report these transactions in Schedule RC-R)............................ 1727 0 3.e.
f. "Average total assets" (quarterly average reported in Schedule RC-K, item 9, less all
assets deducted from Tier 1 capital)(2).................................................... A224 27,725,154 3.f.
----------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------
(Column A) (Column B)
ITEMS 4-9 AND MEMORANDA ITEMS 1 AND 2 ARE TO BE COMPLETED Assets Credit Equiv-
BY BANKS THAT ANSWERED NO TO ITEM 1 ABOVE AND Recorded alent Amount
BY BANKS WITH TOTAL ASSETS OF $1 BILLION OR MORE. on the of Off-Balance
Balance Sheet Sheet Items(3)
---------------------------------------------------
<S> <C> <C>
4. Assets and credit equivalent amounts of off-balance sheet items RCFD Bil Mil Thou RCFD Bil Mil Thou
assigned to the Zero percent risk category: ---------------------------------------------------
a. Assets recorded on the balance sheet............................ 5163 1,424,444 4.a.
b. Credit equivalent amount of off-balance sheet items............. 3796 0 4.b.
---------------------------------------------------
</TABLE>
- ----------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
33
<PAGE> 36
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-24
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No. 0|6|5|6|0
---------
</TABLE>
SCHEDULE RC-R--CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items(1)
--------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items assigned
to the 20 percent risk category:
a. Assets recorded on the balance sheet................................. 5165 4,600,721 5.a.
b. Credit equivalent amount of off-balance sheet items.................. 3801 56,857 5.b.
6. Assets and credit equivalent amounts of the off-balance sheet items
assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet................................. 3802 2,085,615 6.a.
b. Credit equivalent amount of off-balance sheet items.................. 3803 74,592 6..b.
7. Assets and credit equivalent amounts of off-balance sheet items
assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet................................ 3804 19,940,942 7.a.
b. Credit equivalent amount of off-balance sheet time.................. 3805 2,280,401 7.b.
8. On-balance sheet asset values excluded from and deducted in the
calculation of the risk-based capital ratio(2)........................ 3806 652,102 8.
9. Total assets recorded on the balance sheet (sum of items 4.a.,5.a., 6.a.
7.a. and 8, column A) (must equal Schedule RC, item 12 plus items 4.b and
4.c.)..................................................................... 3807 28,703,824 9.
Memoranda
----------------------------- ----------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by the risk-
based capital standards....................................................................... 8764 78,744 M.1.
With a remaining maturity of
-------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
One year or less Over one year Over five years
through five years
-------------------------------------------------------------------------------------
2. Notional principal amounts of RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
off-balance sheet derivative ----------------------- ------------------------- -----------------------
contracts(3):
<S> <C> <C> <C> <C> <C> <C> <C>
a. Interest rate contracts...... 3809 1,025,666 8766 3,811,445 8767 1,436,280 M.2.a
b. Foreign exchange contracts... 3812 74,241 8769 34,650 8770 0 M.2.b.
c. Gold contracts............... 8771 0 8772 0 8773 0 M.2.c.
d. Other precious metals
contracts.................... 8774 0 8775 0 8776 0 M.2.d.
e. Other commodity contracts.... 8777 0 8778 0 8779 0 M.2.e.
f. Equity derivative contracts.. A000 0 A001 0 A002 0 M.2.f.
</TABLE>
- --------------------------
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale debt securities in item 8 and report the amortized cost
of these debt securities in items 4 through 7 above. Item 8 also includes
on-balance sheet asset values (or portions thereof) of off-balance sheet
interest rate, foreign exchange rate, and commodity contracts and those
contracts(e.g., futures contracts) not subject to risk-based capital.
Exclude from item 8 margin accounts and accrued receivables not included in
the calculation of credit equivalent amounts of off-balance sheet
derivatives as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or
less and all futures contracts.
34
<PAGE> 37
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 03/31/1999 FFIEC 031
Address: 41 S. High St. Page RC-25
City, State Zip: Columbus, OH 43287 Printed 04/29/1999 at 09:58
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on March 31, 1999
THE HUNTINGTON NATIONAL BANK COLUMBUS, OHIO
- ---------------------------- -------- -----------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief narrative
statement on the amounts reported in the Reports of Condition and Income. This
optional statement will be made available to the public, along with the publicly
available data in the Reports of Condition and Income, in response to any
request for individual bank report data. However, the information reported in
column A and in all of Memorandum item 1 of Schedule RC-N is regarded as
confidential and will not be released to the public. BANKS CHOOSING TO SUBMIT
THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES NOT CONTAIN THE
NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE
AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER
INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not to make a
statement may check the "No comment" box below and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in
this space such phrases as "No statement," "Not applicable," "N/A," "No
comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, indentation, and
standard spacing between words and sentences. If any submission should exceed
750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who thereby
attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release to
the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- --------------------------------------------------------------------------------
No comment /X/ (RCON 6979) C471 C472 <-
---------------
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
- -------------------------------------- -----------------
Signature of Executive Officer of Bank Date of Signature
35
<PAGE> 38
<TABLE>
<S> <C> <C>
Legal Title of Bank: The Huntington National Bank Call Date: 3/31/1999
Address: 41 S. High St. FFIEC 031
City, State Zip: Columbus, OH 43287
FDIC Certificate No.: |0|6|5|6|0|
-----------
</TABLE>
<TABLE>
<CAPTION>
<S><C>
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- ----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF BANK OMB No. For OCC: 1557-0081
OMB No. For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 3/31/2001
SPECIAL REPORT
(Dollar Amounts in Thousands)
-------------------------------------------------------------------------------
CLOSE OF BUSINESS FDIC Certificate Number
DATE C-700 <---
03/31/1999 |0|6|5|6|0|
- ----------------------------------------------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
- ----------------------------------------------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242 but does not constitute a part of the
Report of Condition. With each Report of Condition, these Laws require all banks to furnish a report of all
loans or other extensions of credit to their executive officers made SINCE THE DATE OF THE PREVIOUS REPORT
OF CONDITION. Data regarding individual loans or other extensions of credit are not required. If no such
loans or other extensions of credit were made during the period, insert "none" against subitem (a). (Exclude
the first $15,000 of indebtedness of each executive officer under bank credit card plan.) SEE SECTIONS
215.2 AND 215.3 OF TITLE 12 OF THE CODE OF FEDERAL REGULATIONS (FEDERAL RESERVE BOARD REGULATION O) FOR THE
DEFINITIONS OF "EXECUTIVE OFFICER" AND "EXTENSION OF CREDIT," RESPECTIVELY. EXCLUDE LOANS AND OTHER EXTENSIONS
OF CREDIT TO DIRECTORS AND PRINICIPAL SHAREHOLDERS WHO ARE NOT EXECUTIVE OFFICERS.
- ----------------------------------------------------------------------------------------------------------------------
a. Number of loans made to executive officers since the previous Call Report date ............... RCFD 3561 1 a.
b. Total dollar amount of above loans (in thousands of dollars) ................................. RCFD 3562 26 b.
c. Range of interest charged on above loans
(example: 9 3/4% = 9.75) .............................................. RCFD 7701 6.77 % to RCFD 7702 6.77 % c.
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT DATE (Month, Day, Year)
- ----------------------------------------------------------------------------------------------------------------------
FDIC 8040/53 (3-98)
</TABLE>
36
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FOR
TENDER OF
11% SENIOR NOTES DUE 2007
(CUSIP NOS. 92326YAE9 AND U92202AA5)
IN EXCHANGE FOR
11% SENIOR NOTES DUE 2007
(CUSIP NO. 92326YAF6)
VENTURE HOLDINGS COMPANY LLC
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING SENIOR NOTES TENDERED
IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Deliver to the Exchange Agent:
THE HUNTINGTON NATIONAL BANK
<TABLE>
<S> <C> <C>
By Mail, Overnight Courier
or Hand Delivery: By Facsimile: New York Drop Agent
---------------- ------------ -------------------
The Huntington National Bank The Huntington National Bank The Bank of New York
41 South High Street-HC1112 Attention: Corporate Trust Department 101 Barclay Street
Columbus, Ohio 43215 (614) 480-5223 New York, New York 10286
Attention: Corporate Trust Department (For Eligible Institutions Only)
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the Prospectus
dated ________, 1999 (the "Prospectus") of Venture Holdings Company LLC, a
Michigan limited liability company, as successor to Venture Holdings Trust (the
"Issuer"), and this Letter of Transmittal (the "Letter of Transmittal"), which
together describe the Issuer's offer (the "Exchange Offer") to exchange its 11%
Senior Notes due 2007 (the "Senior Exchange Notes"), which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), for a like
principal amount of its issued and outstanding 11% Senior Notes due 2007 (the
"Outstanding Senior Notes"), pursuant to a Registration Statement of which the
Prospectus is a part. Capitalized terms used but not defined herein have the
respective meaning given to them in the Prospectus.
The Issuer reserves the right, at any time or from time to time, to extend
the Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest time and date in which the Exchange Offer is extended. The
Issuer shall notify the Exchange Agent of any extension no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
This Letter of Transmittal is to be used by a Holder of Outstanding Senior
Notes either if original Outstanding Senior Notes are to be forwarded herewith
or if delivery of Outstanding Senior Notes, if available, is to be made by
book-entry
<PAGE> 2
transfer to the account maintained by the Exchange Agent at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer-Valid Tender."
Holders of Outstanding Senior Notes whose Outstanding Senior Notes are not
immediately available, or who are unable to deliver their Outstanding Senior
Notes and all other documents required by this Letter of Transmittal to the
Exchange Agent on or prior to the Expiration Date, or who are unable to complete
the procedure for book entry transfer on a timely basis, must tender their
Outstanding Senior Notes according to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer-Guaranteed
Delivery." See Instruction 1. Delivery of documents to the Book-Entry Transfer
Facility does not constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Outstanding Senior Notes are registered on the books of the Issuer or
any other person who has obtained a properly completed bond power from the
registered Holder. The undersigned has completed, executed and delivered this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer. Holders who wish to tender their Outstanding
Senior Notes must complete this Letter of Transmittal in its entirety.
The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Outstanding Senior Notes to which this Letter of Transmittal
relates. If the space below is inadequate, list the registered numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
DESCRIPTION OF OUTSTANDING SENIOR NOTES TENDERED
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) AGGREGATE AGGREGATE PRINCIPAL
EXACTLY AS NAME(S) APPEAR(S) ON OUTSTANDING SENIOR REGISTERED PRINCIPAL AMOUNT AMOUNT TENDERED**
NOTE NUMBER(S)* REPRESENTED BY
(PLEASE FILL IN, IF BLANK) NOTE(S)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
*Need not be completed by book-entry Holders.
**Unless otherwise indicated, any tendering Holder of Outstanding Senior Notes
will be deemed to have tendered the entire aggregate principal amount
represented by such Outstanding Senior Notes. All tenders must be in integral
multiples of $1,000.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
|_| CHECK HERE IF TENDERED OUTSTANDING SENIOR NOTES ARE ENCLOSED HEREWITH.
|_| CHECK HERE IF TENDERED OUTSTANDING SENIOR NOTES ARE BEING DELIVERED BY
BOOK ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING
(FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution:
---------------------------------------------
Account Number:
------------------------------------------------------------
Transaction Code Number:
---------------------------------------------------
|_| CHECK HERE IF TENDERED OUTSTANDING SENIOR NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND
COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s) of Outstanding Senior Notes:
-----------------
- ------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------------
Window Ticket Number (if available):
-----------------------------------------
Name of Eligible Institution that Guaranteed Delivery:
-----------------------
Account Number (if delivered by book-entry transfer):
-----------------------
|_| CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
------------------------------------------------------------------------
Address:
----------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of Senior
Exchange Notes. If the undersigned is a broker-dealer that will receive Senior
Exchange Notes for its own account in exchange for Outstanding Senior Notes, it
acknowledges that the Outstanding Senior Notes were acquired as a result of
market-making activities or other trading activities and that it will deliver a
prospectus in connection with any resale of such Senior Exchange Notes; however,
by so acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
3
<PAGE> 4
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Issuer for exchange the principal amount of Outstanding
Senior Notes indicated above. Subject to and effective upon the acceptance for
exchange of the principal amount of Outstanding Senior Notes tendered in
accordance with this Letter of Transmittal, the undersigned hereby exchanges,
assigns and transfers to the Issuer all right, title and interest in and to the
Outstanding Senior Notes tendered for exchange hereby. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent, the agent and
attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent
also acts as the agent of the Issuer in connection with the Exchange Offer) with
respect to the tendered Outstanding Senior Notes with full power of substitution
to (i) deliver such Outstanding Senior Notes, or transfer ownership of such
Outstanding Senior Notes on the account books maintained by the Book-Entry
Transfer Facility, to the Issuer and deliver all accompanying evidences of
transfer and authenticity, and (ii) present such Outstanding Senior Notes for
transfer on the books of the Issuer and receive all benefits and otherwise
exercise all rights of beneficial ownership of such Outstanding Senior Notes,
all in accordance with the terms of the Exchange Offer. The power of attorney
granted in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the
Outstanding Senior Notes tendered hereby and to acquire the Senior Exchange
Notes issuable upon the exchange of such tendered Outstanding Senior Notes, and
that the Issuer will acquire good and unencumbered title thereto, free and clear
of all liens, restrictions, charges and encumbrances and not subject to any
adverse claim, when the same are accepted for exchange by the Issuer.
The undersigned acknowledges that this Exchange Offer is being made on the
Issuer's belief, based upon interpretations contained in no-action letters
issued to third parties by the staff of the Securities and Exchange Commission
(the "Commission"), that the Senior Exchange Notes issued in exchange for the
Outstanding Senior Notes pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by Holders thereof (other than any such
Holder that is an "affiliate" of the Issuer within the meaning of Rule 405 under
the Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Senior Exchange
Notes are acquired in the ordinary course of such Holders' business and such
Holders are not engaging in and do not intend to engage in a distribution of the
Senior Exchange Notes and have no arrangement or understanding with any person
to participate in a distribution of such Senior Exchange Notes. The undersigned
hereby further represent(s) to the Company that (i) any Senior Exchange Notes
acquired in exchange for Outstanding Senior Notes tendered hereby are being
acquired in the ordinary course of business of the person receiving such Senior
Exchange Notes, (ii) the undersigned is not engaging in and does not intend to
engage in a distribution of the Senior Exchange Notes, (iii) the undersigned has
no arrangement or understanding with any person to participate in the
distribution of such Senior Exchange Notes, and (iv) the undersigned is not an
"affiliate," as defined in Rule 405 under the Securities Act, of the Issuer.
If the undersigned or the person receiving the Senior Exchange Notes is a
broker-dealer that is receiving Senior Exchange Notes for its own account in
exchange for Outstanding Senior Notes that were acquired as a result of
market-making activities or other trading activities, the undersigned
acknowledges that it or such other person will deliver a Prospectus in
connection with any resale of such Senior Exchange Notes; however, by so
acknowledging and by delivering a Prospectus, the undersigned will not be deemed
to admit that the undersigned or such other person is an "underwriter" within
the meaning of the Securities Act. The undersigned acknowledges that if the
undersigned is participating in the Exchange Offer for the purpose of
distributing the Senior Exchange Notes (i) the undersigned cannot rely on the
position of the staff of the Commission in certain no-action letters and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the Senior Exchange Notes, in which case the
registration statement must contain
4
<PAGE> 5
the information required by the Securities Act, and (ii) failure to comply with
such requirements in such instance could result in the undersigned incurring
liability under the Securities Act for which the undersigned is not indemnified
by the Issuer.
If the undersigned or the person receiving the Senior Exchange Notes is an
"affiliate" (as defined in Rule 405 under the Securities Act) of the Issuer, the
undersigned represents to the Issuer that the undersigned understands and
acknowledges that the Senior Exchange Notes may not be offered for resale,
resold or otherwise transferred by the undersigned or such other person without
registration under the Securities Act or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment and transfer of the Outstanding
Senior Notes tendered hereby, including the transfer of such Outstanding Senior
Notes on the account books maintained by the Book-Entry Transfer Facility.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted for exchange validly tendered Outstanding Senior Notes when, as and if
the Issuer gives oral or written notice thereof to the Exchange Agent. Any
tendered Outstanding Senior Notes that are not accepted for exchange pursuant to
the Exchange Offer for any reason will be returned, without expense, to the
undersigned at the address shown below or at a different address as may be
indicated herein under "Special Delivery Instructions" as promptly as
practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned acknowledges that the Issuer's acceptance of properly
tendered Outstanding Senior Notes pursuant to the procedures described under the
caption "The Exchange Offer - Valid Tender" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Issuer upon the terms and subject to the conditions of the Exchange
Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the Senior Exchange Notes issued in exchange for the Outstanding Senior
Notes accepted for exchange and return any Outstanding Senior Notes not tendered
or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail or deliver the
Senior Exchange Notes issued in exchange for the Outstanding Senior Notes
accepted for exchange and any Outstanding Senior Notes not tendered or not
exchanged (and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signatures. In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the Senior Exchange Notes issued in exchange for the
Outstanding Senior Notes accepted for exchange in the name(s) of, and return any
Outstanding Senior Notes not tendered or not exchanged to, the person(s) so
indicated. The undersigned recognizes that the Issuer has no obligation pursuant
to the "Special Issuance Instructions" and "Special Delivery Instructions" to
transfer any Outstanding Senior Notes from the name of the registered holder(s)
thereof if the Issuer does not accept for exchange any of the Outstanding Senior
Notes so tendered for exchange.
5
<PAGE> 6
SPECIAL ISSUANCE
INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Outstanding Senior Notes in a principal amount
not tendered, or Senior Exchange Notes issued in exchange for Outstanding Senior
Notes accepted for exchange, are to be issued in the name of someone other than
the undersigned, or (ii) if Outstanding Senior Notes tendered by book-entry
transfer which are not exchanged are to be returned for credit to an account
maintained at the Book-Entry Transfer Facility. Issue Senior Exchange Notes
and/or Outstanding Senior Notes to:
Name(s):
--------------------------------------------
(Please Type or Print)
Address:
--------------------------------------------
- -----------------------------------------------------
(Include Zip Code)
- -----------------------------------------------------
(Tax Identification or Social Security No.)
(Complete Substitute Form W-9)
|_| Credit unexchanged Outstanding Senior Notes delivered by book-entry transfer
to the Book-Entry Transfer Facility set forth below:
- -------------------------------------------------------------------------------
(Book-Entry Transfer Facility Account Number,
if applicable)
SPECIAL DELIVERY
INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY if Outstanding Senior Notes in a principal amount not
tendered, or Senior Exchange Notes issued in exchange for Outstanding Senior
Notes accepted for exchange, are to be mailed or delivered to someone other than
the undersigned, or to the undersigned at an address other than that shown below
the undersigned's signature.
Mail or deliver Senior Exchange Notes and/or Outstanding Senior Notes
to:
Name:
-----------------------------------------------
(Please Type or Print)
Address:
--------------------------------------------
- -----------------------------------------------------
(Include Zip Code)
- -----------------------------------------------------
(Tax Identification or Social Security No.)
6
<PAGE> 7
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING SENIOR NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
X
----------------------------------------------------------------------------
Date
X
----------------------------------------------------------------------------
Date
Area Code and Telephone Number:
----------------------------------------------
The above lines must be signed by the registered Holder(s) of Outstanding Senior
Notes as name(s) appear(s) on the Outstanding Senior Notes or on a security
position listing, or by person(s) authorized to become registered Holder(s) by a
properly completed bond power from the registered Holder(s), a copy of which
must be transmitted with this Letter of Transmittal. If Outstanding Senior Notes
to which this Letter of Transmittal relate are held of record by two or more
joint Holders, then all such Holders must sign this Letter of Transmittal. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, then such person must (i) set forth his or her full title below and
(ii) unless waived by the Issuer, submit evidence satisfactory to the Issuer of
such person's authority so to act. See Instruction 5 regarding the completion of
this Letter of Transmittal, printed below.
Name(s):
---------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Please Type or Print)
Capacity:
--------------------------------------------------------------------
Address:
---------------------------------------------------------------------
(Include Zip Code)
MEDALLION SIGNATURE GUARANTEE (If
Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an Eligible Institution:
--------------------------
(Authorized Signature)
- ------------------------------------------------------------------------------
(Title)
- ------------------------------------------------------------------------------
(Name of Firm)
- ------------------------------------------------------------------------------
(Address, Include Zip Code)
- ------------------------------------------------------------------------------
(Area Code and Telephone Number)
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Outstanding Senior Notes or
Book-Entry Confirmations. All physically delivered Outstanding Senior Notes or
any confirmation of a book-entry transfer to the Exchange Agent's account at the
Book-Entry Transfer Facility of Outstanding Senior Notes tendered by book-entry
transfer (a "Book-Entry Confirmation"), as well as a properly completed and duly
executed copy of this Letter of Transmittal or facsimile hereof, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date. The method of delivery of the tendered Outstanding
Senior Notes, this Letter of Transmittal and all other required documents to the
Exchange Agent is at the election and risk of the Holder and, except as
otherwise provided below, the delivery will be deemed made only when actually
received or confirmed by the Exchange Agent. Instead of delivery by mail, it is
recommended that the Holder use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure delivery to the Exchange
Agent before the Expiration Date. No Letter of Transmittal or Outstanding Senior
Notes should be sent to the Issuer.
2. Guaranteed Delivery Procedures. Holders who wish to tender their
Outstanding Senior Notes and (a) whose Outstanding Senior Notes are not
immediately available, or (b) who cannot deliver their Outstanding Senior Notes,
this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date or (c) who are unable to complete
the procedure for book-entry transfer on a timely basis, must tender their
Outstanding Senior Notes according to the guaranteed delivery procedures set
forth in the Prospectus. Pursuant to such procedures: (i) such tender must be
made by or through a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers Inc. or a
commercial bank or a trust company having an office or correspondent in the
United States (an "Eligible Institution"); (ii) the Holder must deliver a
properly completed and signed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) to the Exchange Agent on or prior to the
Expiration Date, setting forth the name and address of the Holder of the
Outstanding Senior Notes, the registration number(s) of such Outstanding Senior
Notes and the principal amount of Outstanding Senior Notes tendered; and (iii)
the Holder must deliver the certificates for all physically tendered shares of
Outstanding Senior Notes, in proper form for transfer, or Book-Entry
Confirmation, as the case may be, this Letter of Transmittal and all other
documents required by this Letter to the Exchange Agent within three (3) New
York Stock Exchange trading days after the Notice of Guaranteed Delivery is
executed.
Any Holder of Outstanding Senior Notes who wishes to tender Outstanding
Senior Notes pursuant to the guaranteed delivery procedures described above must
ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior
to 5:00 p.m., New York City time, on the Expiration Date. Upon request of the
Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish
to tender their Outstanding Senior Notes according to the guaranteed delivery
procedures set forth above.
See "The Exchange Offer - Guaranteed Delivery" section of the Prospectus.
3. Tender by Holder. Only a Holder of Outstanding Senior Notes may tender
such Outstanding Senior Notes in the Exchange Offer. Any beneficial Holder of
Outstanding Senior Notes who is not the registered Holder and who wishes to
tender should arrange with the registered Holder to execute and deliver this
Letter of Transmittal on his behalf or must, prior to completing and executing
this Letter of Transmittal and delivering his Outstanding Senior Notes, either
make appropriate arrangements to register ownership of the Outstanding Senior
Notes in such Holder's name or obtain a properly completed bond power from the
registered Holder.
4. Partial Tenders. Tenders of Outstanding Senior Notes will be accepted
only in integral multiples of $1,000. If less than the entire principal amount
of any Outstanding Senior Notes is tendered, the tendering Holder should fill in
the
8
<PAGE> 9
principal amount tendered in the fourth column, entitled "Principal Amount
Tendered," of the box entitled "Description of Outstanding Senior Notes
Tendered" above. The entire principal amount of Outstanding Senior Notes
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of all Outstanding Senior
Notes is not tendered, then Outstanding Senior Notes for the principal amount of
Outstanding Senior Notes not tendered and Senior Exchange Notes issued in
exchange for any Outstanding Senior Notes accepted will be sent to the Holder at
his or her registered address, unless a different address is provided in the
appropriate box on this Letter of Transmittal, promptly after the Outstanding
Senior Notes are accepted for exchange.
5. Signatures on This Letter of Transmittal; Bond Powers and Endorsements;
Medallion Guarantee of Signatures. If this Letter of Transmittal (or facsimile
hereof) is signed by the record Holder(s) of the Outstanding Senior Notes
tendered hereby, the signature must correspond with the name(s) as written on
the face of the Outstanding Senior Notes without alteration, enlargement or any
change whatsoever. If this Letter of Transmittal is signed by a participant in
the Book-Entry Transfer Facility, the signature must correspond with the name as
it appears on the security position listing as the Holder of the Outstanding
Senior Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Outstanding Senior Notes listed and tendered
hereby and the Senior Exchange Notes issued in exchange therefor are to be
issued (or any untendered principal amount of Outstanding Senior Notes is to be
reissued) to the registered Holder, the said Holder need not and should not
endorse any tendered Outstanding Senior Notes, nor provide a separate bond
power. In any other case, such Holder must either properly endorse the
Outstanding Senior Notes tendered or transmit a properly completed separate bond
power with this Letter of Transmittal, with the signatures on the endorsement or
bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Outstanding Senior Notes
listed, such Outstanding Senior Notes must be endorsed or accompanied by
appropriate bond powers, in each case signed as the name of the registered
Holder or Holders appears on the Outstanding Senior Notes.
If this Letter of Transmittal (or facsimile hereof) or any Outstanding
Senior Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, or officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and, unless waived by the Issuer, evidence satisfactory to the Issuer
of their authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Outstanding Senior Notes or signatures on bond powers
required by this Instruction 5 must be guaranteed by an Eligible Institution.
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered holder(s) of the Outstanding Senior Notes tendered
herewith (or by a participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of the tendered Outstanding
Senior Notes) and the issuance of Senior Exchange Notes (and any Outstanding
Senior Notes not tendered or not accepted) are to be issued directly to such
registered holder(s) (or, if signed by a participant in the Book-Entry Transfer
Facility, any Senior Exchange Notes or Outstanding Senior Notes not tendered or
not accepted are to be deposited to such participant's account at such
Book-Entry Transfer Facility) and neither the box entitled "Special Delivery
Instructions" nor the box entitled "Special Issuance Instructions" has been
completed, or (ii) such Outstanding Senior Notes are tendered for the account of
an Eligible Institution. In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution.
6. Special Registration and Delivery Instructions. Tendering holders should
indicate, in the applicable box or boxes, the name and address (or account at
the Book-Entry Transfer Facility) to which Senior Exchange Notes or substitute
Outstanding Senior Notes for principal amounts not tendered or not accepted for
exchange are to be issued or sent, if different from the name and address of the
person signing this Letter of Transmittal. In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
9
<PAGE> 10
7. Transfer Taxes. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Senior Notes pursuant to the Exchange
Offer. If, however, Senior Exchange Notes or Outstanding Senior Notes for
principal amounts not tendered or accepted for exchange are to be delivered to,
or are to be registered or issued in the name of, any person other than the
registered Holder of the Outstanding Senior Notes tendered hereby, or if
tendered Outstanding Senior Notes are registered in the name of any person other
than the person signing this Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Outstanding Senior Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other persons) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering Holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OUTSTANDING SENIOR NOTES LISTED IN THIS
LETTER OF TRANSMITTAL.
8. Tax Identification Number. Federal income tax law requires that a holder
of any Outstanding Senior Notes which are accepted for exchange must provide the
Issuer (as payor) with its correct taxpayer identification number ("TIN"),
which, in the case of a Holder who is an individual is his or her social
security number. If the Issuer is not provided with the correct TIN, the Holder
may be subject to a $50 penalty imposed by Internal Revenue Service. (If
withholding results in an over-payment of taxes, a refund may be obtained.)
Certain holders (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
To prevent backup withholding, each tendering Holder must provide such
Holder's correct TIN by completing the Substitute Form W-9 set forth herein,
certifying that the TIN provided is correct (or that such Holder is awaiting a
TIN), and that (i) the Holder has not been notified by the Internal Revenue
Service that such Holder is subject to backup withholding as a result of failure
to report all interest or dividends or (ii) the Internal Revenue Service has
notified the Holder that such Holder is no longer subject to backup withholding.
If the Outstanding Senior Notes are registered in more than one name or are not
in the name of the actual owner, see the enclosed "Guidelines for Certification
of Taxpayer Identification Number of Substitute Form W-9" for information on
which TIN to report.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligation regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form, eligibility
(including time of receipt), and acceptance of tendered Outstanding Senior Notes
will be determined by the Issuer, in its sole discretion, which determination
will be final and binding. The Issuer reserves the right to reject any and all
Outstanding Senior Notes not validly tendered or any Outstanding Senior Notes,
the Issuer's acceptance of which would, in the opinion of the Issuer or its
counsel, be unlawful. The Issuer also reserves the right to waive any conditions
of the Exchange Offer or defects or irregularities in tenders of Outstanding
Senior Notes as to any ineligibility of any Holder who seeks to tender
Outstanding Senior Notes in the Exchange Offer. The interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) by the Issuer shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Outstanding Senior Notes must be cured within such time as the Issuer shall
determine. The Issuer will use reasonable efforts to give notification of
defects or irregularities with respect to tenders of Outstanding Senior Notes,
but shall not incur any liability for failure to give such notification.
10. Waiver of Conditions. The Issuer reserves the absolute right to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth in
the Prospectus.
11. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Outstanding Senior Notes or
10
<PAGE> 11
transmittal of this Letter of Transmittal will be accepted.
12. Mutilated, Lost, Stolen or Destroyed Outstanding Senior Notes. Any
Holder whose Outstanding Senior Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
13. Requests for Assistance or Additional Copies. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
14. Acceptance of Tendered Outstanding Senior Notes and issuance of Senior
Exchange Notes; Return of Outstanding Senior Notes. Subject to the terms and
conditions of the Exchange Offer, the Issuer will accept for exchange all
validly tendered Outstanding Senior Notes as soon as practicable after the
Exchange Date and will issue Senior Exchange Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Issuer shall be
deemed to have accepted tendered Outstanding Senior Notes when, as and if the
Issuer has given written and oral notice thereof to the Exchange Agent. If any
tendered Outstanding Senior Notes are not exchanged pursuant to the Exchange
Offer for any reason, such unexchanged Outstanding Senior Notes will be
returned, without expense, to the undersigned at the address shown above (or
credited to the undersigned's account at the Book-Entry Transfer Facility
designated above) or at a different address as may be indicated under the box
entitled "Special Delivery Instructions."
15. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer - Withdrawal Rights."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF
(TOGETHER WITH THE OUTSTANDING SENIOR NOTES (WHICH MUST BE DELIVERED BY
BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM)) OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
11
<PAGE> 12
(TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 5))
PAYOR'S NAME: VENTURE HOLDINGS COMPANY LLC
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE PART I-TAXPAYER IDENTIFICATION NUMBER PART II-For Payees Exempt From
FORM W-9 For all accounts, enter your Backup Withholding, (see enclosed
taxpayer identification number in Guidelines)
PAYER'S REQUEST FOR the appropriate box. For most indi-
TAXPAYER IDENTIFICATION viduals and sole proprietors, this is
NUMBER your social security number. For
other entities, it is your Employer
DEPARTMENT OF THE TREASURY, Identification Number. If you do not
INTERNAL REVENUE SERVICE have a number, see How to Obtain a
TIN in the enclosed Guidelines.
Note: If the account is in more than
one name, see the chart on page 2 of
the enclosed Guidelines to deter-
mine what number to enter.
-------------------------------------------
Social Security or Employer Identification
Number
</TABLE>
CERTIFICATION - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and either (a) I have
mailed or delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in the
near future. I understand that if I do not provide a taxpayer identification
number within sixty (60) days, 31 % of all reportable payments made to me
thereafter will be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt
from backup withholding, or (b) I have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding; and
(3) Any other information provided on this form is true, correct and
complete.
SIGNATURE ______________________________________ DATE _____________, 1999
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE
SENIOR EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
W-9 FOR ADDITIONAL DETAILS.
12
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF
11% SENIOR NOTES DUE 2007
(CUSIP NOS. 92326YAE9 AND U92202AA5)
IN EXCHANGE FOR
11% SENIOR NOTES DUE 2007
(CUSIP NO. 92326YAF6)
VENTURE HOLDINGS COMPANY LLC
This form or one substantially equivalent hereto must be used by a
holder, to accept the Exchange Offer of Venture Holdings Company LLC, a Michigan
limited liability company, as successor to Venture Holdings Trust (the
"Issuer"), who wishes to tender 11% Senior Notes due 2007 (the "Outstanding
Senior Notes") to the Exchange Agent pursuant to the guaranteed delivery
procedures described in "The Exchange Offer -- Guaranteed Delivery" of the
Issuer's Prospectus dated ________, 1999 (the "Prospectus") and in Instruction 2
to the related Letter of Transmittal. Any holder who wishes to tender
Outstanding Senior Notes pursuant to such guaranteed delivery procedures must
ensure that the Exchange Agent receives this Notice of Guaranteed Delivery prior
to the Expiration Date (as defined below) of the Exchange Offer. Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING SENIOR NOTES TENDERED
IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
THE HUNTINGTON NATIONAL BANK
<TABLE>
<CAPTION>
By Mail, Overnight Courier
or Hand Delivery: By Fascimile: New York Drop Agent
----------------- ------------- -------------------
<S> <C> <C>
The Huntington National Bank The Hunington National Bank The Bank of New York
41 South High Street-HC1112 Attention: Corporate Trust Department 101 Barclay Street
Columbus, Ohio 43215 (614) 480-5223 New York, New York 10286
Attention: Corporate Trust Department (For Eligible Institutions Only)
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF
A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE BOX ON THE LETTER OF
TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Outstanding Senior Notes set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus and in Instruction 2 of the Letter of
Transmittal.
The undersigned hereby tenders the Outstanding Senior Notes listed below:
<TABLE>
<CAPTION>
<S><C>
AGGREGATE
CERTIFICATE NUMBERS(S) (IF KNOWN) OF OUTSTANDING PRINCIPAL AMOUNT AGGREGATE
SENIOR NOTES OR ACCOUNT NUMBER AT THE REPRESENTED PRINCIPAL
BOOK-ENTRY FACILITY BY NOTE AMOUNT TENDERED
- ------------------------------------------------ ---------------- ---------------
PLEASE SIGN AND COMPLETE
Signatures of Registered Holder(s) or Date:
Authorized Signatory: ----------------------------------------------------------------
--------------------------------------- Address:
-------------------------------------------------------------
- ------------------------------------------------------------ Area Code and Telephone No.
------------------------------------------
- ------------------------------------------------------------
Name(s) of Registered Holder(s):
---------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Outstanding Senior Notes or on a
security position listing as the owner of Outstanding Senior Notes, or by
person(s) authorized to become Holder(s) by endorsements and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must
provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Capacity:
----------------------------------------------------------------------
Address(es):
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 3
GUARANTEE
(Not To Be Used for Signature Guarantee)
The undersigned, a firm which is a member of a registered national
Securities Exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondence in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934,
guarantees deposit with the Exchange Agent of the Letter of Transmittal (or
facsimile thereof), together with the Outstanding Senior Notes tendered hereby
in proper form for transfer (or confirmation of the book-entry transfer of such
Outstanding Senior Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility described in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery" and in the Letter of Transmittal and any other
required documents, all by 5:00 p.m., New York City time, within three (3) New
York Stock Exchange trading days following the date hereof.
Name of Firm:
-------------------------------------------------------
Address:
------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-------------------------------------
Authorized Signature:
-----------------------------------------------
Name:
---------------------------------------------------------------
Title:
--------------------------------------------------------------
(Please Type or Print)
Date: , 1999
--------------------------------
DO NOT SEND OUTSTANDING SENIOR NOTES WITH THIS FORM. ACTUAL SURRENDER OF
OUTSTANDING SENIOR NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY A
PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other documents
required by this Notice of Guaranteed Delivery must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. The method
of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Outstanding
Senior Notes referred to herein, the signature must correspond with the name(s)
written on the face of the Outstanding Senior Notes without alteration,
enlargement, or any change whatsoever. If this Notice of Guaranteed Delivery is
signed by a participant of the Book-Entry Transfer Facility whose name appears
on
<PAGE> 4
a security position listing as the owner of the Outstanding Senior Notes, the
signature must correspond with the name shown on the security position listing
as the owner of the Outstanding Senior Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Outstanding Senior Notes listed or a participant of
the Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be
accompanied by appropriate bond powers, signed as the name of the registered
holder(s) appears on the Outstanding Senior Notes or signed as the name of the
participant shown on the Book-Entry Transfer Facility's security position
listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Issuer of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Prospectus may be directed
to the Exchange Agent at the address specified in the Prospectus. Holders may
also contact their broker, dealer, commercial bank, trust company, or other
nominee for assistance concerning the Exchange Offer.
<PAGE> 1
EXHIBIT 99.3
LETTER OF TRANSMITTAL
FOR
TENDER OF
12% SENIOR SUBORDINATED NOTES DUE 2009
(CUSIP NOS. 92326YAG4 AND U92202AB3)
IN EXCHANGE FOR
12% SENIOR SUBORDINATED NOTES DUE 2009
(CUSIP NO. 92326YAH2)
VENTURE HOLDINGS COMPANY LLC
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING SENIOR SUBORDINATED
NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
Deliver to the Exchange Agent:
THE HUNTINGTON NATIONAL BANK
<TABLE>
<S> <C> <C>
By Mail, Overnight Courier
or Hand Delivery: By Facsimile: New York Drop Agent
----------------- ------------- -------------------
The Huntington National Bank The Huntington National Bank The Bank of New York Bank
41 South High Street-HC1112 Attention: Corporate Trust Department 101 Barclay Street
Columbus, Ohio 43215 (614) 480-5223 New York, New York 10286
Attention: Corporate Trust Department (For Eligible Institutions Only)
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the Prospectus
dated ________, 1999 (the "Prospectus") of Venture Holdings Company LLC, a
Michigan limited liability company, as successor to Venture Holdings Trust (the
"Issuer"), and this Letter of Transmittal (the "Letter of Transmittal"), which
together describe the Issuer's offer (the "Exchange Offer") to exchange its 12%
Senior Subordinated Notes due 2009 (the "Senior Subordinated Exchange Notes"),
which have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of its issued and outstanding 12%
Senior Subordinated Notes due 2009 (the "Outstanding Senior Subordinated
Notes"), pursuant to a Registration Statement of which the Prospectus is a part.
Capitalized terms used but not defined herein have the respective meaning given
to them in the Prospectus.
The Issuer reserves the right, at any time or from time to time, to extend
the Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest time and date in which the Exchange Offer is extended. The
Issuer shall notify the Exchange Agent of any extension no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
This Letter of Transmittal is to be used by a Holder of Outstanding Senior
Subordinated Notes either if original Outstanding Senior Subordinated Notes are
to be forwarded herewith or if delivery of Outstanding Senior Subordinated
<PAGE> 2
Notes, if available, is to be made by book-entry transfer to the account
maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in the
Prospectus under the caption "The Exchange Offer-Valid Tender." Holders of
Outstanding Senior Subordinated Notes whose Outstanding Senior Subordinated
Notes are not immediately available, or who are unable to deliver their
Outstanding Senior Subordinated Notes and all other documents required by this
Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date,
or who are unable to complete the procedure for book entry transfer on a timely
basis, must tender their Outstanding Senior Subordinated Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer-Guaranteed Delivery." See Instruction 1. Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Outstanding Senior Subordinated Notes are registered on the books of
the Issuer or any other person who has obtained a properly completed bond power
from the registered Holder. The undersigned has completed, executed and
delivered this Letter of Transmittal to indicate the action the undersigned
desires to take with respect to the Exchange Offer. Holders who wish to tender
their Outstanding Senior Subordinated Notes must complete this Letter of
Transmittal in its entirety.
The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Outstanding Senior Subordinated Notes to which this Letter of
Transmittal relates. If the space below is inadequate, list the registered
numbers and principal amounts on a separate signed schedule and affix the list
to this Letter of Transmittal.
DESCRIPTION OF OUTSTANDING SENIOR SUBORDINATED NOTES TENDERED
-------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) AGGREGATE AGGREGATE PRINCIPAL
EXACTLY AS NAME(S) APPEAR(S) ON OUTSTANDING SENIOR REGISTERED PRINCIPAL AMOUNT AMOUNT TENDERED**
SUBORDINATED NOTE NUMBER(S)* REPRESENTED BY
(PLEASE FILL IN, IF BLANK) NOTE(S)
<S> <C> <C> <C>
TOTAL
</TABLE>
*Need not be completed by book-entry Holders.
**Unless otherwise indicated, any tendering Holder of Outstanding Senior
Subordinated Notes will be deemed to have tendered the entire aggregate
principal amount represented by such Outstanding Senior Subordinated Notes. All
tenders must be in integral multiples of $1,000.
2
<PAGE> 3
| | CHECK HERE IF TENDERED OUTSTANDING SENIOR SUBORDINATED NOTES ARE ENCLOSED
HEREWITH.
| | CHECK HERE IF TENDERED OUTSTANDING SENIOR SUBORDINATED NOTES ARE BEING
DELIVERED BY BOOK ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution:
--------------------------------------------------
Account Number:
-----------------------------------------------------------------
Transaction Code Number:
--------------------------------------------------------
| | CHECK HERE IF TENDERED OUTSTANDING SENIOR SUBORDINATED NOTES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH
AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s) of Outstanding Senior Subordinated
Notes:
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------
Window Ticket Number (if available):
--------------------------------------------
Name of Eligible Institution that Guaranteed Delivery:
-------------------------
Account Number (if delivered by book-entry transfer):
--------------------------
| | CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
Senior Subordinated Exchange Notes. If the undersigned is a broker-dealer that
will receive Senior Subordinated Exchange Notes for its own account in exchange
for Outstanding Senior Subordinated Notes, it acknowledges that the Outstanding
Senior Subordinated Notes were acquired as a result of market-making activities
or other trading activities and that it will deliver a prospectus in connection
with any resale of such Senior Subordinated Exchange Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
3
<PAGE> 4
Subject to the terms and conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuer for exchange the principal amount of
Outstanding Senior Subordinated Notes indicated above. Subject to and effective
upon the acceptance for exchange of the principal amount of Outstanding Senior
Subordinated Notes tendered in accordance with this Letter of Transmittal, the
undersigned hereby exchanges, assigns and transfers to the Issuer all right,
title and interest in and to the Outstanding Senior Subordinated Notes tendered
for exchange hereby. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent, the agent and attorney-in-fact of the undersigned (with full
knowledge that the Exchange Agent also acts as the agent of the Issuer in
connection with the Exchange Offer) with respect to the tendered Outstanding
Senior Subordinated Notes with full power of substitution to (i) deliver such
Outstanding Senior Subordinated Notes, or transfer ownership of such Outstanding
Senior Subordinated Notes on the account books maintained by the Book-Entry
Transfer Facility, to the Issuer and deliver all accompanying evidences of
transfer and authenticity, and (ii) present such Outstanding Senior Subordinated
Notes for transfer on the books of the Issuer and receive all benefits and
otherwise exercise all rights of beneficial ownership of such Outstanding Senior
Subordinated Notes, all in accordance with the terms of the Exchange Offer. The
power of attorney granted in this paragraph shall be deemed to be irrevocable
and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the
Outstanding Senior Subordinated Notes tendered hereby and to acquire the Senior
Subordinated Exchange Notes issuable upon the exchange of such tendered
Outstanding Senior Subordinated Notes, and that the Issuer will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by the Issuer.
The undersigned acknowledges that this Exchange Offer is being made on
the Issuer's belief, based upon interpretations contained in no-action letters
issued to third parties by the staff of the Securities and Exchange Commission
(the "Commission"), that the Senior Subordinated Exchange Notes issued in
exchange for the Outstanding Senior Subordinated Notes pursuant to the Exchange
Offer may be offered for resale, resold and otherwise transferred by Holders
thereof (other than any such Holder that is an "affiliate" of the Issuer within
the meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Senior Subordinated Exchange Notes are acquired in the ordinary course
of such Holders' business and such Holders are not engaging in and do not intend
to engage in a distribution of the Senior Subordinated Exchange Notes and have
no arrangement or understanding with any person to participate in a distribution
of such Senior Subordinated Exchange Notes. The undersigned hereby further
represent(s) to the Company that (i) any Senior Subordinated Exchange Notes
acquired in exchange for Outstanding Senior Subordinated Notes tendered hereby
are being acquired in the ordinary course of business of the person receiving
such Senior Subordinated Exchange Notes, (ii) the undersigned is not engaging in
and does not intend to engage in a distribution of the Senior Subordinated
Exchange Notes, (iii) the undersigned has no arrangement or understanding with
any person to participate in the distribution of such Senior Subordinated
Exchange Notes, and (iv) the undersigned is not an "affiliate," as defined in
Rule 405 under the Securities Act, of the Issuer.
If the undersigned or the person receiving the Senior Subordinated
Exchange Notes is a broker-dealer that is receiving Senior Subordinated Exchange
Notes for its own account in exchange for Outstanding Senior Subordinated Notes
that were acquired as a result of market-making activities or other trading
activities, the undersigned acknowledges that it or such other person will
deliver a Prospectus in connection with any resale of such Senior Subordinated
Exchange Notes; however, by so acknowledging and by delivering a Prospectus, the
undersigned will not be deemed to admit that the undersigned or such other
person is an "underwriter" within the meaning of the Securities Act. The
undersigned acknowledges that if the undersigned is participating in the
Exchange Offer for the purpose of distributing the Senior Subordinated Exchange
Notes (i) the undersigned cannot rely on the position of the staff of the
Commission in certain no-action letters and, in the absence of an exemption
therefrom, must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the Senior Subordinated Exchange Notes, in which case the
registration statement must contain the information required by the Securities
Act, and (ii) failure to comply with such requirements in such instance could
result in the undersigned incurring liability under the Securities Act for which
the undersigned is not indemnified by the Issuer.
If the undersigned or the person receiving the Senior Subordinated
Exchange Notes is an "affiliate" (as defined in Rule 405 under the Securities
Act) of the Issuer, the undersigned represents to the Issuer that the
undersigned understands
4
<PAGE> 5
and acknowledges that the Senior Subordinated Exchange Notes may not be offered
for resale, resold or otherwise transferred by the undersigned or such other
person without registration under the Securities Act or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment and transfer of the Outstanding
Senior Subordinated Notes tendered hereby, including the transfer of such
Outstanding Senior Subordinated Notes on the account books maintained by the
Book-Entry Transfer Facility.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted for exchange validly tendered Outstanding Senior Subordinated Notes
when, as and if the Issuer gives oral or written notice thereof to the Exchange
Agent. Any tendered Outstanding Senior Subordinated Notes that are not accepted
for exchange pursuant to the Exchange Offer for any reason will be returned,
without expense, to the undersigned at the address shown below or at a different
address as may be indicated herein under "Special Delivery Instructions" as
promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned acknowledges that the Issuer's acceptance of properly
tendered Outstanding Senior Subordinated Notes pursuant to the procedures
described under the caption "The Exchange Offer - Valid Tender" in the
Prospectus and in the instructions hereto will constitute a binding agreement
between the undersigned and the Issuer upon the terms and subject to the
conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the Senior Subordinated Exchange Notes issued in exchange for the
Outstanding Senior Subordinated Notes accepted for exchange and return any
Outstanding Senior Subordinated Notes not tendered or not exchanged, in the
name(s) of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail or deliver the Senior Subordinated Exchange
Notes issued in exchange for the Outstanding Senior Subordinated Notes accepted
for exchange and any Outstanding Senior Subordinated Notes not tendered or not
exchanged (and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signatures. In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the Senior Subordinated Exchange Notes issued in
exchange for the Outstanding Senior Subordinated Notes accepted for exchange in
the name(s) of, and return any Outstanding Senior Subordinated Notes not
tendered or not exchanged to, the person(s) so indicated. The undersigned
recognizes that the Issuer has no obligation pursuant to the "Special Issuance
Instructions" and "Special Delivery Instructions" to transfer any Outstanding
Senior Subordinated Notes from the name of the registered holder(s) thereof if
the Issuer does not accept for exchange any of the Outstanding Senior
Subordinated Notes so tendered for exchange.
5
<PAGE> 6
SPECIAL ISSUANCE
INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Outstanding Senior Subordinated Notes in a
principal amount not tendered, or Senior Subordinated Exchange Notes issued in
exchange for Outstanding Senior Subordinated Notes accepted for exchange, are to
be issued in the name of someone other than the undersigned, or (ii) if
Outstanding Senior Subordinated Notes tendered by book-entry transfer which are
not exchanged are to be returned for credit to an account maintained at the
Book-Entry Transfer Facility. Issue Senior Subordinated Exchange Notes and/or
Outstanding Senior Subordinated Notes to:
Name(s):
--------------------------------------------
(Please Type or Print)
Address:
---------------------------------------------
- -----------------------------------------------------
(Include Zip Code)
- -----------------------------------------------------
(Tax Identification or Social Security No.)
(Complete Substitute Form W-9)
| | Credit unexchanged Outstanding Senior Subordinated Notes delivered by
book-entry transfer to the Book-Entry Transfer Facility set forth below:
- -----------------------------------------------------
(Book-Entry Transfer Facility Account Number,
if applicable)
SPECIAL DELIVERY
INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY if Outstanding Senior Subordinated Notes in a
principal amount not tendered, or Senior Subordinated Exchange Notes issued in
exchange for Outstanding Senior Subordinated Notes accepted for exchange, are to
be mailed or delivered to someone other than the undersigned, or to the
undersigned at an address other than that shown below the undersigned's
signature.
Mail or deliver Senior Subordinated
Exchange Notes and/or Outstanding
Senior Subordinated Notes to:
Name:
---------------------------------------
(Please Type or Print)
Address:
------------------------------------
- --------------------------------------------
(Include Zip Code)
- --------------------------------------------
(Tax Identification or Social Security
No.)
6
<PAGE> 7
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING SENIOR SUBORDINATED NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9)
X
------------------------------------------------------------------------------
Date
X
------------------------------------------------------------------------------
Date
Area Code and Telephone Number:
------------------------------------------------
The above lines must be signed by the registered Holder(s) of Outstanding Senior
Subordinated Notes as name(s) appear(s) on the Outstanding Senior Subordinated
Notes or on a security position listing, or by person(s) authorized to become
registered Holder(s) by a properly completed bond power from the registered
Holder(s), a copy of which must be transmitted with this Letter of Transmittal.
If Outstanding Senior Subordinated Notes to which this Letter of Transmittal
relate are held of record by two or more joint Holders, then all such Holders
must sign this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, then such person must
(i) set forth his or her full title below and (ii) unless waived by the Issuer,
submit evidence satisfactory to the Issuer of such person's authority so to act.
See Instruction 5 regarding the completion of this Letter of Transmittal,
printed below.
Name(s):
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please Type or Print)
Capacity:
----------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
(Include Zip Code)
MEDALLION SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an Eligible Institution:
----------------------------
(Authorized Signature)
- -------------------------------------------------------------------------------
(Title)
- -------------------------------------------------------------------------------
(Name of Firm)
- -------------------------------------------------------------------------------
(Address, Include Zip Code)
- -------------------------------------------------------------------------------
(Area Code and Telephone Number)
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Outstanding Senior
Subordinated Notes or Book-Entry Confirmations. All physically delivered
Outstanding Senior Subordinated Notes or any confirmation of a book-entry
transfer to the Exchange Agent's account at the Book-Entry Transfer Facility of
Outstanding Senior Subordinated Notes tendered by book-entry transfer (a
"Book-Entry Confirmation"), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. The method of delivery of the tendered Outstanding Senior
Subordinated Notes, this Letter of Transmittal and all other required documents
to the Exchange Agent is at the election and risk of the Holder and, except as
otherwise provided below, the delivery will be deemed made only when actually
received or confirmed by the Exchange Agent. Instead of delivery by mail, it is
recommended that the Holder use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure delivery to the Exchange
Agent before the Expiration Date. No Letter of Transmittal or Outstanding Senior
Subordinated Notes should be sent to the Issuer.
2. Guaranteed Delivery Procedures. Holders who wish to tender their
Outstanding Senior Subordinated Notes and (a) whose Outstanding Senior
Subordinated Notes are not immediately available, or (b) who cannot deliver
their Outstanding Senior Subordinated Notes, this Letter of Transmittal or any
other documents required hereby to the Exchange Agent prior to the Expiration
Date or (c) who are unable to complete the procedure for book-entry transfer on
a timely basis, must tender their Outstanding Senior Subordinated Notes
according to the guaranteed delivery procedures set forth in the Prospectus.
Pursuant to such procedures: (i) such tender must be made by or through a firm
which is a member of a registered national securities exchange or of the
National Association of Securities Dealers Inc. or a commercial bank or a trust
company having an office or correspondent in the United States (an "Eligible
Institution"); (ii) the Holder must deliver a properly completed and signed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
to the Exchange Agent on or prior to the Expiration Date, setting forth the name
and address of the Holder of the Outstanding Senior Subordinated Notes, the
registration number(s) of such Outstanding Senior Subordinated Notes and the
principal amount of Outstanding Senior Subordinated Notes tendered; and (iii)
the Holder must deliver the certificates for all physically tendered shares of
Outstanding Senior Subordinated Notes, in proper form for transfer, or
Book-Entry Confirmation, as the case may be, this Letter of Transmittal, and all
other documents required by this Letter to the Exchange Agent within three (3)
New York Stock Exchange trading days after the Notice of Guaranteed Delivery is
executed.
Any Holder of Outstanding Senior Subordinated Notes who wishes to tender
Outstanding Senior Subordinated Notes pursuant to the guaranteed delivery
procedures described above must ensure that the Exchange Agent receives the
Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the
Expiration Date. Upon request of the Exchange Agent, a Notice of Guaranteed
Delivery will be sent to Holders who wish to tender their Outstanding Senior
Subordinated Notes according to the guaranteed delivery procedures set forth
above.
See "The Exchange Offer - Guaranteed Delivery" section of the Prospectus.
3. Tender by Holder. Only a Holder of Outstanding Senior Subordinated
Notes may tender such Outstanding Senior Subordinated Notes in the Exchange
Offer. Any beneficial Holder of Outstanding Senior Subordinated Notes who is not
the registered Holder and who wishes to tender should arrange with the
registered Holder to execute and deliver this Letter of Transmittal on his
behalf or must, prior to completing and executing this Letter of Transmittal and
delivering his Outstanding Senior Subordinated Notes, either make appropriate
arrangements to register ownership of the Outstanding Senior Subordinated Notes
in such Holder's name or obtain a properly completed bond power from the
registered Holder.
4. Partial Tenders. Tenders of Outstanding Senior Subordinated Notes will
be accepted only in integral multiples of $1,000. If less than the entire
principal amount of any Outstanding Senior Subordinated Notes is tendered, the
tendering Holder should fill in the principal amount tendered in the fourth
column, entitled "Principal Amount Tendered," of the box entitled "Description
of Outstanding Senior Subordinated Notes Tendered" above. The entire principal
amount of Outstanding Senior Subordinated Notes delivered to the Exchange Agent
will be deemed to have been tendered unless
8
<PAGE> 9
otherwise indicated. If the entire principal amount of all Outstanding Senior
Subordinated Notes is not tendered, then Outstanding Senior Subordinated Notes
for the principal amount of Outstanding Senior Subordinated Notes not tendered
and Senior Subordinated Exchange Notes issued in exchange for any Outstanding
Senior Subordinated Notes accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, promptly after the Outstanding Senior
Subordinated Notes are accepted for exchange.
5. Signatures on This Letter of Transmittal; Bond Powers and
Endorsements; Medallion Guarantee of Signatures. If this Letter of Transmittal
(or facsimile hereof) is signed by the record Holder(s) of the Outstanding
Senior Subordinated Notes tendered hereby, the signature must correspond with
the name(s) as written on the face of the Outstanding Senior Subordinated Notes
without alteration, enlargement or any change whatsoever. If this Letter of
Transmittal is signed by a participant in the Book-Entry Transfer Facility, the
signature must correspond with the name as it appears on the security position
listing as the Holder of the Outstanding Senior Subordinated Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Outstanding Senior Subordinated Notes listed and
tendered hereby and the Senior Subordinated Exchange Notes issued in exchange
therefor are to be issued (or any untendered principal amount of Outstanding
Senior Subordinated Notes are to be reissued) to the registered Holder, the said
Holder need not and should not endorse any tendered Outstanding Senior
Subordinated Notes, nor provide a separate bond power. In any other case, such
Holder must either properly endorse the Outstanding Senior Subordinated Notes
tendered or transmit a properly completed separate bond power with this Letter
of Transmittal, with the signatures on the endorsement or bond power guaranteed
by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Outstanding Senior
Subordinated Notes listed, such Outstanding Senior Subordinated Notes must be
endorsed or accompanied by appropriate bond powers, in each case signed as the
name of the registered Holder or Holders appears on the Outstanding Senior
Subordinated Notes.
If this Letter of Transmittal (or facsimile hereof) or any Outstanding
Senior Subordinated Notes or bond powers are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, or officers of corporations or
others acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Issuer, evidence satisfactory
to the Issuer of their authority so to act must be submitted with this Letter of
Transmittal.
Endorsements on Outstanding Senior Subordinated Notes or signatures on bond
powers required by this Instruction 5 must be guaranteed by an Eligible
Institution.
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered holder(s) of the Outstanding Senior Subordinated Notes
tendered herewith (or by a participant in the Book-Entry Transfer Facility whose
name appears on a security position listing as the owner of the tendered
Outstanding Senior Subordinated Notes) and the issuance of Senior Subordinated
Exchange Notes (and any Outstanding Senior Subordinated Notes not tendered or
not accepted) are to be issued directly to such registered holder(s) (or, if
signed by a participant in the Book-Entry Transfer Facility, any Senior
Subordinated Exchange Notes or Outstanding Senior Subordinated Notes not
tendered or not accepted are to be deposited to such participant's account at
such Book-Entry Transfer Facility) and neither the box entitled "Special
Delivery Instructions" nor the box entitled "Special Issuance Instructions" has
been completed, or (ii) such Outstanding Senior Subordinated Notes are tendered
for the account of an Eligible Institution. In all other cases, all signatures
on this Letter of Transmittal must be guaranteed by an Eligible Institution.
6. Special Registration and Delivery Instructions. Tendering holders
should indicate, in the applicable box or boxes, the name and address (or
account at the Book-Entry Transfer Facility) to which Senior Subordinated
Exchange Notes or substitute Outstanding Senior Subordinated Notes for principal
amounts not tendered or not accepted for exchange are to be issued or sent, if
different from the name and address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the taxpayer
identification or social security number of the person named must also be
indicated.
7. Transfer Taxes. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Senior Subordinated Notes pursuant to
the Exchange Offer. If, however, Senior Subordinated Exchange Notes or
Outstanding Senior
9
<PAGE> 10
Subordinated Notes for principal amounts not tendered or accepted for exchange
are to be delivered to, or are to be registered or issued in the name of, any
person other than the registered Holder of the Outstanding Senior Subordinated
Notes tendered hereby, or if tendered Outstanding Senior Subordinated Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Outstanding Senior Subordinated Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered Holder or any other persons) will be payable by the tendering Holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with this Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering Holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OUTSTANDING SENIOR SUBORDINATED NOTES
LISTED IN THIS LETTER OF TRANSMITTAL.
8. Tax Identification Number. Federal income tax law requires that a
holder of any Outstanding Senior Subordinated Notes which are accepted for
exchange must provide the Issuer (as payor) with its correct taxpayer
identification number ("TIN"), which, in the case of a Holder who is an
individual is his or her social security number. If the Issuer is not provided
with the correct TIN, the Holder may be subject to a $50 penalty imposed by
Internal Revenue Service. (If withholding results in an over-payment of taxes, a
refund may be obtained.) Certain holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
To prevent backup withholding, each tendering Holder must provide such
Holder's correct TIN by completing the Substitute Form W-9 set forth herein,
certifying that the TIN provided is correct (or that such Holder is awaiting a
TIN), and that (i) the Holder has not been notified by the Internal Revenue
Service that such Holder is subject to backup withholding as a result of failure
to report all interest or dividends or (ii) the Internal Revenue Service has
notified the Holder that such Holder is no longer subject to backup withholding.
If the Outstanding Senior Subordinated Notes are registered in more than one
name or are not in the name of the actual owner, see the enclosed "Guidelines
for Certification of Taxpayer Identification Number of Substitute Form W-9" for
information on which TIN to report.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligation regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form,
eligibility (including time of receipt), and acceptance of tendered Outstanding
Senior Subordinated Notes will be determined by the Issuer, in its sole
discretion, which determination will be final and binding. The Issuer reserves
the right to reject any and all Outstanding Senior Subordinated Notes not
validly tendered or any Outstanding Senior Subordinated Notes, the Issuer's
acceptance of which would, in the opinion of the Issuer or its counsel, be
unlawful. The Issuer also reserves the right to waive any conditions of the
Exchange Offer or defects or irregularities in tenders of Outstanding Senior
Subordinated Notes as to any ineligibility of any Holder who seeks to tender
Outstanding Senior Subordinated Notes in the Exchange Offer. The interpretation
of the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by the Issuer shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Outstanding Senior Subordinated Notes must be cured
within such time as the Issuer shall determine. The Issuer will use reasonable
efforts to give notification of defects or irregularities with respect to
tenders of Outstanding Senior Subordinated Notes, but shall not incur any
liability for failure to give such notification.
10. Waiver of Conditions. The Issuer reserves the absolute right to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth in
the Prospectus.
11. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Outstanding Senior Subordinated Notes or transmittal of
this Letter of Transmittal will be accepted.
12. Mutilated, Lost, Stolen or Destroyed Outstanding Senior Subordinated
Notes. Any Holder whose Outstanding Senior Subordinated Notes have been
mutilated, lost, stolen or destroyed should contact the Exchange Agent at the
address indicated
10
<PAGE> 11
above for further instructions.
13. Requests for Assistance or Additional Copies. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
14. Acceptance of Tendered Outstanding Senior Subordinated Notes and
issuance of Senior Subordinated Exchange Notes; Return of Outstanding Senior
Subordinated Notes. Subject to the terms and conditions of the Exchange Offer,
the Issuer will accept for exchange all validly tendered Outstanding Senior
Subordinated Notes as soon as practicable after the Exchange Date and will issue
Senior Subordinated Exchange Notes therefor as soon as practicable thereafter.
For purposes of the Exchange Offer, the Issuer shall be deemed to have accepted
tendered Outstanding Senior Subordinated Notes when, as and if the Issuer has
given written and oral notice thereof to the Exchange Agent. If any tendered
Outstanding Senior Subordinated Notes are not exchanged pursuant to the Exchange
Offer for any reason, such unexchanged Outstanding Senior Subordinated Notes
will be returned, without expense, to the undersigned at the address shown above
(or credited to the undersigned's account at the Book-Entry Transfer Facility
designated above) or at a different address as may be indicated under the box
entitled "Special Delivery Instructions."
15. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer - Withdrawal Rights."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF
(TOGETHER WITH THE OUTSTANDING SENIOR SUBORDINATED NOTES (WHICH MUST BE
DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM)) OR THE NOTICE
OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE
EXPIRATION DATE.
11
<PAGE> 12
(TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 5))
PAYOR'S NAME: VENTURE HOLDINGS COMPANY LLC
<TABLE>
<S> <C> <C>
SUBSTITUTE Part I-Taxpayer Identification Number Part II-For Payees Exempt From
FORM W-9 For all accounts, enter your Backup Withholding, (see enclosed
taxpayer identification number in Guidelines)
Payer's Request for the appropriate box. For most indi-
Taxpayer Identification viduals and sole proprietors, this is
Number your social security number. For
other entities, it is your Employer
Department of the Treasury, Identification Number. If you do not
Internal Revenue Service have a number, see How to Obtain a
TIN in the enclosed Guidelines.
Note: If the account is in more than
one name, see the chart on page 2 of
the enclosed Guidelines to deter-
mine what number to enter.
----------------------------------------------------------------------------------
Social Security or Employer Identification Number
</TABLE>
Certification - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and either (a) I have
mailed or delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in the
near future. I understand that if I do not provide a taxpayer identification
number within sixty (60) days, 31 % of all reportable payments made to me
thereafter will be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am
exempt from backup withholding, or (b) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding; and
(3) Any other information provided on this form is true, correct and
complete.
SIGNATURE DATE , 1999
--------------------------------- ------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE
SENIOR SUBORDINATED EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
12
<PAGE> 1
EXHIBIT 99.4
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF
12% SENIOR SUBORDINATED NOTES DUE 2009
(CUSIP NOS. 92326YAG4 AND U92202AB3)
IN EXCHANGE FOR
12% SENIOR SUBORDINATED NOTES DUE 2009
(CUSIP NO. 92326YAH2)
VENTURE HOLDINGS COMPANY LLC
This form or one substantially equivalent hereto must be used by a
holder, to accept the Exchange Offer of Venture Holdings Company LLC, a Michigan
limited liability company, as successor to Venture Holdings Trust (the
"Issuer"), who wishes to tender 12% Senior Subordinated Notes due 2009 (the
"Outstanding Senior Subordinated Notes") to the Exchange Agent pursuant to the
guaranteed delivery procedures described in "The Exchange Offer --Guaranteed
Delivery" of the Issuer's Prospectus dated ________, 1999 (the "Prospectus") and
in Instruction 2 to the related Letter of Transmittal. Any holder who wishes to
tender Outstanding Senior Subordinated Notes pursuant to such guaranteed
delivery procedures must ensure that the Exchange Agent receives this Notice of
Guaranteed Delivery prior to the Expiration Date (as defined below) of the
Exchange Offer. Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING SENIOR SUBORDINATED
NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
THE HUNTINGTON NATIONAL BANK
<TABLE>
<CAPTION>
By Mail, Overnight Courier
or Hand Delivery: By Facsimile: New York Drop Agent
-------------------------- ------------ -------------------
<S> <C> <C>
The Huntington National Bank The Hunington National Bank The Bank of New York
41 South High Street-HC1112 Attention: Corporate Trust Department 101 Barclay Street
Columbus, Ohio 43215 (614) 480-5223 New York, New York 10286
Attention: Corporate Trust Department (For Eligible Institutions Only)
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DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF
A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE BOX ON THE LETTER OF
TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
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Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Outstanding Senior Subordinated Notes set forth below pursuant to the guaranteed
delivery procedures set forth in the Prospectus and in Instruction 2 of the
Letter of Transmittal.
The undersigned hereby tenders the Outstanding Senior Subordinated Notes
listed below:
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AGGREGATE
CERTIFICATE NUMBERS(S) (IF KNOWN) OF OUTSTANDING PRINCIPAL AMOUNT AGGREGATE
SENIOR SUBORDINATED NOTES OR ACCOUNT NUMBER REPRESENTED PRINCIPAL
AT THE BOOK-ENTRY FACILITY BY NOTE AMOUNT TENDERED
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PLEASE SIGN AND COMPLETE
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Signatures of Registered Holder(s) or Date:
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Authorized Signatory:
------------------------------- Address:
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- ----------------------------------------------------- Area Code and Telephone No.
Name(s) of Registered Holder(s): ---------------------------
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This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Outstanding Senior Subordinated
Notes or on a security position listing as the owner of Outstanding Senior
Subordinated Notes, or by person(s) authorized to become Holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
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Capacity:
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Address(es):
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GUARANTEE
(Not To Be Used for Signature Guarantee)
The undersigned, a firm which is a member of a registered national
Securities Exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondence in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934,
guarantees deposit with the Exchange Agent of the Letter of Transmittal (or
facsimile thereof), together with the Outstanding Senior Subordinated Notes
tendered hereby in proper form for transfer (or confirmation of the book-entry
transfer of such Outstanding Senior Subordinated Notes into the Exchange Agent's
account at the Book-Entry Transfer Facility described in the Prospectus under
the caption "The Exchange Offer -- Guaranteed Delivery" and in the Letter of
Transmittal and any other required documents, all by 5:00 p.m., New York City
time, within three (3) New York Stock Exchange trading days following the date
hereof.
Name of Firm:
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Address:
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(Include Zip Code)
Area Code and Telephone Number:
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Authorized Signature:
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Name:
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Title:
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(Please Type or Print)
Date: , 1999
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DO NOT SEND OUTSTANDING SENIOR SUBORDINATED NOTES WITH THIS FORM. ACTUAL
SURRENDER OF OUTSTANDING SENIOR SUBORDINATED NOTES MUST BE MADE PURSUANT TO,
AND BE ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other documents
required by this Notice of Guaranteed Delivery must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. The method
of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Outstanding
Senior Subordinated Notes referred to herein, the signature must correspond with
the name(s) written on the face of the Outstanding Senior Subordinated Notes
without alteration, enlargement, or any change whatsoever. If this Notice of
Guaranteed Delivery is signed by a participant of the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of the
Outstanding Senior Subordinated Notes, the
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signature must correspond with the name shown on the security position listing
as the owner of the Outstanding Senior Subordinated Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Outstanding Senior Subordinated Notes listed or a
participant of the Book-Entry Transfer Facility, this Notice of Guaranteed
Delivery must be accompanied by appropriate bond powers, signed as the name of
the registered holder(s) appears on the Outstanding Senior Subordinated Notes or
signed as the name of the participant shown on the Book-Entry Transfer
Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Issuer of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Prospectus may be directed
to the Exchange Agent at the address specified in the Prospectus. Holders may
also contact their broker, dealer, commercial bank, trust company, or other
nominee for assistance concerning the Exchange Offer.
