-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cn48y17MGnhTzofDjfQlpgHf040bAI9BeBE5xgfNXG3d9NSqTzU5zlB19NzyDpro CuwBllE2ZV7IPhYt4UYTcw== 0000950124-97-004480.txt : 19970826 0000950124-97-004480.hdr.sgml : 19970826 ACCESSION NUMBER: 0000950124-97-004480 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19970825 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAYES WHEELS INTERNATIONAL INC CENTRAL INDEX KEY: 0000893670 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 133384636 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319 FILM NUMBER: 97669390 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTOR WHEEL CORP CENTRAL INDEX KEY: 0000810745 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 381741793 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-01 FILM NUMBER: 97669391 BUSINESS ADDRESS: STREET 1: 2501 WOODLAKE C CITY: OKEMOS STATE: MI ZIP: 48864-5955 BUSINESS PHONE: 5173375700 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAYES WHEELS INTERNATIONAL CALIFORNIA INC CENTRAL INDEX KEY: 0001044898 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-02 FILM NUMBER: 97669392 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAYES WHEELS INTERNATIONAL GEORGIA INC CENTRAL INDEX KEY: 0001044899 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-03 FILM NUMBER: 97669393 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAYES WHEELS INTERNATIONAL INDIANA INC CENTRAL INDEX KEY: 0001044900 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-04 FILM NUMBER: 97669394 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAYES WHEELS INTERNATIONAL MEXICO INC CENTRAL INDEX KEY: 0001044902 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-05 FILM NUMBER: 97669395 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAYES WHEELS INTERNATIONAL MICHIGAN INC CENTRAL INDEX KEY: 0001044903 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-06 FILM NUMBER: 97669396 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MWC ACQUISITION SUB INC CENTRAL INDEX KEY: 0001044921 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-34319-07 FILM NUMBER: 97669397 BUSINESS ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: ROMULUS STATE: MI ZIP: 48174 BUSINESS PHONE: 3139412000 MAIL ADDRESS: STREET 1: 38481 HURON RIVER DR CITY: RONULUS STATE: MI ZIP: 48174 S-4 1 FORM S-4 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1997 REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ HAYES WHEELS INTERNATIONAL, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 13-3384636 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- CALIFORNIA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 33-0042337 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 14500 FIRESTONE BLVD., LA MIRADA, CALIFORNIA, (714) 994-0150 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- GEORGIA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3312 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 58-2046122 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 1215 PALMOUR DRIVE, GAINESVILLE, GEORGIA 30501, (770) 535-6783 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- INDIANA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 62-1240825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 1870 RIVERFORK DRIVE, HUNTINGTON, INDIANA 46750, (219) 356-7001 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- MEXICO, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-3281831 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ HAYES WHEELS INTERNATIONAL -- MICHIGAN, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MICHIGAN (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-1799246 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 2440 HIGHLAND ROAD, HOWELL, MICHIGAN 48843, (517) 546-3441 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ MOTOR WHEEL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) OHIO (STATE OF INCORPORATION) 3714 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-1741793 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ MWC ACQUISITION SUB, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OF INCORPORATION) 3599 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 38-3086380 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ DANIEL M. SANDBERG, ESQ. VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY HAYES WHEELS INTERNATIONAL, INC. 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPY TO: ROBERT B. PINCUS, ESQ. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP ONE RODNEY SQUARE, WILMINGTON, DELAWARE 19801, (302) 651-3000 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the Registration Statement becomes effective. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
================================================================================================================================= PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED PER SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE(1) - --------------------------------------------------------------------------------------------------------------------------------- 9 1/8% Series B Senior Subordinated Notes Due 2007........................................ $250,000,000 100% $250,000,000 $ 75,757.57 - --------------------------------------------------------------------------------------------------------------------------------- 9 1/8% Series B Senior Subordinated Notes Due 2007........................................ $150,000,000 100% $150,000,000 $ 45,454.54 - --------------------------------------------------------------------------------------------------------------------------------- Guarantees of the 9 1/8% Series B Subordinated Notes Due 2007(2).............. -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total..................................... $400,000,000 100% $400,000,000 $121,212.11 =================================================================================================================================
(1) Determined in accordance with Rule 457(f) promulgated under the Securities Act of 1933, as amended. (2) No separate consideration will be received for the Guarantees, and, therefore, no additional registration fee is required. ------------------------ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ 2 HAYES WHEELS INTERNATIONAL, INC. FORM S-4 CROSS-REFERENCE SHEET
ITEM NUMBER AND CAPTION HEADING IN PROSPECTUS ----------------------- --------------------- A. INFORMATION ABOUT THE TRANSACTION 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus.... Registration Statement Cover; Outside Front Cover Page of Prospectus 2. Inside Front and Outside Back Cover Pages of Prospectus................................ Inside Front and Outside Back Cover Pages of Prospectus; Incorporation of Certain Documents by Reference; Available Information 3. Risk Factors, Combined Ratio of Earnings to Fixed Charges and Other Information....... Prospectus Summary; Risk Factors 4. Terms of the Transaction.................... Prospectus Summary; The Exchange Offer; Description of the Notes; Certain Federal Income Tax Considerations 5. Pro Forma Financial Information............. Prospectus Summary 6. Material Contacts With the Company Being Acquired.................................. * 7. Additional Information Required For Reoffering by Persons and Parties Deemed to be Underwriters........................ * 8. Interests of Named Experts and Counsel...... Legal Matters; Experts 9. Disclosure of Commission Position on Indemnification For Securities Act Liabilities............................... * B. INFORMATION ABOUT THE REGISTRANT 10. Information with Respect to S-3 Registrants............................... Incorporation of Certain Documents by Reference; Prospectus Summary 11. Incorporation of Certain Information by Reference................................. Incorporation of Certain Documents by Reference; Available Information 12. Information with Respect to S-2 or S-3 Registrants............................... * 13. Incorporation of Certain Information by Reference................................. * 14. Information With Respect to Registrants Other Than S-3 or S-2 Registrants......... * C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED 15. Information With Respect to S-3 Companies... * 16. Information with Respect to S-2 or S-3 Companies................................. * 17. Information With Respect to Companies Other Than S-2 or S-3 Companies................. * D. VOTING AND MANAGEMENT INFORMATION 18. Information of Proxies, Consents or Authorizations Are to be Solicited........ * 19. Information if Proxies, Consents or Authorizations Are Not to be Solicited, or in an Exchange Offer...................... Incorporation of Certain Documents by Reference; Available Information
- --------------------------- * Omitted as inapplicable. 3 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. SUBJECT TO COMPLETION, DATED AUGUST 25, 1997 PROSPECTUS [HAYES WHEELS INTERNATIONAL, INC. LOGO] OFFER FOR ALL OUTSTANDING 9 1/8% SENIOR SUBORDINATED NOTES DUE 2007 IN EXCHANGE FOR 9 1/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 OF HAYES WHEELS INTERNATIONAL, INC. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED Hayes Wheels International, Inc., a Delaware corporation (the "Company"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (which together constitute the "Exchange Offer"), to exchange an aggregate principal amount of up to (i) $250,000,000 outstanding 9 1/8% Series B Senior Subordinated Notes due 2007 (the "New June Notes") of the Company for a like principal amount of the issued and outstanding 9 1/8% Senior Subordinated Notes due 2007 that were issued by the Company in an offering under Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), which closed June 30, 1997 (the "Old June Notes"), and (ii) $150,000,000 outstanding 9 1/8% Series B Senior Subordinated Notes due 2007 (the "New July Notes" and, collectively with the New June Notes, the "New Notes") for a like principal amount of the issued and outstanding 9 1/8% Senior Subordinated Notes due 2007 that were issued by the Company in an offering under Rule 144A of the Securities Act which closed July 22, 1997 (the "Old July Notes" and, collectively with the Old June Notes, the "Old Notes"), from the respective holders thereof (the "Holders"). The terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes do not include transfer restrictions, registration rights and Additional Interest (as defined herein) provisions included in the Old Notes. As used in this Prospectus, unless the context requires otherwise, references to the "Notes" refer to the Old Notes and the New Notes, references to the "June Notes" refer to the Old June Notes and the New June Notes, and references to the "July Notes" refer to the Old July Notes and the New July Notes. The Old Notes are, and the New Notes will be, general unsecured obligations of the Company, subordinated in right of payment to all existing and future Senior Indebtedness (as defined herein) of the Company. The Old Notes are, and the New Notes will be, unconditionally guaranteed, on an unsecured senior subordinated basis, as to payment of principal, premium, if any, and interest, jointly, and severally, by certain of the Company's material domestic subsidiaries (the "Guarantors"). As of April 30, 1997, after giving effect to the consummation of the Lemmerz Transactions (as defined herein), the Company and the Guarantors would have had approximately $322.7 million of Senior Indebtedness outstanding. Interest on the New June Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old June Notes surrendered in exchange therefor or, (ii) if the Old June Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old June Notes, from June 30, 1997. Interest on the New July Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old July Notes surrendered in exchange therefor or, (ii) if the Old July Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old July Notes, from July 22, 1997. (continued on page 2) SEE "RISK FACTORS" ON PAGE 15 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN RISKS TO BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD NOTES IN THE EXCHANGE OFFER. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is , 1997. 4 (Continued from front cover page) The New Notes are being offered hereunder in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement dated as of June 30, 1997, by and among the Company, the Guarantors and CIBC Woody Gundy Securities Corp. ("CIBC"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc., Morgan Stanley & Co. Inc. and Salomon Brothers Inc (collectively, the "Initial Purchasers of the Old June Notes"), and the Registration Rights Agreement dated as of July 22, 1997, by and among the Company, the Guarantors, CIBC and Merrill Lynch (the "Initial Purchasers of the Old July Notes" and, together with the Initial Purchasers of the Old June Notes, the "Initial Purchasers"). Based on interpretations by the staff of the Securities and Exchange Commission (the "Commission"), as set forth in no-action letters issued to third parties, the Company believes that the New Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act ), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holders' business and such Holders have no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of such New Notes. The Company, however, does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each Holder, other than a broker-dealer, must acknowledge that it is not engaged in, does not intend to engage in, and has no arrangement or understanding with any person to participate in, the distribution of New Notes. If any Holder is an affiliate of the Company, is engaged in or intends to engage in or has any arrangement with any person to participate in the distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of the New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." The Company will not receive any proceeds from the Exchange Offer. The Company will pay all of the expenses incident to the Exchange Offer. Tenders of Old Notes pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. If the Company terminates the Exchange Offer and does not accept for exchange any Old Notes, the Company will promptly return Old Notes to the Holders thereof. See "The Exchange Offer." The Old Notes are eligible for trading in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") market. Prior to the Exchange Offer, there has been no public market for the Old Notes or New Notes. Although the Initial Purchasers have informed the Company that they intend to make a market in the New Notes, they are not obligated to do so and any such market making may be discontinued at any time without notice. If a market for the New Notes should develop, the New Notes could trade at a discount from their principal value. The Company does not currently intend to list the New Notes on any securities exchange or to seek approval for quotations through any automated quotation systems. There can be no assurance that a market for the New Notes will develop. Until (90 days after the date of this Prospectus), dealers affecting transactions in the New Notes, whether or not participating in the Exchange Offer, may be required to deliver a Prospectus. This obligation is in addition to the obligation of dealers to deliver a Prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. 5 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company incorporates by reference herein the following documents filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"): I. The Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1997; II. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 1997; III. The Company's Current Reports on Form 8-K dated June 6, 1997, June 20, 1997, June 30, 1997 and July 16, 1997; IV. The Company's Proxy Statement for the 1997 Annual Meeting of Stockholders, dated September , 1997; and V. The Company's Registration Statement on Form S-3, File No. 333-31669, as amended. All documents and reports filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the Exchange Offer, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the dates of filing of such documents or reports. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Each Guarantor is a wholly owned, direct or indirect, subsidiary of the Company. The Guarantors have fully and unconditionally guaranteed the Notes on a joint and several basis. No separate financial statements of the Guarantors have been included or incorporated by reference herein because management of the Company and each Guarantor has determined that such information is not material to investors. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST, WHICH SHOULD BE DIRECTED TO HAYES WHEELS INTERNATIONAL, INC., 38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, ATTENTION: DIRECTOR OF INVESTOR RELATIONS, TELEPHONE (313) 942-8716. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LESS THAN FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER. ------------------------ AVAILABLE INFORMATION The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the Commission. The reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and are available at the Commission's Regional Offices at Seven World Trade Center, 13th Floor, New York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of such materials may be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a Web site at http://www.sec.gov that contains reports, proxy statements and other information. While any Notes remain outstanding, the Company will make available, upon request, to any holder and any prospective purchaser of the Notes the information required by Rule 144A(d)(4) under the Securities Act during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act. Any such requests should be mailed to Hayes Wheels International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174, Attention: Director of Investor Relations, telephone (313) 942-8716. The Company and the Guarantors have filed with the Commission a registration statement on Form S-4 (the "Registration Statement") (of which this Prospectus is a part) under the Securities Act for registration of the New Notes offered hereby. This Prospectus does not contain all the information set forth in the 2 6 Registration Statement and the exhibits thereto, certain parts of which are omitted in accordance with the Rules and Regulations of the Commission. Reference is hereby made to the Registration Statement and related exhibits for further information with respect to the Company and the securities offered hereby. For information with respect to the Company and the securities offered by this Prospectus, reference is made to the Registration Statement and the exhibits filed or incorporated as a part thereof, which are on file at the offices of the Commission and may be obtained upon payment of the fee prescribed by the Commission, or may be examined without charge at the offices of the Commission. Statements contained in this Prospectus, or in any document incorporated in this Prospectus by reference, as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement or such other document, each such statement being qualified in all respects by such reference. ------------------------ THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS FROM THE LEMMERZ ACQUISITION (AS DEFINED HEREIN) CANNOT BE FULLY REALIZED; (2) COMPETITIVE PRESSURE IN THE COMPANY'S INDUSTRY INCREASES SIGNIFICANTLY; (3) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE BUSINESSES OF THE COMPANY ARE GREATER THAN EXPECTED; AND (4) GENERAL ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN EXPECTED. FURTHER INFORMATION ON OTHER FACTORS WHICH COULD AFFECT THE FINANCIAL RESULTS OF THE COMPANY AND SUCH FORWARD LOOKING STATEMENTS IS INCLUDED IN THE SECTION HEREIN ENTITLED "RISK FACTORS" AND IN THE ANNUAL REPORT ON FORM 10-K, THE QUARTERLY REPORT ON FORM 10-Q AND THE CURRENT REPORTS ON FORM 8-K, OF THE COMPANY, INCORPORATED HEREIN BY REFERENCE. ------------------------ Unless otherwise indicated, financial information in this Prospectus with respect to Lemmerz (as defined herein) is expressed in dollars or in Deutsche Mark ("marks" or "DM"). Amounts stated in dollars, unless otherwise indicated, have been translated from marks in accordance with GAAP (as defined herein) and should not be construed as representations that the mark amounts actually represent such dollar amounts or could have been converted into dollars at the rate indicated. Assets and liabilities denominated in marks are translated at the rate of exchange in effect on the balance sheet date and income and expenses are translated at the average rates of exchange prevailing during the year. 3 7 PROSPECTUS SUMMARY The following is a summary of certain information contained elsewhere in this Prospectus or in the documents incorporated herein by reference. Reference is made to, and this summary is qualified in its entirety by, the more detailed information contained elsewhere in this Prospectus or in the documents incorporated herein by reference. All references to fiscal years of the Company in this Prospectus or in the documents incorporated herein by reference refer to years commencing on February 1 of such year and ending January 31 of the following year. Unless the context otherwise requires, the term the "Company" refers to Hayes Wheels International, Inc. and its subsidiaries on a combined basis after giving effect to the Lemmerz Acquisition (as defined herein), the term "Lemmerz" refers to Lemmerz Holding GmbH and its subsidiaries, which was acquired by the Company on June 30, 1997, and the term "Hayes" refers to Hayes Wheels International, Inc. and its subsidiaries before the Lemmerz Acquisition. The term "Motor Wheel" refers to Motor Wheel Corporation, a wholly owned subsidiary of the Company, and the term "Motor Wheel Transactions" refers to the series of related transactions which were consummated on July 2, 1996, pursuant to which Motor Wheel became a subsidiary of Hayes. THE COMPANY The Company is the world's largest manufacturer of automotive wheels, supplying approximately 30% and 23% of the automotive wheels in North America and Europe, respectively, and also is the largest global supplier of wheels to original equipment manufacturers ("OEMs") of passenger cars, light trucks and commercial highway vehicles. The Company's principal customers for wheel and brake products consist of every major OEM in North America, Europe and Japan, including General Motors, Ford, Chrysler (the three of which comprised approximately 57% of the Company's pro forma combined 1996 net sales), BMW, Renault, Fiat, Volkswagen, Porsche, Mercedes-Benz, Audi, Volvo, Citroen, Toyota, Mazda, Nissan, Honda, Mitsubishi, Suzuki and Isuzu. The Company also has over 300 commercial highway vehicle customers in North America and Europe, including Trailmobile, Dana/Mack, Mercedes-Benz, Iveco, Strick, Great Dane Trailers, Freightliner, PACCAR, Volvo/GM, Renault and Western Star. The Company also produces a variety of non-wheel cast aluminum products for the automotive, heating equipment and construction industries. Sales of automotive wheel and brake products comprised approximately 76% of the Company's pro forma combined net sales in fiscal 1996 (69% wheels and 7% brake components), with the remaining 24% comprised of commercial highway wheel and brake products (18%) and non-wheel aluminum castings (6%). The Company is the #1 or #2 independent manufacturer of its primary products in the following markets in which it competes. The following table sets forth the Company's estimated pro forma combined market position in North America and Europe in 1996:
MARKET POSITION -------- NORTH AMERICA Automotive Steel Wheels - Including Production by OEMs...... #1 Automotive Cast Aluminum Wheels............................. #2 Automotive Fabricated Aluminum Wheels....................... #1 Automotive Brake Rotors and Drums - Excluding Production by OEMs...................................................... #2 Commercial Highway Wheels................................... #2 Commercial Highway Brake Hubs and Drums..................... #1 EUROPE Automotive Steel Wheels - Including Production by OEMs...... #2 Automotive Cast Aluminum Wheels............................. #1 Commercial Highway Wheels................................... #2
The Company has been active in developing strategic alliances around the world. These include a 58% owned subsidiary in the Czech Republic and strategic manufacturing joint ventures in Mexico, Brazil, 4 8 Venezuela, Portugal, Canada, India, Turkey, Thailand and the United States. The Company also maintains technical relationships in Thailand and South Africa and a sales and engineering office in Japan. As automotive suppliers continue to consolidate worldwide, the Company intends to strengthen and expand its leadership position in meeting the global sourcing, quality and engineering requirements of its customers. The Company's acquisition of Lemmerz, which was consummated on June 30, 1997 (the "Lemmerz Acquisition") has created significant growth opportunities for the Company, resulting from the following: (i) the combination of Hayes' strengths in steel and aluminum wheel manufacturing in North America and Europe with Lemmerz's steel and cast aluminum wheel manufacturing expertise in Europe; (ii) the complementary nature of Hayes' and Lemmerz's respective customer bases; (iii) the combination of Hayes' commercial highway vehicle business in North America with Lemmerz's in Europe; and (iv) the expansion of the Company's full product line resulting from the ability to share innovative products and processes across passenger cars, light trucks and commercial highway vehicles worldwide. In addition to revenue enhancement, management believes that the Lemmerz Acquisition will result in annual cost savings of at least $21 million, primarily as a result of capacity optimization, raw material purchasing savings and overhead savings. These anticipated Lemmerz Acquisition-related cost savings are in addition to the $42 million savings related to the rationalization efforts anticipated to be realized as part of the Motor Wheel Transactions, of which $13 million have been realized through the end of the first quarter of fiscal 1997. BUSINESS STRATEGY The Company believes that it is well-positioned to realize growth in sales and net income. The Company will continue to build upon its position as a leading full-line supplier of wheels and brake components to the global transportation industry, and expects to enhance this position by integrating the European operations of Lemmerz. In addition to creating significant anticipated cost savings and other efficiencies, the Company believes that the Lemmerz Acquisition provides it with the opportunity to materially extend its automotive and commercial highway wheel and brake product offerings in Europe. The Company expects to maintain its leadership position by continuing to offer innovative new products to increase sales and enhance operating results. The Company expects to continue its growth and enhance its market leadership by continuing to implement a strategy based on the following elements: - ENHANCING STRONG RELATIONSHIPS WITH OEMS AND PURSUING NEW CONTRACTS. The Company has developed and intends to continue to build upon strong relationships with its OEM customers which enable it to identify business opportunities in the early stages of vehicle design. The Company has established a leadership position as an OEM supplier of automotive and commercial highway wheels and brakes by maintaining an excellent reputation for quality, service and innovation. The Company believes that its early involvement in the design and engineering of new wheel and brake products as a Tier I supplier has afforded it a competitive advantage in securing new business and will continue to do so in the future. The Company has obtained significant firm orders on a number of high-volume vehicle platforms for periods 1997 through 2000 for incremental new business in North America and Europe. The Company's enhanced global presence resulting from the Lemmerz Acquisition should strengthen its ability to offer worldwide sourcing options to its customers. - CONTINUING FOCUS ON NEW PRODUCT INNOVATION. The Company believes that it has an established reputation for developing product and manufacturing process innovations. For example, the Company is the leading producer of fabricated aluminum wheels, which are 20% lighter than cast aluminum wheels. The Company has also recently introduced Full Face Cast ("FFC(TM)") wheels, which are lightweight, highly styled wheels that combine a cast aluminum face with a fabricated aluminum rim. The Company is also responsible for several steel wheel product and process innovations, including the development and introduction of a lightweight steel wheel, which is 10% to 15% lighter than a traditional steel wheel. The Company intends to continue its efforts to develop innovative wheel and brake products and manufacturing processes to better serve customers globally and improve the Company's product mix with higher margin wheel and brake products. 5 9 - CAPITALIZING ON COMPLEMENTARY NATURE OF BUSINESSES. The Lemmerz Acquisition provides the Company with the opportunity to expand sales and increase market penetration due to the complementary nature of Hayes' and Lemmerz's businesses. The Company intends to improve its future performance by: (i) utilizing Lemmerz's complementary customer relationships to increase the sales of Hayes' innovative products in Europe; (ii) utilizing Lemmerz's expertise in lightweight steel wheels in North America; (iii) drawing on Hayes' expertise in the design and manufacture of lightweight aluminum wheels to bring greater efficiencies to Lemmerz's aluminum wheel operations; (iv) capitalizing on Lemmerz's leadership position in the design and manufacture of wheels for commercial highway vehicles in the European market to increase Hayes' sales of such products in both Europe and North America; (v) attaining additional automotive wheel and brake component sales to OEMs worldwide by building on the Company's existing relationships and enhanced global position; and (vi) reducing costs of materials through further economies of scale. - BENEFITTING FROM CONTINUED INDUSTRY CONSOLIDATION. The worldwide wheel manufacturing industry is fragmented, particularly in Europe, where independent producers dominate. The Company believes that as OEMs continue to outsource and reduce the number of suppliers, there will be opportunities for further consolidation of this industry. The Company believes that, through its established presence in these markets, especially as a result of the Lemmerz Acquisition, it is in a favorable position to take advantage of future industry consolidation. The Company intends to pursue selected acquisition opportunities compatible with its business strategy in North America, Europe, South America and Asia that would further expand its product offerings or geographical reach. - ENHANCING PRESENCE IN EMERGING MARKETS. Having established a leadership position in North America and Europe, the Company plans to enhance its market position in emerging markets. In October 1996, Hayes increased its ownership in Hayes Wheels Autokola NH, a.s. ("Autokola"), a strategic low-cost manufacturing joint venture in the Czech Republic, from 45% to 58%. The Company believes that its Autokola facility will increase the Company's flexibility and improve its economies in serving its expanded European steel wheel customers. The Company maintains additional strategic manufacturing joint ventures in Mexico, Brazil, Venezuela, the United States, Thailand, India, Canada, Turkey and Portugal, as well as technical relationships in Thailand and South Africa. The Company believes that its expanded worldwide manufacturing and strategic joint venture presence resulting from the Lemmerz Acquisition will enhance its ability to meet the global sourcing needs of its customers. - CAPITALIZING ON COST-SAVING OPPORTUNITIES. The Company has aggressively pursued facility rationalization programs and other cost-saving opportunities, including the closure of the Mendota, Illinois and Ypsilanti, Michigan facilities, which were announced prior to the Motor Wheel Transactions. Subsequent to the Motor Wheel Transactions, the Company identified further cost rationalization programs, including the closing of Motor Wheel's former headquarters in Okemos, Michigan and the Company's Romulus, Michigan wheel plant. The savings related to the Motor Wheel Transactions, including those initially targeted and subsequently identified, total $42 million, approximately $13 million of which have been realized through the end of the first quarter of fiscal 1997. Management expects the remaining $29 million of such savings to be fully reflected in the Company's fiscal 1998 financial results. In addition, management expects actions undertaken in connection with the Lemmerz Acquisition to result in annual cost savings of at least $21 million, which are anticipated to be fully reflected in the Company's fiscal 1999 financial results. The Company will continue to optimize the use of its manufacturing capacity and seek further cost savings. THE LEMMERZ ACQUISITION On June 30, 1997, Hayes acquired Lemmerz, which, prior to its acquisition by Hayes, was the leading full-line designer and manufacturer of steel and aluminum wheels for passenger cars, light trucks and commercial highway vehicles in Europe. Hayes acquired Lemmerz in exchange for the payment to the shareholders of Lemmerz (the "Lemmerz Shareholders") of (i) $200 million in cash (the "Cash Consideration") and (ii) a total of five million shares of the Company's Series A Convertible Participating Preferred 6 10 Stock, par value $.01 per share (the "Series A Preferred Stock"), which, upon receipt of stockholder approval at the Company's Annual Meeting of Stockholders currently scheduled to be held on October 22, 1997 (the "1997 Annual Meeting"), will automatically convert (the "Conversion") into five million shares of the common stock, par value $.01 per share, of the Company (the "Common Stock"). Stockholders who currently hold approximately 58% of the outstanding Common Stock have delivered irrevocable proxies to Mr. Horst Kukwa-Lemmerz, one of the Lemmerz Shareholders who has agreed to vote such shares in favor of the Conversion at the 1997 Annual Meeting. Immediately after the Conversion, the shares of Common Stock received by the Lemmerz Shareholders in the Conversion will constitute approximately 16.6% of the then outstanding Common Stock. As used herein, "Lemmerz Transactions" means (i) the Lemmerz Acquisition, (ii) the financing thereof, including the execution of the Amended Credit Agreement (as defined herein) and the issuance of the Old June Notes (the proceeds of which were used to finance the Lemmerz Acquisition and refinance certain indebtedness under the Amended Credit Agreement), (iii) the issuance of the Old July Notes (the proceeds of which were used to refinance certain indebtedness under the Amended Credit Agreement) and (iv) the public offering of an aggregate of 3,779,502 shares of Common Stock (excluding the over-allotment options granted by the Company to the underwriters of such offering) by the Company and certain selling stockholders, which was consummated on August 26, 1997 (the "Equity Offering"). In connection with the Lemmerz Acquisition, the Company has proposed to change its name to Hayes Lemmerz International, Inc. This proposal will be submitted to the Company's stockholders at the 1997 Annual Meeting. RECENT DEVELOPMENTS On July 25, 1997, the Company announced that it had agreed to purchase the assets of Bosch Braking Systems Corporation's heavy-duty hub-and-drum and medium- and heavy-duty steel wheel businesses. These two businesses had combined 1996 sales of approximately $44 million. The Company believes that this acquisition, which is expected to close during the third quarter of 1997, will complement its commercial highway vehicle wheel and brake business. 7 11 THE EXCHANGE OFFER Securities Offered......... Up to (i) $250,000,000 principal amount of New June Notes and (ii) $150,000,000 principal amount of New July Notes. The terms of the New Notes are identical in all material respects with the terms of the Old Notes, except that the terms of the New Notes do not include certain transfer restrictions, registration rights and Additional Interest provisions, as summarized below under "Description of the Notes -- Registration Rights." The Exchange Offer......... The New June Notes and New July Notes are being offered in exchange for a like principal amount of Old June Notes and Old July Notes, respectively, that are properly tendered and accepted. The issuance of the New Notes is intended to satisfy obligations of the Company contained in the Registration Rights Agreements (as defined herein). For procedures for tendering, see "The Exchange Offer." Tenders, Expiration Date; Withdrawal............... The Exchange Offer will expire at 5:00 p.m., New York City time, on , 1997, or such later date and time to which it is extended (the "Expiration Date"). Each Holder tendering Old Notes must acknowledge that it is not engaging in, nor intends to engage in, a distribution of the New Notes. The tender of Old Notes pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. Any Old Notes not accepted for exchange for any reason will be returned without expense to the tendering Holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer. Federal Income Tax Consequences............. The exchange of Old Notes for New Notes pursuant to the Exchange Offer will not result in any income, gain or loss for federal income tax purposes. See "Certain Federal Income Tax Considerations." Use of Proceeds............ There will be no proceeds to the Company from the exchange pursuant to the Exchange Offer. The net proceeds to the Company from the sale of the Old Notes were used to partially fund the Lemmerz Acquisition and to refinance certain Indebtedness under the Amended Credit Agreement. Exchange Agent............. The Bank of New York is serving as the Exchange Agent in connection with the Exchange Offer (the "Exchange Agent"). CONSEQUENCES OF EXCHANGING OLD NOTES PURSUANT TO THE EXCHANGE OFFER Based on interpretations by the staff of the Commission in no-action letters issued to third parties, generally Holders of Old Notes (other than any Holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) who exchange their Old Notes for New Notes pursuant to the Exchange Offer may offer such New Notes for resale, resell such New Notes, and otherwise transfer such New Notes without compliance with the registration and prospectus delivery provisions of the Securities Act; provided that such New Notes are acquired in the ordinary course of the Holders' business and such Holders, other than brokers-dealers, are not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such New Notes. The Company, however, does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. 8 12 Each broker-dealer that receives New Notes for its own account in exchange for Old Notes must acknowledge that such Old Notes were acquired by such broker-dealer as a result of market making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such New Notes. See "Plan of Distribution." To comply with the securities laws of certain jurisdictions, it may be necessary to qualify for sale or register thereunder the New Notes prior to offering or selling such New Notes. The Company and the Guarantors have agreed to use their best efforts, pursuant to the Registration Rights Agreements and subject to certain specified limitations therein, to register or qualify the New Notes held by broker-dealers for offer or sale under the securities or blue sky laws of such jurisdictions as any such holder of such New Notes reasonably requests in writing. Unless the Company is so requested, the Company does not intend to register or qualify the sale of the New Notes in any such jurisdictions. If a Holder of Old Notes does not exchange such Old Notes for New Notes pursuant to the Exchange Offer, such Old Notes will continue to be subject to provisions of the Indenture (as defined herein) governing such Old Notes regarding transfer and exchange of the Old Notes and the restrictions on transfer contained in the legend on the Old Notes. In general, Old Notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. The Company does not currently anticipate that it will take any action to register Old Notes under the Securities Act. See "The Exchange Offer -- Consequences of Failure to Exchange" and "Description of the Notes -- Registration Rights." 9 13 SUMMARY DESCRIPTION OF THE NEW NOTES The terms of the New Notes and the Old Notes are identical in all material respects, except that the New Notes do not include certain transfer restrictions, registration rights and Additional Interest provisions included in the Old Notes. See "Description of the Notes -- Registration Rights." Except as described below, the New June Notes and the New July Notes are identical in all material respects. Securities Offered......... $250,000,000 principal amount of 9 1/8% Series B Senior Subordinated Notes due 2007 and $150,000,000 principal amount of 9 1/8% Series B Senior Subordinated Notes due 2007. Maturity Date.............. July 15, 2007. Interest Rate.............. The New Notes will bear interest at a rate of 9 1/8% per annum. Interest Payment Dates..... Interest will be payable semiannually on each January 15 and July 15, commencing on January 15, 1998. Ranking.................... The New Notes will be general unsecured obligations of the Company subordinate in right of payment to all existing and future Senior Indebtedness (as defined herein) of the Company, including indebtedness under the Amended Credit Agreement and senior in right of payment to all other subordinated indebtedness of the Company. The New Notes will rank pari passu with the Old Notes and the $250 million principal amount of 11% Notes (as defined herein). At April 30, 1997, after giving pro forma effect to the Lemmerz Transactions, the Company and the Guarantors would have had approximately $322.7 million of Senior Indebtedness outstanding. Guarantees................. The New Notes will be unconditionally guaranteed, on a senior subordinated basis, as to the payment of principal, premium, if any, and interest, jointly and severally (the "Guarantees"), by the Guarantors which will consist of certain of the Company's material domestic subsidiaries. The Guarantees will be subordinate to all Senior Indebtedness of the respective Guarantors. Optional Redemption........ The New Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after July 15, 2002 at the redemption prices set forth herein, together with accrued and unpaid interest thereon to the date of redemption. In addition, the Company, at its option, may redeem in the aggregate up to 35% of the original principal amount of June Notes and/or July Notes at any time prior to July 15, 2000, at a redemption price equal to 109.125% of the principal amount thereof, plus accrued and unpaid interest thereon to the redemption date, with the Net Cash Proceeds (as defined herein) of one or more Equity Offerings (as defined herein); provided, however, that at least (i) $162.5 million aggregate principal amount of June Notes and (ii) $97.5 million aggregate principal amount of July Notes, as the case may be, remain outstanding and that such redemption occurs within 60 days following the closing of any such Equity Offering. Change of Control.......... In the event of a Change of Control (as defined herein), the Company will be required to make an offer to purchase all outstanding Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. See "Description of the Notes -- Change of Control Offer." There can be no assurance that 10 14 the Company will have sufficient funds or will be contractually permitted by outstanding Senior Indebtedness to pay the required purchase price for all Notes tendered by holders upon a Change of Control. Certain Covenants.......... The Indentures contain covenants for the benefit of the holders of the Notes that, among other things, restrict the ability of the Company and its Restricted Subsidiaries (as defined herein) to: (i) incur additional Indebtedness; (ii) pay dividends and make distributions; (iii) issue stock of subsidiaries; (iv) make certain investments; (v) repurchase stock; (vi) create liens; (vii) enter into transactions with affiliates; (viii) merge or consolidate the Company or the Guarantors; and (ix) transfer or sell assets. These covenants are subject to a number of important exceptions. See "Description of the Notes -- Certain Covenants." Use of Proceeds............ The Company will not receive any proceeds from the Exchange Offer. The net proceeds from the sale of the Old Notes were used to partially fund the Lemmerz Acquisition and to repay outstanding Indebtedness under the Amended Credit Agreement. For more complete information regarding the New Notes, including the definitions of certain capitalized terms used above, see "Description of the Notes." RISK FACTORS Prospective purchasers of the New Notes should carefully consider the information set forth under the caption "Risk Factors," and all other information set forth in this Prospectus, in evaluating an investment in the New Notes. 11 15 SUMMARY HISTORICAL FINANCIAL INFORMATION The following summary historical financial information is derived from the consolidated historical financial statements of Hayes and Lemmerz and the unaudited pro forma financial information is derived from the pro forma combined condensed financial data of the Company incorporated by reference herein. The historical consolidated financial statements of Hayes for each year in the three-year period ended January 31, 1997 were audited by KPMG Peat Marwick LLP. The historical consolidated financial statements of Lemmerz for each year in the two-year period ended December 31, 1996 were audited by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. The financial information of Hayes for the three-month periods ended April 30, 1997 and 1996, and the financial information of Lemmerz for the three-month period ended March 31, 1997, is unaudited, but in the opinion of management, reflects all adjustments necessary for a fair presentation of such information. The information provided below should be read in conjunction with the consolidated financial statements and notes thereto of Hayes and Lemmerz, which are incorporated by reference herein.
THREE MONTHS ENDED YEAR ENDED JANUARY 31, APRIL 30, ------------------------------------------- ------------------ PRO FORMA HAYES 1995 1996 1997 1997 (A) 1996 1997 ----- ---- ---- ---- --------- ---- ---- (UNAUDITED) (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales....................................... $537.6 $611.1 $ 778.2 $ 913.1 $156.2 $ 250.2 Cost of goods sold (b).......................... 441.4 513.4 675.2 795.9 133.6 212.2 Marketing, general and administration (c)....... 28.6 29.7 35.9 43.6 7.8 11.2 Engineering and product development (c)......... 5.1 4.7 7.2 8.1 1.8 2.3 Depreciation and amortization................... 29.6 32.7 44.4 50.9 8.8 14.8 Other income, net............................... (0.8) (1.5) (4.5) (5.3) (0.5) (0.7) Interest expense, net (d)....................... 13.4 15.0 48.5 73.6 3.6 18.4 Net income (loss)............................... 29.9 28.4 (72.9) (88.2) 6.1 3.8 OTHER DATA: EBITDA (e)(f)................................... $ 92.9 $ 97.5 $ 120.7 $ 133.6 $ 22.3 $ 40.0 Capital expenditures............................ 39.9 43.4 71.4 73.3 23.4 16.7 Ratio of earnings to fixed charges (g).......... 4.2x 3.6x -- -- 3.3x 1.3x BALANCE SHEET DATA (AT END OF PERIOD): Total assets.................................... $589.6 $633.9 $1,183.1 $1,183.1 $648.9 $1,153.4 Total debt...................................... 123.0 133.1 715.8 715.8 153.8 711.6 Stockholders' equity (deficit).................. 216.4 245.4 (41.1) (41.1) 251.1 (40.1)
YEAR ENDED THREE MONTHS YEAR ENDED THREE MONTHS DECEMBER 31, ENDED DECEMBER 31, ENDED ------------------ MARCH 31, ---------------------- MARCH 31, LEMMERZ 1995 1996 1997 1995 1996 1997 ------- ---- ---- ---- ---- ---- ---- (UNAUDITED) (UNAUDITED) (U.S. GAAP AND DM IN MILLIONS) (U.S. GAAP AND DOLLARS (H) IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales................................. $671.2 $691.4 $179.5 $468.1 $459.8 $108.2 Cost of goods sold........................ 545.8 567.9 146.0 380.7 377.7 88.0 Marketing, general and administration..... 82.6 75.5 17.4 57.6 50.2 10.5 Engineering and product development....... 12.8 12.6 3.3 8.9 8.4 2.0 Depreciation and amortization............. 44.3 44.0 10.8 30.9 29.3 6.5 Interest expense, net..................... 11.2 8.0 1.8 7.8 5.3 1.1 Net income................................ 23.8 13.8 5.5 16.6 9.2 3.3 OTHER DATA: EBITDA (e)................................ $ 91.9 $ 87.7 $ 26.0 $ 64.1 $ 58.3 $ 15.7 Capital expenditures...................... 70.4 44.2 10.6 42.8 25.0 6.4 BALANCE SHEET DATA (AT END OF PERIOD): Total assets.............................. $649.8 $641.8 $651.5 $453.3 $412.8 $392.8 Total debt................................ 120.3 130.8 124.7 83.9 84.1 75.2 Shareholders' equity...................... 163.1 170.4 173.2 113.8 109.6 104.4
(see footnotes on the following page) 12 16 - ------------------------- (a) Represents full year results assuming the Motor Wheel Transactions occurred on February 1, 1996. (b) Pro forma data includes a $4.6 million adjustment as a result of the acquisition of Motor Wheel related to the effects of purchase accounting adjustments and adjustments to reflect adoption of Hayes' accounting policies and pension and post-retirement benefit cost assumptions. (c) Pro forma data includes a $0.4 million adjustment related to savings from personnel reductions at Motor Wheel's Okemos, Michigan corporate headquarters announced and implemented prior to the consummation of the Motor Wheel Transactions and the effects of purchase accounting adjustments. (d) Pro forma data reflects the pro forma interest expense assuming the Motor Wheel Transactions occurred on February 1, 1996. (e) EBITDA should not be construed as a substitute for income from operations, net income or cash flow from operating activities, for the purpose of analyzing the Company's operating performance, financial position and cash flows. The Company has presented EBITDA because it is commonly used by investors to analyze and compare companies on the basis of operating performance and to determine a company's ability to service debt. See "Description of the Notes -- Certain Definitions." (f) Pro forma data includes a $3.1 million adjustment related to savings from personnel reductions at Motor Wheel's Okemos, Michigan corporate headquarters announced and implemented prior to the consummation of the Motor Wheel Transactions and the effects of purchase accounting adjustments. (g) The ratio of earnings to fixed charges for the fiscal years ended January 31, 1993 and 1994 were 1.2x and 3.9x, respectively. For the fiscal year ended January 31, 1997, earnings were insufficient to cover fixed charges by $102.0 million. On a pro forma basis for the fiscal year ended January 31, 1997, earnings were insufficient to cover fixed charges by $122.6 million. (h) Statement of Operations and Other Data were translated using the average DM/U.S. dollar exchange rate for the respective year or three-month period (1.4338 for 1995; 1.5037 for 1996; 1.6586 for 1997). Balance Sheet Data were translated using the ending DM/U.S. dollar exchange for the respective year or three-month period (1.4335 for 1995; 1.5548 for 1996; 1.6779 for 1997). 13 17 SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA The following table sets forth certain unaudited pro forma financial data for the Company for the year ended January 31, 1997 and for the three-month period ended April 30, 1997, which are presented to reflect the pro forma effect of the Lemmerz Transactions and the Motor Wheel Transactions. The unaudited pro forma statement of operations data give effect to the Lemmerz Transactions and the Motor Wheel Transactions as if they had occurred on February 1, 1996. The unaudited pro forma balance sheet data give effect to the Lemmerz Transactions as if they had occurred on April 30, 1997. The unaudited pro forma combined financial data do not purport to be indicative of the results of operations or financial position of the Company that would have actually been obtained had the Lemmerz Transactions and the Motor Wheel Transactions been completed as of February 1, 1996, or which may be obtained in the future. The unaudited pro forma combined financial data (i) have been derived from and should be read in conjunction with the pro forma combined condensed financial data and the notes thereto incorporated by reference in this Prospectus and (ii) should be read in conjunction with the separate historical consolidated financial statements of Hayes and Lemmerz and the notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations incorporated by reference herein.
COMPANY PRO FORMA COMPANY PRO FORMA YEAR ENDED THREE MONTHS ENDED JANUARY 31, 1997 (A) APRIL 30, 1997(A) -------------------- ------------------ (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Net sales................................................... $1,372.9 $ 358.4 Cost of goods sold.......................................... 1,158.7 297.3 Marketing, general and administration....................... 98.5 22.9 Engineering and product development......................... 16.5 4.3 Depreciation and amortization............................... 70.0 19.6 Interest expense, net....................................... 96.3 24.1 Net income (loss)........................................... (68.1) 6.3 OTHER DATA: EBITDA (b).................................................. $ 191.9 $ 55.7 Cash interest expense, net.................................. 90.2 22.4 Capital expenditures........................................ 98.3 23.1 BALANCE SHEET DATA (AT END OF PERIOD): Total assets......................................................................... $1,783.1 Total debt........................................................................... 972.7 Stockholders' equity................................................................. 115.3
- ------------------------- (a) The pro forma financial data do not reflect (i) any cost savings related to or synergies that are expected to result from the Lemmerz Acquisition, (ii) future unrealized cost savings related to, or synergies that are expected to result from, the Motor Wheel Transactions or (iii) any cost savings related to the closing of Hayes' Romulus facility. (b) EBITDA should not be construed as a substitute for income from operations, net income or cash flow from operating activities, for the purpose of analyzing the Company's operating performance, financial position and cash flows. The Company has presented EBITDA because it is commonly used by investors to analyze and compare companies on the basis of operating performance and to determine a company's ability to service debt. See "Description of the Notes -- Certain Definitions." 14 18 RISK FACTORS Holders of Old Notes should consider carefully all of the information set forth and incorporated by reference herein. See "Available Information" and "Incorporation of Documents By Reference." Holders should particularly evaluate the following risks before tendering their Old Notes in the Exchange Offer, although the risk factors set forth below (other than the first two risk factors) are generally applicable to the New Notes as well as the Old Notes. CONSEQUENCES OF FAILURE TO EXCHANGE Issuance of the New Notes in exchange for the Old Notes pursuant to the Exchange Offer will be made following the prior satisfaction, or waiver, of the conditions set forth in "The Exchange Offer -- Certain Conditions to the Exchange Offer" and only after a timely receipt by the Exchange Agent of such Old Notes and a properly completed and duly executed Letter of Transmittal in respect of such Old Notes and all other required documents. Therefore, Holders of Old Notes desiring to tender such Old Notes in exchange for New Notes should allow sufficient time to ensure timely delivery. Neither the Exchange Agent nor the Company is under any duty to give notification of defects or irregularities with respect to the tenders of Old Notes for exchange. Old Notes that are not tendered or are tendered but not accepted will, following the consummation of the Exchange Offer, continue to be subject to the provisions of the Indenture regarding transfer and exchange of such Old Notes, the existing restrictions upon transfer thereof set forth in the legend on the Old Notes and in the Offering Memorandums dated June 19, 1997 and July 16, 1997, as the case may be, relating to the Old June Notes and the Old July Notes (the "Offering Memorandums"). Except in certain limited circumstances with respect to certain types of Holders of Old Notes, the Company will have no further obligation to provide for the registration under the Securities Act of such Old Notes. In general, Old Notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. The Company does not currently anticipate that it will take any action to register the Old Notes under the Securities Act or blue sky laws. REQUIREMENTS FOR TRANSFER OF NEW NOTES Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, the Company believes that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for resale, resold or otherwise transferred by Holders thereof (other than any such Holder which is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holders' business and such Holders have no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of such New Notes. Each Holder, other than a broker-dealer, must acknowledge that it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of New Notes. If any Holder is an affiliate of the Company, is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transactions. Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market making activities or other trading activities. The Company has agreed that starting on the Expiration Date and ending on the close of business of the 180th day following the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." However, to comply with the 15 19 securities laws of certain jurisdictions, if applicable, the New Notes may not be offered or sold unless they have been registered or qualified for sale in such jurisdictions or an exemption from registration or qualification is available and is complied with. The Company has agreed, pursuant to the Registration Rights Agreements and subject to certain specified limitations therein, to use its best efforts to register or qualify the New Notes for offer or sale under the securities or blue sky laws of such jurisdiction as any holder of the New Notes reasonably requests in writing. Unless the Company is so requested, the Company does not intend to take any action to register or qualify the sale of the New Notes in any such jurisdictions. See "The Exchange Offer -- Consequences of Failure to Exchange." SIGNIFICANT INDEBTEDNESS At April 30, 1997, the Company's long-term debt was $972.7 million and its total stockholders' equity was $115.3 million on a pro forma basis after giving effect to the Lemmerz Transactions. The Company's high degree of leverage may have important consequences for the Company, including that: (i) the ability of the Company to obtain additional financing for acquisitions, working capital, capital expenditures or other purposes, if necessary, may be impaired or such financing may not be available on terms favorable to the Company; (ii) a substantial portion of the Company's cash flow will be used to pay the Company's interest expense and debt amortization, which will reduce the funds that would otherwise be available to the Company for its operations and future business opportunities; (iii) a substantial decrease in net operating cash flows or an increase in expenses of the Company could make it difficult for the Company to meet its debt service requirements and force it to modify its operations; (iv) the Company may be more highly leveraged than its competitors, which may place it at a competitive disadvantage; and (v) the Company's high degree of leverage may make it more vulnerable to a downturn in its business or the economy generally. Any inability of the Company to service its indebtedness or obtain additional financing, as needed, would have a material adverse effect on the Company. RESTRICTIVE DEBT COVENANTS The Company's Amended Credit Agreement, the Indentures and the indenture governing the Company's 11% Senior Subordinated Notes due 2006 (the "11% Notes") (collectively, the "Debt Instruments") contain a number of significant covenants that, among other things, restrict the ability of the Company to (i) declare dividends or redeem or repurchase capital stock, (ii) prepay, redeem or purchase debt, including the Notes, (iii) incur liens and engage in sale-leaseback transactions, (iv) make loans and investments, (v) incur additional indebtedness, (vi) amend or otherwise alter debt and other material agreements, (vii) make capital expenditures, (viii) engage in mergers, acquisitions and asset sales, (ix) enter into transactions with affiliates and (x) alter the business it conducts. The indebtedness outstanding under the Amended Credit Agreement is guaranteed by all of the Company's material domestic subsidiaries and is secured by a first priority lien on substantially all of the properties and assets of the Company and its respective domestic subsidiaries, now owned or acquired later, including a pledge of all of the shares of the Company's respective existing and future domestic subsidiaries and up to 65% of the shares of the Company's existing and future foreign subsidiaries which are owned by the Company or one of its domestic subsidiaries. In addition, under the Amended Credit Agreement, the Company is also required to comply with financial covenants with respect to (i) a maximum leverage ratio, (ii) a minimum interest coverage ratio and (iii) a minimum fixed charge coverage ratio. If the Company were unable to borrow under its Amended Credit Agreement due to a default or failure to meet certain specified borrowing base prerequisites for borrowing, it could be left without sufficient liquidity. SUBORDINATION The New Notes will be unsecured and subordinated to the prior payment in full of all Senior Indebtedness whether currently existing or hereafter incurred. In addition, the New Notes will rank pari passu in right of payment with the 11% Notes and the Old Notes. At April 30, 1997, on a pro forma basis and after giving effect to the Lemmerz Transactions, the aggregate outstanding principal amount of all Senior Indebtedness would have been approximately $322.7 million. In the event of a bankruptcy, liquidation or reorganization of the Company, the assets of the Company will be available to pay obligations on the New 16 20 Notes only after all Senior Indebtedness has been paid in full, and there may not be sufficient assets remaining to pay amounts due on any or all of the New Notes. In addition, the Company may not pay principal or premium, if any, or interest on the New Notes if any Senior Indebtedness is not paid when due or any other default on any Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms, unless, in either case, such amount has been paid in full or the default has been cured or waived and such acceleration has been rescinded. Further, if any default occurs with respect to certain Senior Indebtedness and certain other conditions are satisfied, the Company may not make any payments on the New Notes for a designated period of time. Finally, if any judicial proceeding is pending with respect to any such default in payment on any Senior Indebtedness, or other default with respect to certain Senior Indebtedness, or if the maturity of the New Notes is accelerated because of a default under the Indentures and such default constitutes a default with respect to any Senior Indebtedness, the Company may not make any payment on the New Notes. INCREASE IN VARIABLE INTEREST RATES; CURRENCY FLUCTUATIONS A significant portion of the indebtedness of the Company bears interest at variable rates. Although the Company has entered into interest rate protection agreements to limit its exposure to increases in such interest rates, such agreements do not eliminate such exposure to variable rates. Any increase in the interest rates on the Company's indebtedness will reduce funds available to the Company for its operations and future business opportunities and will exacerbate the consequences of the Company's leveraged capital structure. As a result of the Lemmerz Acquisition, the Company is likely to experience increased foreign currency exchange gains and losses in the ordinary course of its business due to the increase in its operations outside the United States. As a result, fluctuations in the exchange rate between the U.S. dollar, the DM and the currencies of other countries, in which the Company conducts its business, may have a material impact on the Company's financial condition or results of operations. While the Company engages in foreign currency hedging transactions which moderate the overall effect of such currency exchange rate fluctuations, the Company expects that such fluctuations will continue, and there can be no assurance that the Company will be successful in its hedging activities or that such exchange rate fluctuations will not otherwise have a material adverse effect on the Company's financial condition or results of operations, or cause significant fluctuations in quarterly results of operations. DEPENDENCE ON MAJOR CUSTOMERS The Company derived approximately 57% of its pro forma combined 1996 net sales from General Motors, Ford and Chrysler. The Company has been a supplier to these companies for many years, and continually engages in efforts to improve and expand on its relations with each of such companies. There can be no assurance, however, that the Company will maintain or improve these relationships or that the Company will continue to supply these customers at current levels. The loss of a significant portion of sales to General Motors, Ford or Chrysler could have a material adverse effect on the Company's business. Furthermore, General Motors and Ford manufacture a significant portion of their own steel wheel requirements and Ford, to a limited extent, manufactures aluminum wheels for its own use. Although General Motors and Ford have indicated that they will continue to rely on outside suppliers, they may increase their internal production of wheels, which could reduce the market for the Company's products and have an adverse effect on the Company. CYCLICAL NATURE OF INDUSTRY The principal operations of the Company are directly related to domestic and foreign automotive and commercial highway vehicle production. Industry sales and production are cyclical and can be affected by the strength of the economy generally, or in specific regions such as North America or Europe, by prevailing interest rates and by other factors which may have an effect on the level of the Company's sales. 17 21 LABOR RELATIONS At April 30, 1997, approximately 28% of the Company's employees in the United States were represented by the United Auto Workers ("UAW") or United Steel Workers ("USW"). Collective bargaining agreements with the UAW or USW affecting these employees expire at various times through 1997 and 1998. As is common in many European jurisdictions, substantially all of the Company's employees in Europe are covered by country-wide collective bargaining agreements, expiring at various times through 1998. Certain employees of the Company's major customers are unionized. While the Company believes that its relations with its employees are satisfactory, a dispute between the Company and its employees, or between any of its major customers and such customers' employees, could have a material adverse effect on the Company. CHALLENGES OF BUSINESS INTEGRATION The full benefits of the Lemmerz Acquisition will require the integration of each company's administrative, finance, sales and marketing organizations, the coordination of each company's sales efforts, and the implementation of appropriate operations, financial and management systems and controls in order to capture the efficiencies and the cost reductions that are expected to result therefrom. This will require substantial attention from the Company's management team. The diversion of management attention, as well as any other difficulties which may be encountered in the transition and integration process, could have an adverse impact on the revenue and operating results of the Company. There can be no assurance that the Company will be able to integrate the operations of Hayes and Lemmerz successfully. On June 10, 1997, the Company filed a notification with the German Federal Cartel Office regarding the Lemmerz Acquisition. On or about July 11, 1997, the Federal Cartel Office notified the Company that it intended to conduct a more detailed examination of the Lemmerz Acquisition. In connection therewith, the Federal Cartel Office has requested from the Company additional information regarding the Company's markets and sales, and has also requested related information from certain of the Company's competitors and customers. All of the information requested from the Company was submitted on August 15, 1997. Thereafter, the Federal Cartel Office may elect to conduct additional inquiries regarding this matter. In the event the Federal Cartel Office elects at that time to proceed with this matter, there can be no assurances that any actions taken or required to be taken by the Federal Cartel Office will not have a material adverse effect on the Company. LIMITED RECOURSE TO SELLERS The Company's recourse to the Lemmerz Shareholders under the indemnification provisions of the Lemmerz Acquisition agreement is extremely limited. Accordingly, unanticipated events or liabilities related to the Lemmerz business could materially and adversely affect the Company. POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES The Company's operations are subject to various foreign, federal, state and local environmental laws, ordinances, and regulations, including those governing discharges into the air and water, the storage, handling and disposal of solid and hazardous wastes, the remediation of soil and groundwater contaminated by petroleum products or hazardous substances or wastes, and the health and safety of employees ("Environmental Laws"). Under certain Environmental Laws a current or previous owner or operator of property may be liable for the costs of removal or remediation of certain hazardous substances or petroleum products on, under or in such property, without regard to whether the owner or operator knew of, or caused, the presence of the contaminants, and regardless of whether the practices that resulted in the contamination were legal at the time they occurred. The presence of, or failure to remediate properly such substances may adversely affect the ability to sell or rent such property or to borrow using such property as collateral. Persons who generate, arrange for the disposal or treatment of, or dispose of hazardous substances may be liable for the costs of investigation, remediation or removal of such hazardous substances at or from the disposal or treatment facility, regardless of whether the such facility is owned or operated by such person. Additionally, the owner of a site may be subject to common law claims by third parties based on damages and costs resulting from 18 22 environmental contamination emanating from a site. Compliance with Environmental Laws, stricter interpretations of or amendments to such laws, or more vigorous enforcement policies by regulatory agencies with respect to them may require material expenditures by the Company. The nature of the Company's current and former operations and the history of industrial uses at some of its facilities expose the Company to the risk of liabilities or claims with respect to environmental and worker health and safety matters which could have a material adverse effect on the Company's financial condition or results of operations. LACK OF A PUBLIC MARKET FOR THE NOTES; RESTRICTIONS ON TRANSFERABILITY The New Notes will constitute a new issue of securities with no established trading market. Although the Initial Purchasers have informed the Company that they currently intend to make a market in the New Notes, they are not obligated to do so and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Notes. The New Notes are expected to be eligible for trading by qualified buyers in the PORTAL market. The Company does not intend to apply for listing of the New Notes on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). The Exchange Offer is not conditioned upon any minimum or maximum aggregate principal amount of Notes being tendered for exchange. No assurance can be given as to the liquidity of the trading market for the Notes, or, in the case of non-tendering holders of Old Notes, the trading market for the Old Notes following the new exchange offer. The liquidity of, and trading market for, the New Notes also may be adversely affected by general declines in the market for similar securities. Such a decline may adversely affect such liquidity and trading markets independent of the financial performance of, and prospects for, the Company. 19 23 THE EXCHANGE OFFER TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES The Old June Notes were sold by the Company to the Initial Purchasers of the Old June Notes on June 30, 1997 (the "June Issue Date") pursuant to a Purchase Agreement, dated June 19, 1997, and the Old July Notes were sold by the Company to the Initial Purchasers of the Old July Notes on July 22, 1997 (the "July Issue Date") pursuant to a Purchase Agreement, dated July 16, 1997. Upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal (which together constitute the Exchange Offer), the Company will accept for exchange Old Notes which are properly tendered on or prior to the Expiration Date and not withdrawn as permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., New York City time, on , 1997; provided, however, that if the Company, in its sole discretion, has extended the period of time for which the Exchange Offer is open, the term "Expiration Date" means the latest time and date to which the Exchange Offer is extended. As of the date of this Prospectus, $250,000,000 aggregate principal amount of the Old June Notes is outstanding and $150,000,000 aggregate principal amount of the Old July Notes is outstanding. This Prospectus, together with the Letter of Transmittal, is first being sent on or about the date of this Prospectus, to all Holders of Old Notes known to the Company. The Company's obligation to accept Old Notes for exchange pursuant to the Exchange Offer is subject to certain conditions as set forth under "-- Certain Conditions to the Exchange Offer." The Company expressly reserves the right, at any time or from time to time and subject to its obligations under the Registration Rights Agreements, to extend the period of time during which the Exchange Offer is open, and thereby delay acceptance for exchange of any Old Notes, by giving oral or written notice of such extension to the Holders thereof. During any such extension, all Old Notes previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by the Company. Any Old Notes not accepted for exchange for any reason will be returned without expense to the tendering Holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer. Old Notes tendered in the Exchange Offer must be in denominations of principal amount of $1,000 and any integral multiple thereof. The Company expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Old Notes not theretofore accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified below under "Certain Conditions to the Exchange Offer." The Company will give oral or written notice of any extension, amendment, non-acceptance or termination to the Holders of the Old Notes as promptly as practicable, such notice in the case of any extension to be issued by means of a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. PROCEDURES FOR TENDERING OLD NOTES The tender to the Company of Old Notes by a Holder thereof as set forth below and the acceptance thereof by the Company will constitute a binding agreement between the tendering Holder and the Company upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal. Except as set forth below, a Holder (which term, for purposes of the Exchange Offer, includes any participant in the Book-Entry Transfer Facility (as defined herein) system whose name appears on a security position listing as the Holder of such Old Notes) who wishes to tender Old Notes for exchange pursuant to the Exchange Offer must transmit a Letter of Transmittal, properly completed and duly executed, including all other documents required by such Letter of Transmittal or (in the case of a book-entry transfer) an Agent's Message (as defined herein) in lieu of such Letter of Transmittal to the Exchange Agent at the address set forth below under "-- Exchange Agent" on or prior to the Expiration Date. In addition, either (i) certificates for such Old Notes must be received by the Exchange Agent along with the Letter of Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old Notes, if such procedure is available, into the Exchange Agent's account at DTC (as defined herein) (the 20 24 "Book-Entry Transfer Facility") pursuant to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the Expiration Date along with the Letter of Transmittal or an Agent's Message in lieu of a Letter of Transmittal, or (iii) the Holder must comply with the guaranteed delivery procedures described below. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering Participant (as defined herein), which acknowledgment states that such Participant has received and agrees to be bound by, and make the representations and warranties contained in, the Letter of Transmittal and that the Company may enforce such Letter of Transmittal against such Participant. THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the Old Notes surrendered for exchange pursuant thereto are tendered (i) by a Holder of the Old Notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution (as defined herein). In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company having an office or correspondent in the United States or by such other Eligible Institution within the meaning of Rule 17(A)(d)-15 of the Exchange Act (collectively, "Eligible Institutions"). If Old Notes are registered in the name of a person other than a signer of the Letter of Transmittal, the Old Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer, or exchange, in satisfactory form as determined by the Company in its sole discretion, duly executed by the registered Holder with the signature thereon guaranteed by an Eligible Institution. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of Old Notes tendered for exchange will be determined by the Company in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any and all tenders of any particular Old Note not properly tendered or to not accept any particular Old Note which acceptance might, in the judgment of the Company or its counsel, be unlawful. The Company also reserves the absolute right to waive any defects or irregularities or conditions of the Exchange Offer as to any particular Old Note either before or after the Expiration Date (including the right to waive the ineligibility of any Holder who seeks to tender Old Notes in the Exchange Offer). The interpretation of the terms and conditions of the Exchange Offer as to any particular Old Note either before or after the Expiration Date (including the Letter of Transmittal and the instructions thereto) by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes for exchange must be cured within such reasonable period of time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of Old Notes for exchange, nor shall any of them incur any liability for failure to give such notification. If a Letter of Transmittal is signed by a person or persons other than the registered Holder or Holders of Old Notes, such Old Notes must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered Holder or Holders that appear on the Old Notes. If a Letter of Transmittal or any Old Notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal. 21 25 By tendering, each Holder will represent to the Company that, among other things, the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Notes, whether or not such person is the Holder, that neither the Holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such New Notes and that neither the Holder nor any such other person is an "affiliate," as defined under Rule 405 of the Securities Act, of the Company. If any Holder is an affiliate of the Company, is engaged in or intends to engage in or has any arrangement with any person to participate in the distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holders (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will accept, promptly after the Expiration Date, all Old Notes properly tendered, issue the New Notes promptly after acceptance of the Old Notes and cause the New Notes to be authenticated by the Trustee. See "-- Certain Conditions to the Exchange Offer" below. For purposes of the Exchange Offer, the Company shall be deemed to have accepted properly tendered Old Notes for exchange when, as and if the Company has given oral (promptly confirmed in writing) or written notice thereof to the Exchange Agent. For each Old June Note or Old July Note accepted for exchange, the Holder of such Old Note will receive a New June Note or New July Note, as the case may be, having a principal amount equal to that of the surrendered Old Note. Interest on the New June Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old June Notes surrendered in exchange therefor or, (ii) if the Old June Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old June Notes, from June 30, 1997. Interest on the New July Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Old July Notes surrendered in exchange therefor or, (ii) if the Old July Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Old July Notes, from July 22, 1997. Pursuant to the Registration Rights Agreements, if (i) a Registration Statement or Shelf Registration Statement is not filed within 60 days after the (A) June Issue Date with respect to the Old June Notes or (B) July Issue Date with respect to the Old July Notes, (ii) a Registration Statement or Shelf Registration Statement is not declared effective within 120 days after the (A) June Issue Date with respect to the Old June Notes or (B) July Issue Date with respect to the Old July Notes, or (iii) either (A) the Company has not exchanged the (a) New June Notes for all Old June Notes or (b) New July Notes for all Old July Notes, validly tendered in accordance with the terms of the Exchange Offer on or prior to 150 days after the (A) June Issue Date with respect to the Old June Notes or (B) July Issue Date with respect to the Old July Notes or (B) the Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the termination of the Effectiveness Period (subject to certain exceptions); (each of such events referred to in clauses (i) through (iii) above is a "Registration Default"), the sole remedy available to Holders of the Old June Notes or Old July Notes, as the case may be, will be the assessment of Additional Interest as follows: the per annum interest rate on such Old Notes will increase by 50 basis points, and the per annum interest rate will increase by an 22 26 additional 25 basis points for each subsequent 90-day period during which the Registration Default remains uncured, up to a maximum additional interest rate of 200 basis points per annum in excess of the 9 1/8% interest rate. All Additional Interest will be payable to Holders of such Old Notes in cash on each January 15 and July 15, commencing with the first such date occurring after any such Additional Interest commences to accrue, until such Registration Default is cured. After the date on which such Registration Default is cured, the interest rate on such Old Notes will revert to the interest rate originally borne by such Old Notes. In all cases, issuance of New Notes for Old Notes that are accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility, the Letter of Transmittal properly completed and duly executed or an Agent's Message in lieu thereof and all other required documents. If any tendered Old Notes are not accepted for any reason set forth in the terms and conditions of the Exchange Offer or if Old Notes are submitted for an amount or quantity greater than the Holder desires to exchange, such unaccepted or non-exchanged Old Notes will be returned without expense to the tendering Holder thereof (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry procedures described below, such non-exchanged Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility) as promptly as practicable after the expiration or termination of the Exchange Offer. BOOK-ENTRY TRANSFER The Exchange Agent will request the establishment of accounts with respect to the Old Notes at the Book-Entry Transfer Facility for purposes of the Exchange Offer within two business days after the date of this Prospectus unless an Exchange Agent already has established an account with the Book-Entry Transfer Facility suitable for the Exchange Offer, and any financial institution that is a Participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Old Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. ALTHOUGH DELIVERY OF OLD NOTES MAY BE EFFECTED THROUGH BOOK-ENTRY TRANSFER AT THE BOOK-ENTRY TRANSFER FACILITY, THE LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), WITH ANY REQUIRED SIGNATURE GUARANTEES OR AN AGENT'S MESSAGE IN LIEU THEREOF AND ANY OTHER REQUIRED DOCUMENTS, MUST, IN ANY CASE, BE TRANSMITTED TO AND RECEIVED BY THE EXCHANGE AGENT AT THE ADDRESS SET FORTH BELOW UNDER "EXCHANGE AGENT" ON OR PRIOR TO THE EXPIRATION DATE OR THE GUARANTEED DELIVERY PROCEDURES DESCRIBED BELOW MUST BE COMPLIED WITH. GUARANTEED DELIVERY PROCEDURES If a Holder of the Old Notes desires to tender such Old Notes and the Old Notes are not immediately available, or time will not permit such Holder's Old Notes or other required documents to reach the Exchange Agent before the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if (i) the tender is made through an Eligible Institution, (ii) prior to the Expiration Date, the Exchange Agent received from such Eligible Institution the Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within five New York Stock Exchange ("NYSE") trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees, and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent and (iii) the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry 23 27 Confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any required signature guarantees, and all other documents required by the Letter of Transmittal, are received by the Exchange Agent within five NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. WITHDRAWAL RIGHTS Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date. For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agent at the address set forth below under "-- Exchange Agent." Any such notice of withdrawal must specify the name of the person having tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn (including the principal amount in the case of such Old Notes), and (where certificates for Old Notes have been transmitted) specify the name in which such Old Notes are registered, if different from that of the withdrawing Holder. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent then, prior to the release of such certificates the withdrawing Holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such Holder is an Eligible Institution. If Old Notes have been tendered pursuant to the procedure for book-entry transfer described above, the executed notice of withdrawal, guaranteed by an Eligible Institution, unless such Holder is an Eligible Institution, must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Old Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the Holder thereof without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility for the Old Notes) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures described under "-- Procedures for Tendering Old Notes" above at any time on or prior to the Expiration Date. CERTAIN CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provision of the Exchange Offer, the Company shall not be required to accept for exchange, or to issue New Notes in exchange for, the Old Notes and may terminate or amend the Exchange Offer, if at any time before the acceptance of such Old Notes for exchange or the exchange of the New Notes for such Old Notes, any of the following events shall occur: (a) there shall be threatened, instituted or pending any action or proceeding before, or any injunction, order or decree shall have been issued by, any court or governmental agency or other governmental regulatory or administrative agency or commission, (i) seeking to restrain or prohibit the making or consummation of the Exchange Offer or any other transaction contemplated by the Exchange Offer, or assessing or seeking any damages as a result thereof, or (ii) resulting in a material delay in the ability of the Company to accept for exchange or exchange some or all of the Old Notes pursuant to the Exchange Offer, or any statute, rule, regulation, order or injunction shall be sought, proposed, introduced, enacted, promulgated or deemed applicable to the Exchange Offer or any of the transactions contemplated by the Exchange Offer by any government or governmental authority, domestic or foreign, or any action shall have been taken, proposed or threatened, by any government, governmental authority, agency or court, domestic or foreign, that in the sole judgment of the Company might directly or indirectly result in any of the consequences referred to in clauses (i) or (ii) above or, in the sole judgment of the Company, might result in the holders of New Notes having obligations with respect to resales and transfers of New Notes which are greater than those described in the interpretation of the Commission 24 28 referred to on the cover page of this Prospectus, or would otherwise make it inadvisable to proceed with the Exchange Offer; (b) there shall have occurred (i) any general suspension of or general limitation on prices for, or trading in, securities on any national securities exchange or in the over-the-counter market, (ii) any limitation by any governmental agency or authority which may adversely affect the ability of the issuer to complete the transactions contemplated by the Exchange Offer, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation by any governmental agency or authority which adversely affects the extension of credit or (iv) a commencement of a war, armed hostilities or other similar international calamity directly or indirectly involving the United States, or, in the case of any of the foregoing existing at the time of the commencement of the Exchange Offer, a material acceleration or worsening thereof; or (c) any change (or any development involving a prospective change) shall have occurred or be threatened in the business, properties, assets, liabilities, financial condition, operations, results of operations or prospects of the Company and its subsidiaries taken as a whole that, in the reasonable judgment of the Company, is or may be adverse to the Company, or the Company shall have become aware of facts that, in the reasonable judgment of the Company, have or may have adverse significance with respect to the value of the Old Notes or the New Notes; which, in the reasonable judgment of the Company in any case, and regardless of the circumstances (including any action by the Company) giving rise to any such condition, makes it inadvisable to proceed with the Exchange Offer and/or with such acceptance or exchange or with such exchange. The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company regardless of the circumstances giving rise to any such condition or may be waived by the Company in whole or in part at any time and from time to time in its sole discretion. The failure by the Company at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. In addition, the Company will not accept for exchange any Old Notes tendered, and no New Notes will be issued in exchange for any such Old Notes, if at such time any stop order shall be threatened or in effect with respect to the Registration Statement of which this Prospectus constitutes a part or the qualification of the Indenture under the Trust Indenture Act of 1939, as amended (the "TIA"). EXCHANGE AGENT The Bank of New York has been appointed as the Exchange Agent in respect of the Notes for the Exchange Offer. All executed Letters of Transmittal in respect of the Notes should be directed to the Exchange Agent at the address set forth below. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal in respect of the Notes and requests for Notices of Guaranteed Delivery should be directed to the Exchange Agent addressed as follows: Delivery To: The Bank of New York, as Exchange Agent By Hand and Overnight By Registered or Certified By Facsimile: Courier: Mail: (212) 815-6339 101 Barclay Street 101 Barclay Street, 7E Confirm by Telephone: Corporate Trust Services New York, New York 10286 (212) 815-2742 Window Attention: Reorganization Ground Level Section New York, New York 10286 Attention: Reorganization Section
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. 25 29 FEES AND EXPENSES The Company will not make any payment to brokers, dealers, or others soliciting acceptances of the Exchange Offer except for reimbursement of mailing expenses. The estimated cash expenses to be incurred in connection with the Exchange Offer will be paid by the Company and are estimated in the aggregate to be $ . TRANSFER TAXES Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith, except that Holders who instruct the Company to register New Notes in the name of, or request that Old Notes not tendered or not accepted in the Exchange Offer be returned to, a person other than the registered tendering Holder will be responsible for the payment of any applicable transfer tax thereon. CONSEQUENCES OF FAILURE TO EXCHANGE Holders of Old Notes who do not exchange their Old Notes for New Notes pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture governing such Old Notes regarding transfer and exchange of such Old Notes and the restrictions on transfer of such Old Notes as set forth in the legend on the Old Notes and as described in the Offering Memorandum pursuant to which such Old Note was issued as a consequence of the issuance of such Old Notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Old Notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. The Company does not currently anticipate that it will take any action to register the Old Notes under the Securities Act. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, the Company believes that New Notes issued in exchange of Old Notes pursuant to the Exchange Offer may be offered for resale, resold or otherwise transferred by Holders thereof (other than any such Holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holders' business and such Holders, other than brokers-dealers, are not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, the distribution (within the meaning of the Securities Act) of such New Notes. The Company, however, does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. If any Holder has any arrangement or understanding with respect to the distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives New Notes for its own account in exchange for Old Notes must acknowledge that such Old Notes were acquired by such broker-dealer as a result of market making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such New Notes. See "Plan of Distribution." To comply with the securities laws of certain jurisdictions, it may be necessary to qualify for sale or register thereunder the New Notes prior to offering or selling such New Notes. The Company has agreed, pursuant to the Registration Rights Agreement and subject to certain specified limitations therein, to use its best efforts to register or qualify the New Notes held by broker-dealers for offer or sale under the securities or blue sky laws of such jurisdictions as any such holder of such New Notes reasonably requests in writing. Unless the Company is so requested, the Company does not intend to register or qualify the sale of the New Notes in any such jurisdictions. 26 30 DESCRIPTION OF THE NOTES The Old June Notes were issued, and the New June Notes will be issued, pursuant to an Indenture, dated as of June 30, 1997 (the "June Indenture"), among the Company, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The Old July Notes were issued, and the New July Notes will be issued, pursuant to an Indenture, dated as of July 22, 1997 (the "July Indenture," and together with the June Indenture, the "Indentures"), among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture governing such Notes and those made part of the Indentures by reference to the TIA, as in effect on the date of the Indenture governing such Notes. The Notes are subject to all such terms, and holders of the Notes are referred to the Indenture governing such Notes and the Securities Act for a statement of them. The following is a summary of the material terms and provisions of the Notes. This summary does not purport to be a complete description of the Notes and is subject to the detailed provisions of, and qualified in its entirety by reference to, the Notes and the Indentures (including the definitions contained therein). A copy of the Indentures may be obtained from the Company by any holder or prospective investor upon request. Definitions relating to certain capitalized terms are set forth under "-- Certain Definitions" and throughout this description. Capitalized terms that are used but not otherwise defined herein have the meanings assigned to them in the Indentures and such definitions are incorporated herein by reference. GENERAL The June Notes and the July Notes will be limited in aggregate principal amount to $250,000,000 and $150,000,000, respectively. The Notes will be general unsecured obligations of the Company, subordinated in right of payment to Senior Indebtedness of the Company and senior in right of payment to any current or future subordinated indebtedness of the Company. The Notes will be unconditionally guaranteed, on a senior subordinated basis, as to payment of principal, premium, if any, and interest, jointly and severally, by the Guarantors (together with each other Restricted Subsidiary which guarantees payment of the Notes pursuant to the covenant described under "Limitation on Creation of Subsidiaries"). MATURITY, INTEREST AND PRINCIPAL The Notes will mature on July 15, 2007. The Notes will bear interest at a rate of 9 1/8% per annum from the date of original issuance until maturity. Interest is payable semiannually in arrears on January 15 and July 15, commencing January 15, 1998, to holders of record of the Notes at the close of business on the immediately preceding January 1 and July 1, respectively. OPTIONAL REDEMPTION The Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after July 15, 2002 at the following redemption prices (expressed as a percentage of principal amount), together, in each case, with accrued and unpaid interest to the redemption date, if redeemed during the twelve-month period beginning on July 15 of each year listed below:
YEAR PERCENTAGE ---- ---------- 2002........................................................ 104.563% 2003........................................................ 103.042 2004........................................................ 101.521 2005 and thereafter......................................... 100.000
Notwithstanding the foregoing, the Company may redeem in the aggregate up to 35% of the original principal amount of the June Notes and/or July Notes at any time and from time to time prior to July 15, 2000 at a redemption price equal to 109.125% of the aggregate principal amount so redeemed, plus accrued interest to the redemption date, out of the Net Cash Proceeds of one or more Equity Offerings, where with respect to the June Notes, the proceeds to the Company of any such Equity Offering are at least $35.0 million; 27 31 provided, that at least (i) $162.5 million of the principal amount of the June Notes originally issued and (ii) $97.5 million of the principal amount of the July Notes originally issued, as the case may be, remains outstanding immediately after the occurrence of any such redemption and that any such redemption occurs within 60 days following the closing of any such Equity Offering. In the event of redemption of fewer than all of the June Notes and/or July Notes, as the case may be, the Trustee shall select by lot or in such other manner as it shall deem fair and equitable the Notes to be redeemed. The Notes will be redeemable in whole or in part upon not less than 30 nor more than 60 days prior written notice, mailed by first class mail to a holder's last address as it shall appear on the register maintained by the Registrar of the Notes. On and after any redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption unless the Company shall fail to redeem any such Note. SUBORDINATION The indebtedness represented by the Notes is, to the extent and in the manner provided in the Indenture, subordinate in right of payment to the prior indefeasible payment and satisfaction in full in cash of all existing and future Senior Indebtedness of the Company. At April 30, 1997, on a pro forma basis after giving effect to the Lemmerz Transactions, the principal amount of outstanding Senior Indebtedness of the Company, on a consolidated basis, would have been approximately $322.7 million. In the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, arrangement, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, whether voluntary or involuntary, or any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or any general assignment for the benefit of creditors or other marshalling of assets or liabilities of the Company (except in connection with the merger or consolidation of the Company or its liquidation or dissolution following the transfer of substantially all of its assets, upon the terms and conditions permitted under the circumstances described under "-- Merger, Consolidation or Sale of Assets") (all of the foregoing referred to herein individually as a "Bankruptcy Proceeding" and collectively as "Bankruptcy Proceedings"), the holders of Senior Indebtedness of the Company will be entitled to receive payment and satisfaction in full in cash of all amounts due on or in respect of all Senior Indebtedness of the Company before the holders of the Notes are entitled to receive or retain any payment or distribution of any kind on account of the Notes. In the event that, notwithstanding the foregoing, the Trustee or any holder of Notes receives any payment or distribution of assets of the Company of any kind, whether in cash, property or securities, including, without limitation, by way of set-off or otherwise, in respect of the Notes before all Senior Indebtedness of the Company is paid and satisfied in full in cash, then such payment or distribution will be held by the recipient in trust for the benefit of holders of Senior Indebtedness and will be immediately paid over or delivered to the holders of Senior Indebtedness or their representative or representatives to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of Senior Indebtedness. By reason of such subordination, in the event of liquidation or insolvency, creditors of the Company who are holders of Senior Indebtedness may recover more, ratably, than other creditors of the Company, and creditors of the Company who are not holders of Senior Indebtedness or of the Notes may recover more, ratably, than the holders of the Notes. No payment or distribution of any assets or securities of the Company or any Restricted Subsidiary of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes by the Company) may be made by or on behalf of the Company or any Restricted Subsidiary, including, without limitation, by way of set-off or otherwise, for or on account of the Notes, or for or on account of the purchase, redemption, defeasance or other acquisition of the Notes, and neither the Trustee nor any holder or owner of any Notes shall take or receive from the Company or any Restricted Subsidiary, directly or indirectly in any manner, payment in respect of all or any portion of the Notes following the delivery by the representative of the holders of Designated Senior Indebtedness under or in respect of the Amended Credit Agreement, for so long as there shall exist any Designated Senior Indebtedness under or in 28 32 respect of the Amended Credit Agreement, and thereafter, the holders of Designated Senior Indebtedness (in either such case, the "Representative") to the Trustee of written notice of (i) the occurrence of a Payment Default on Designated Senior Indebtedness or (ii) the occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness and the acceleration of the maturity of Designated Senior Indebtedness in accordance with its terms and in any such event, such prohibition shall continue until such Payment Default is cured, waived in writing or ceases to exist or such acceleration has been rescinded or otherwise cured. At such time as the prohibition set forth in the preceding sentence shall no longer be in effect, subject to the provisions of the following paragraph, the Company shall resume making any and all required payments in respect of the Notes, including any missed payments. Upon the occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness, no payment or distribution of any assets or securities of the Company of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes by the Company) may be made by or on behalf of the Company, including, without limitation, by way of set-off or otherwise, for or on account of the Notes, or for or on account of the purchase, redemption, defeasance or other acquisition of Notes, and neither the Trustee nor any holder or owner of any Notes shall take or receive from the Company, directly or indirectly in any manner, payment in respect of all or any portion of the Notes, for a period (a "Payment Blockage Period") commencing on the date of receipt by the Trustee of written notice from the Representative of such Non-Payment Event of Default unless and until (subject to any blockage of payments that may then be in effect under the preceding paragraph) the earliest of (x) more than 179 days shall have elapsed since receipt of such written notice by the Trustee, (y) such Non-Payment Event of Default shall have been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness shall have been paid in full or (z) such Payment Blockage Period shall have been terminated by written notice to the Company or the Trustee from the Representative, after which, in the case of clause (x), (y) or (z), the Company shall resume making any and all required payments in respect of the Notes, including any missed payments. Notwithstanding any other provision of the Indentures, in no event shall a Payment Blockage Period commenced in accordance with the provisions of the Indentures described in this paragraph extend beyond 179 days from the date of the receipt by the Trustee of the notice referred to above (the "Initial Blockage Period"). Any number of additional Payment Blockage Periods may be commenced during the Initial Blockage Period; provided, however, that no such additional Payment Blockage Period shall extend beyond the Initial Blockage Period. After the expiration of the Initial Blockage Period, no Payment Blockage Period may be commenced until at least 180 consecutive days have elapsed from the last day of the Initial Blockage Period. Notwithstanding any other provision of the Indentures, no event of default with respect to Designated Senior Indebtedness (other than a Payment Default) which existed or was continuing on the date of the commencement of any Payment Blockage Period initiated by the Representative shall be, or be made, the basis for the commencement of a second Payment Blockage Period initiated by the Representative, whether or not within the Initial Blockage Period, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days. Each Guarantee will, to the extent set forth in the Indentures, be subordinate in right of payment to the prior payment in full of all Senior Indebtedness of the respective Guarantor, including obligations of such Guarantor with respect to the Amended Credit Agreement (including any guarantee thereof), and will be subject to the rights of holders of Designated Senior Indebtedness of such Guarantor to initiate blockage periods, upon terms substantially comparable to the subordination of the Notes to all Senior Indebtedness of the Company. If the Company or any Guarantor fails to make any payment on the Notes or any Guarantee, as the case may be, when due or within any applicable grace period, whether or not on account of payment blockage provisions, such failure would constitute an Event of Default under the Indenture governing such Notes and would enable the holders of such Notes to accelerate the maturity thereof. See "-- Events of Default." A holder of Notes by his acceptance of Notes agrees to be bound by such provisions and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to 29 33 effectuate the subordination provided for in the Indenture and appoints the Trustee his attorney-in-fact for such purpose. CERTAIN COVENANTS The Indentures contain, among others, the following covenants. Except as otherwise specified, all of the covenants described below appear in both Indentures. Limitation on Additional Indebtedness The Company will not, and will not permit any Restricted Subsidiary of the Company to, directly or indirectly, incur (as defined) any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness. Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), if (i) after giving effect to the incurrence of such Indebtedness and the receipt and application of the proceeds thereof, the Company's Fixed Charge Coverage Ratio (determined on a pro forma basis for the last four fiscal quarters of the Company for which financial statements are available at the date of determination in accordance with the further provisions of this paragraph) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter and (ii) no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness. For purposes of computing the Fixed Charge Coverage Ratio, (A) if the Indebtedness which is the subject of a determination under this provision is Acquired Indebtedness, or Indebtedness incurred in connection with the simultaneous acquisition (by way of merger, consolidation or otherwise) of any Person, business, property or assets (an "Acquisition"), then such ratio shall be determined by giving effect to (on a pro forma basis, as if the transaction had occurred at the beginning of the four-quarter period used to make such calculation) to both the incurrence or assumption of such Acquired Indebtedness or such other Indebtedness and the inclusion in the Company's EBITDA of the EBITDA of the acquired Person, business, property or assets, (B) if any Indebtedness outstanding or to be incurred (x) bears a floating rate of interest, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account on a pro forma basis any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term as at the date of determination in excess of 12 months), (y) bears, at the option of the Company or a Restricted Subsidiary, a fixed or floating rate of interest, the interest expense on such Indebtedness shall be computed by applying, at the option of the Company or such Restricted Subsidiary, either a fixed or floating rate and (z) was incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period, (C) for any quarter prior to July 2, 1996 included in the calculation of such ratio, such calculation shall be made on a pro forma basis, giving effect to the acquisition by the Company of Motor Wheel, the issuance of the Notes, the incurrence of Indebtedness under the Credit Agreement and the use of the net proceeds therefrom as if the same had occurred at the beginning of the four-quarter period used to make such calculation, (D) for any quarter included in the calculation of such ratio prior to the date that any Asset Sale was consummated, or that any Indebtedness was incurred, or that any Acquisition was effected, by the Company or any of its Subsidiaries, such calculation shall be made on a pro forma basis, giving effect to each Asset Sale, incurrence of Indebtedness or Acquisition, as the case may be, and the use of any proceeds therefrom, as if the same had occurred at the beginning of the four quarter period used to make such calculation and (E) the Fixed Charge Coverage Ratio shall not take into account Permitted Indebtedness that is incurred at the same time as Indebtedness under this paragraph. Limitation on Foreign Indebtedness The Company will not permit any Restricted Subsidiary of the Company which is not a Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness set forth in clauses (i) through (x) and (xii) of the definition thereof unless (i) the Indebtedness is incurred, denominated and payable in the local currencies of the jurisdictions of the operations 30 34 of the Restricted Subsidiary incurring such Indebtedness or of the business or the location of assets being acquired with the proceeds of such Indebtedness; provided, however, that any Indebtedness permitted to be incurred in a Western European currency pursuant to this clause (i) may be incurred in any Western European currency; provided, further, that any Restricted Subsidiary whose operations are located in Mexico can also incur Indebtedness denominated and payable in U.S. dollars, (ii) after giving effect to the incurrence of such Indebtedness and the receipt of the application of the proceeds thereof, (A) if, as a result of the incurrence of such Indebtedness such Restricted Subsidiary will become subject to any restriction or limitation on the payment of dividends or the making of other distributions, (I) the ratio of Foreign EBITDA to Foreign Interest Expense (determined on a pro forma basis for the last four fiscal quarters for which financial statements are available at the date of determination) is greater than 3.0 to 1 and (II) the ratio of the Company's Adjusted EBITDA to Consolidated Fixed Charges (determined on a pro forma basis for the last four fiscal quarters of the Company for which financial statements are available at the date of determination) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter and (B) in any other case, the Company's Fixed Charge Coverage Ratio (determined on a pro forma basis for the last four fiscal quarters of the Company for which financial statements are available at the date of determination) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter, and (iii) no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness. In the event that any Indebtedness incurred pursuant to clause (ii)(B) of the foregoing paragraph is proposed to be amended, modified or otherwise supplemented such that the payment of dividends or the making of other distributions becomes subject in any manner to any restriction or limitation, the Company will not permit the Restricted Subsidiary to so amend, modify or supplement such Indebtedness unless such Indebtedness could be incurred pursuant to the terms of clause (ii)(A) of the foregoing paragraph. All calculations required under the prior two paragraphs hereof shall be made in a manner consistent with the calculations required under the covenant described under "Limitation on Additional Indebtedness." Limitation on Restricted Payments The Company will not make, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless: (a) no Default or Event of Default shall have occurred and be continuing at the time of or immediately after giving effect to such Restricted Payment; (b) immediately after giving pro forma effect to such Restricted Payment, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the covenant set forth under "Limitation on Additional Indebtedness"; and (c) immediately after giving effect to such Restricted Payment, the aggregate of all Restricted Payments declared or made after July 2, 1996 does not exceed the sum of (1) $5.0 million plus (2) 50% of the Company's Consolidated Net Income (or in the event that such Consolidated Net Income shall be a deficit, minus 100% of such deficit) after July 2, 1996, plus (3) 100% of the aggregate Net Cash Proceeds from the issue or sale, after July 2, 1996, of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be. For purposes of determining under this clause (c) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value. The provisions of this covenant shall not prohibit (i) the payment of any distribution within 60 days after the date of declaration thereof, if at such date of declaration such payment would comply with the provisions of the Indenture, (ii) the retirement of any shares of Capital Stock of the Company or Indebtedness which is subordinated in right of payment to the Notes by conversion into, or by or in exchange for, shares of Capital 31 35 Stock (other than Disqualified Capital Stock), or out of, the Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Capital Stock of the Company (other than Disqualified Capital Stock), (iii) the redemption, repayment or retirement of Indebtedness of the Company subordinated in right of payment to the Notes in exchange for, by conversion into, or out of the Net Cash Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (other than any Indebtedness owed to a Subsidiary) of the Company that is contractually subordinated in right of payment to the Notes to at least the same extent as the Indebtedness being redeemed, repaid or retired, (iv) the retirement of any shares of Disqualified Capital Stock by conversion into, or by exchange for, shares of Disqualified Capital Stock, or out of the Net Cash Proceeds of the substantially concurrent issuance or sale (other than to a Subsidiary of the Company) of other shares of Disqualified Capital Stock, or (v) the making of Investments in Unrestricted Subsidiaries and joint ventures, provided that the Net Investment therein made since July 2, 1996 shall not exceed an aggregate of $25 million and (vi) the making of Investments funded with the transfer of excess fixed assets no longer necessary in the conduct of the business of the Company and its Subsidiaries in an aggregate amount not to exceed $15 million; provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to July 2, 1996, the amount of Net Investments made pursuant to clauses (v) and (vi) shall be included in the calculation. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "Limitation on Restricted Payments" were computed, which calculations may be based upon the Company's latest available financial statements, and that no Default or Event of Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any Restricted Payments. Limitation on Other Senior Subordinated Debt The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any Indebtedness (other than the Notes and the Guarantees, as the case may be) that is both (i) subordinate in right of payment to any Senior Indebtedness of the Company or its Restricted Subsidiaries, as the case may be, and (ii) senior in right of payment to the Notes and the Guarantees, as the case may be. For purposes of this covenant, Indebtedness is deemed to be senior in right of payment to the Notes and the Guarantees, as the case may be, if it is not explicitly subordinate in right of payment to Senior Indebtedness at least to the same extent as the Notes and the Guarantees, as the case may be, are subordinate to Senior Indebtedness. Limitations on Liens The Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur or otherwise cause or suffer to exist or become effective any Liens of any kind upon any Property of the Company or any Restricted Subsidiary, now owned or hereafter acquired, which secures Indebtedness pari passu with or subordinated to the Notes unless (i) if such Lien secures Indebtedness which is pari passu with the Notes, then the Notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligation is no longer secured by a Lien or (ii) if such Lien secures Indebtedness which is subordinated to the Notes, any such Lien shall be subordinated to the Lien granted to the Holders of the Notes in the same collateral as that securing such Lien to the same extent as such subordinated Indebtedness is subordinated to the Notes. Limitation on Transactions with Affiliates The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or suffer to exist any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate (including entities in which the Company or any of its Restricted Subsidiaries own a minority interest) or holder of 10% or more of the Company's Common Stock (an "Affiliate Transaction") or extend, renew, waive or otherwise modify the terms of any Affiliate Transaction entered into prior to the date the respective Notes were originally issued 32 36 unless (i) such Affiliate Transaction is between or among the Company and its Wholly Owned Subsidiaries; or (ii) the terms of such Affiliate Transaction are fair and reasonable to the Company or such Restricted Subsidiary, as the case may be, and the terms of such Affiliate Transaction are at least as favorable as the terms which could be obtained by the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on an arm's-length basis between unaffiliated parties. In any Affiliate Transaction involving an amount or having a value in excess of $2 million which is not permitted under clause (i) above, the Company must obtain a resolution of the board of directors certifying that such Affiliate Transaction complies with clause (ii) above. In transactions with a value in excess of $10 million which are not permitted under clause (i) above, the Company or such Restricted Subsidiary must obtain a written opinion as to the fairness of such a transaction from an independent investment banking firm. The foregoing provisions will not apply to (i) any Restricted Payment that is not prohibited by the provisions described under "Limitations on Restricted Payments" contained herein, (ii) reasonable and customary fees paid by the Company or its Restricted Subsidiaries to their respective directors or (iii) customary investment banking, underwriting, placement agent or financial advisor fees paid in connection with services rendered to the Company or its Subsidiaries. Limitation on Creation of Subsidiaries The Company shall not create or acquire, nor permit any of its Restricted Subsidiaries to create or acquire, any Subsidiary other than (i) a Restricted Subsidiary existing as of the date of the Indenture, (ii) a Restricted Subsidiary conducting a business similar or reasonably related to the business of the Company and its Subsidiaries as conducted on the date the respective Notes were originally issued, or (iii) an Unrestricted Subsidiary; provided, however, that each Restricted Subsidiary which is a Domestic Subsidiary acquired or created pursuant to clause (ii) shall have executed a guarantee, satisfactory in form and substance to the Trustee (and with such documentation relating thereto as the Trustee shall require, including, without limitation, a supplement or amendment to the Indentures and opinions of counsel as to the enforceability of such guarantee), pursuant to which such Restricted Subsidiary shall become a Guarantor. Neither the Company nor any of the Guarantors will transfer any assets to a Domestic Restricted Subsidiary which is not a Guarantor unless such Restricted Subsidiary simultaneously with such transfer executes a guarantee satisfactory in form and substance to the Trustee (together with the documentation referred to in the preceding sentence) pursuant to which such Restricted Subsidiary shall become a Guarantor. See "-- General." Limitation on Certain Asset Sales The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or its Restricted Subsidiaries, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the fair market value thereof (as determined in good faith by the Company's board of directors, and evidenced by a board resolution); (ii) not less than 75% of the consideration received by the Company or its Subsidiaries, as the case may be, is in the form of cash or Temporary Cash Investments other than in the case where the Company or a Restricted Subsidiary is exchanging assets held by the Company or such Restricted Subsidiary for assets held by another Person, provided that any Investment received in such exchange would be permitted under clause (b) below; and (iii) the Asset Sale Proceeds received by the Company or such Restricted Subsidiary are applied (a) first, to the extent the Company elects, or is required, to prepay, repay or purchase any then existing Senior Indebtedness of the Company or any Restricted Subsidiary within 180 days following the receipt of the Asset Sale Proceeds from any Asset Sale, provided that any such repayment shall result in a permanent reduction of the commitments, if any, thereunder in an amount equal to the principal amount so repaid; (b) second, to repurchase 11% Notes within 270 days following the receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuant to the offer to repurchase required under the terms of the 11% Notes Indenture; (c) third, with respect to the July Notes, to repurchase the June Notes within 270 days following the receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuant to the offer to repurchase required under the terms of the June Indentures; (d) fourth, to the extent of the balance of Asset Sale Proceeds after application as described in clauses (a), (b) and, with respect to the July Notes, (c) above, to the extent the Company elects, 33 37 to an investment in assets used or useful in businesses similar or reasonably related to the business of the Company or Restricted Subsidiary as conducted on the date the respective Notes were originally issued (either directly or indirectly through the purchase of Capital Stock or other securities of a Person holding such assets), provided that such investment occurs or the Company or a Restricted Subsidiary enters into contractual commitments to make such investment, subject only to customary conditions (other than the obtaining of financing), on or prior to the 181st day following receipt of such Asset Sale Proceeds (the "Reinvestment Date") and Asset Sale Proceeds contractually committed are so applied within 270 days following the receipt of such Asset Sale Proceeds; and (e) fifth, if on the Reinvestment Date with respect to any Asset Sale, the Available Asset Sale Proceeds exceed $10 million, the Company shall apply an amount equal to such Available Asset Sale Proceeds to an offer to repurchase the Notes, at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (an "Excess Proceeds Offer"). If an Excess Proceeds Offer is not fully subscribed, the Company may retain the portion of the Available Asset Sale Proceeds not required to repurchase Notes. If the Company is required to make an Excess Proceeds Offer, the Company shall mail, within 30 days following the Reinvestment Date, a notice to the Holders stating, among other things: (1) that such Holders have the right to require the Company to apply the Available Asset Sale Proceeds to repurchase such Notes at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase; (2) the purchase date, which shall be no earlier than 30 days and not later than 60 days from the date such notice is mailed; and (3) the instructions, determined by the Company, that each Holder must follow in order to have such Notes repurchased. Limitation on Common Stock of Subsidiaries The Company will not (i) sell, pledge, hypothecate or otherwise convey or dispose of any Common Stock of a Restricted Subsidiary (other than under or in respect of the Amended Credit Agreement or under the terms of any Designated Senior Indebtedness and other than pledges of the Capital Stock of Restricted Subsidiaries that are not Guarantors securing Indebtedness of such Restricted Subsidiaries that are not Guarantors) or (ii) permit any of its Subsidiaries to issue any Common Stock, other than to the Company or a Wholly Owned Subsidiary of the Company. The foregoing restrictions shall not apply to an Asset Sale made in compliance with "Limitation on Certain Asset Sales." Payments for Consent Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indentures or the Notes unless such consideration is offered to be paid or agreed to be paid to all holders of the June Notes or July Notes, as the case may be, which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. CHANGE OF CONTROL OFFER Within 20 days of the occurrence of a Change of Control, the Company shall notify the Trustee in writing of such occurrence and shall make an offer to purchase (the "Change of Control Offer") the outstanding Notes at a purchase price equal to 101% of the principal amount thereof plus any accrued and unpaid interest thereon to the Change of Control Payment Date (as hereinafter defined) (such purchase price being hereinafter referred to as the "Change of Control Purchase Price") in accordance with the procedures set forth in this covenant. Within 20 days of the occurrence of a Change of Control, the Company also shall (i) cause a notice of the Change of Control Offer to be sent at least once to the Dow Jones News Service or similar business news service in the United States and (ii) send by first-class mail, postage prepaid, to the Trustee and to each 34 38 holder of the Notes, at the address appearing in the register maintained by the Registrar of the Notes, a notice stating: (1) that the Change of Control Offer is being made pursuant to this covenant and that all Notes tendered will be accepted for payment, and otherwise subject to the terms and conditions set forth therein; (2) the Change of Control Purchase Price and the purchase date (which shall be a Business Day no earlier than 20 business days from the date such notice is mailed (the "Change of Control Payment Date")); (3) that any Note not tendered will continue to accrue interest; (4) that, unless the Company defaults in the payment of the Change of Control Purchase Price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that holders accepting the offer to have their Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Change of Control Payment Date; (6) that holders will be entitled to withdraw their acceptance if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Notes delivered for purchase, and a statement that such holder is withdrawing his election to have such Notes purchased; (7) that holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, provided that each Note purchased and each such new Note issued shall be in an original principal amount in denominations of $1,000 and integral multiples thereof; (8) any other procedures that a holder must follow to accept a Change of Control Offer or effect withdrawal of such acceptance; and (9) the name and address of the Paying Agent. On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Trustee Notes so accepted together with an Officers' Certificate stating the Notes or portions thereof tendered to the Company. The Paying Agent shall promptly mail to each holder of Notes so accepted payment in an amount equal to the purchase price for such Notes, and the Company shall execute and issue, and the Trustee shall promptly authenticate and mail to such holder, a new Note equal in principal amount to any unpurchased portion of the Notes surrendered; provided that each such new Note shall be issued in an original principal amount in denominations of $1,000 and integral multiples thereof. The Indentures require that if the Amended Credit Agreement is in effect, or any amounts are owing thereunder or in respect thereof, at the time of the occurrence of a Change of Control, prior to the mailing of the notice to holders described in the preceding paragraph, but in any event within 30 days following any Change of Control, the Company covenants to (i) repay in full all obligations under or in respect of the Amended Credit Agreement or offer to repay in full all obligations under or in respect of the Amended Credit Agreement and repay the obligations under or in respect of the Amended Credit Agreement of each lender who has accepted such offer or (ii) obtain the requisite consent under the Amended Credit Agreement to permit the repurchase of the Notes as described above. The Company must first comply with the covenant described in the preceding sentence before it shall be required to purchase Notes in the event of a Change of Control; provided that the Company's failure to comply with the covenant described in the preceding sentence 35 39 constitutes an Event of Default described in clause (iii) under "Events of Default" below if not cured within 60 days after the notice required by such clause. As a result of the foregoing, a holder of the Notes may not be able to compel the Company to purchase the Notes unless the Company is able at the time to refinance all of the obligations under or in respect of the Amended Credit Agreement or obtain requisite consents under the Amended Credit Agreement. Failure by the Company to make a Change of Control Offer when required by the Indentures constitutes a default under the Indentures and, if not cured within 60 days after notice, constitutes an Event of Default. The Indentures provide that, (A) if the Company or any Subsidiary thereof has issued any outstanding (i) Indebtedness that is subordinated in right of payment to the Notes or (ii) Preferred Stock, and the Company or such Subsidiary is required to make a Change of Control Offer or to make a distribution with respect to such subordinated Indebtedness or Preferred Stock in the event of a change of control, the Company shall not consummate any such offer or distribution with respect to such subordinated Indebtedness or Preferred Stock until such time as the Company shall have paid the Change of Control Purchase Price in full to the holders of Notes that have accepted the Company's Change of Control Offer and shall otherwise have consummated the Change of Control Offer made to holders of the Notes and (B) the Company will not issue Indebtedness that is subordinated in right of payment to the Notes or Preferred Stock with change of control provisions requiring the payment of such Indebtedness or Preferred Stock prior to the payment of the Notes in the event of a Change in Control under the Indentures. In the event that a Change of Control occurs and the holders of Notes exercise their right to require the Company to purchase Notes, if such purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act at that time, the Company will comply with the requirements of Rule 14e-1 as then in effect with respect to such repurchase. MERGER, CONSOLIDATION OR SALE OF ASSETS The Company will not and will not permit any Guarantor to consolidate with, merge with or into, or transfer all or substantially all of its assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any Person unless: (i) the Company or the Guarantor, as the case may be, shall be the continuing Person, or the Person (if other than the Company or the Guarantor) formed by such consolidation or into which the Company or the Guarantor, as the case may be, is merged or to which the properties and assets of the Company or the Guarantor, as the case may be, are transferred shall be a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of the Company or the Guarantor, as the case may be, under the Notes and the Indentures, and the obligations under the Indentures shall remain in full force and effect; (ii) immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (iii) immediately after giving effect to such transaction on a pro forma basis the Company or such Person could incur at least $1.00 additional Indebtedness (other than Permitted Indebtedness) under the covenant set forth under "Limitation on Additional Indebtedness," provided that a Person that is a Guarantor may merge into the Company or another Person that is a Guarantor without complying with this clause (iii). In connection with any consolidation, merger or transfer of assets contemplated by this provision, the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and the supplemental indenture in respect thereto comply with this provision and that all conditions precedent herein provided for relating to such transaction or transactions have been complied with. GUARANTEES The Notes will be guaranteed on a senior subordinated basis by the Guarantors. All payments pursuant to the Guarantees by the Guarantors are subordinated in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor, to the same extent and in the same manner that all payments pursuant 36 40 to the Notes are subordinated in right of payment to the prior payment in full of all Senior Indebtedness of the Company. The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, without limitation, any guarantees of Senior Indebtedness) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indentures, result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Guarantor that makes a payment or distribution under a Guarantee shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. A Guarantor shall be released from all of its obligations under its Guarantee if all or substantially all of its assets are directly or indirectly sold or all of its Capital Stock is directly or indirectly sold, in all such cases in a transaction in compliance with the covenant described under "Limitation on Certain Asset Sales," or the Guarantor merges with or into or consolidates with, or transfers all or substantially all of its assets to, the Company or another Guarantor in a transaction in compliance with "Merger, Consolidation or Sale of Assets," and such Guarantor has delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent herein provided for relating to such transaction have been complied with. EVENTS OF DEFAULT The following events are defined in the Indentures as "Events of Default": (i) default in payment of any principal of, or premium, if any, on the June Notes or July Notes, as the case may be; (ii) default for 30 days in payment of any interest on the June Notes or July Notes, as the case may be; (iii) default by the Company or any Guarantor in the observance or performance of any other covenant (i) in the June Notes or the June Indenture (ii) or the July Notes or the July Indenture, as the case may be, for 60 days after written notice from the Trustee or the holders of not less than 25% in aggregate principal amount of such Notes then outstanding; (iv) default in the payment at final maturity of principal in an aggregate amount of $10,000,000 or more with respect to any Indebtedness of the Company or any Restricted Subsidiary thereof which default shall not be cured, waived or postponed pursuant to an agreement with the holders of such Indebtedness within 60 days after written notice, or the acceleration of any such Indebtedness aggregating $10,000,000 or more which acceleration shall not be rescinded or annulled within 20 days after written notice as provided in the Indenture; (v) any final judgment or judgments which can no longer be appealed for the payment of money in excess of $10,000,000 shall be rendered against the Company or any Restricted Subsidiary thereof, and shall not be discharged for any period of 60 consecutive days during which a stay of enforcement shall not be in effect; and (vi) certain events involving bankruptcy, insolvency or reorganization of the Company or any Restricted Subsidiary thereof. The Indenture provides that the Trustee may withhold notice to the holders of the Notes of any default (except in payment of principal or premium, if any, or interest on the Notes) if the Trustee considers it to be in the best interest of the holders of the Notes to do so. The Indentures provide that if an Event of Default (other than an Event of Default resulting from certain events of bankruptcy, insolvency or reorganization of the Company) shall have occurred and be continuing, then the Trustee or the holders of not less than 25% in aggregate principal amount of the June Notes or the 37 41 July Notes, as the case may be, then outstanding may declare to be immediately due and payable the entire principal amount of all such Notes then outstanding plus accrued interest to the date of acceleration and (i) such amounts shall become immediately due and payable or (ii) if there are any amounts outstanding under or in respect of the Amended Credit Agreement, such amounts shall become due and payable upon the first to occur of an acceleration of amounts outstanding under or in respect of the Amended Credit Agreement or five business days after receipt by the Company and the Representative of the holders of Senior Indebtedness under or in respect of the Amended Credit Agreement of notice of the acceleration of the Notes; provided, however, that after such acceleration but before a judgment or decree based on acceleration is obtained by the Trustee, the holders of a majority in aggregate principal amount of such outstanding Notes may, under certain circumstances, rescind and annul such acceleration if all Events of Default, other than nonpayment of accelerated principal, premium or interest, have been cured or waived as provided in the Indenture governing such Notes. In case an Event of Default resulting from certain events of bankruptcy, insolvency or reorganization of the Company shall occur, the principal, premium and interest amount with respect to all of the Notes shall be due and payable immediately without any declaration or other act on the part of the Trustee or the holders of the Notes. The holders of a majority in principal amount of the June Notes or the July Notes, as the case may be, then outstanding shall have the right to waive any existing default or compliance with any provision of such Notes or the Indenture governing such Notes and to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, subject to certain limitations specified in such Indenture. No holder of any Note will have any right to institute any proceeding with respect to the Indentures or for any remedy thereunder, unless such holder shall have previously given to the Trustee written notice of a continuing Event of Default and unless also the holders of at least 25% in aggregate principal amount of the outstanding June Notes or July Notes, as the case may be, shall have made a written request and offered reasonable indemnity to the Trustee to institute such proceeding as a trustee, and unless the Trustee shall not have received from the holders of a majority in aggregate principal amount of such outstanding Notes a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. However, such limitations do not apply to a suit instituted on such Note on or after the respective due dates expressed in such Note. DEFEASANCE AND COVENANT DEFEASANCE The Indentures provide the Company may elect either (a) to defease and be discharged from any and all obligations with respect to the Notes (except for the obligations to register the transfer or exchange of such Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office or agency in respect of the Notes and to hold monies for payment in trust) ("defeasance") or (b) to be released from their obligations with respect to the Notes under certain covenants contained in the Indentures and described above under "-- Certain Covenants" ("covenant defeasance"), upon the deposit with the Trustee (or other qualifying trustee), in trust for such purpose, of money and/or U.S. Government Obligations which through the payment of principal and interest in accordance with their terms will provide money, in an amount sufficient to pay the principal of, premium, if any, and interest on the Notes, on the scheduled due dates therefor or on a selected date of redemption in accordance with the terms of the Indentures. Such a trust may only be established if, among other things, the Company has delivered to the Trustee an Opinion of Counsel (as specified in the Indentures) (i) to the effect that neither the trust nor the Trustee will be required to register as an investment company under the Investment Company Act of 1940, as amended, and (ii) to the effect that holders of the Notes or persons in their positions will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred which in the case of discharge only, must be based upon a private ruling concerning the Notes, a published ruling of the Internal Revenue Service or a change in applicable federal tax law. 38 42 MODIFICATION OF INDENTURE From time to time, the Company, the Guarantors and the Trustee may, without the consent of holders of the Notes, amend the Indentures or the Notes or supplement the Indentures for certain specified purposes, including providing for uncertificated Notes in addition to certificated Notes, and curing any ambiguity, defect or inconsistency, or making any other change that does not materially and adversely affect the rights of any holder. The Indentures contain provisions permitting the Company, the Guarantors and the Trustee, with the consent of holders of at least a majority in principal amount of the outstanding Notes governed by such Indenture, to modify or supplement such Indenture or such Notes, except that no such modification shall, without the consent of each holder affected thereby, (i) reduce the amount of such Notes whose holders must consent to an amendment, supplement, or waiver to such Indenture or such Notes, (ii) reduce the rate of or change the time for payment of interest on any such Note, (iii) reduce the principal of or premium on or change the stated maturity of any such Note, (iv) make any such Note payable in money other than that stated in such Note or change the place of payment from New York, New York, (v) change the amount or time of any payment required by such Notes or reduce the premium payable upon any redemption of such Notes, or change the time before which no such redemption may be made, (vi) waive a default on the payment of the principal of, interest on, or redemption payment with respect to any such Note, or (vii) take any other action otherwise prohibited by such Indenture to be taken without the consent of each holder affected thereby. REPORTS TO HOLDERS So long as the Company is subject to the periodic reporting requirements of the Exchange Act, it will continue to furnish the information required thereby to the Commission and to the holders of the Notes. The Indentures provide that even if the Company is entitled under the Exchange Act not to furnish such information to the Commission or to the holders of the Notes, they will nonetheless continue to furnish such information to the Commission and holders of the Notes. COMPLIANCE CERTIFICATE The Company will deliver to the Trustee on or before 100 days after the end of the Company's fiscal year and on or before 50 days after the end of each of the first, second and third fiscal quarters in each year an Officers' Certificate stating whether or not the signers know of any Default or Event of Default that has occurred. If they do, the certificate will describe the Default or Event of Default and its status. THE TRUSTEE The Trustee under the Indentures will be the Registrar and Paying Agent with regard to the Notes. The Indentures provide that, except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indentures. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it under the Indentures and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. TRANSFER AND EXCHANGE Holders of the Notes may transfer or exchange Notes in accordance with the Indenture governing such Notes. The Registrar under such Indenture may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and to pay any taxes and fees required by law or permitted by such Indenture. The Registrar is not required to transfer or exchange any Note selected for redemption. Also, the Registrar is not required to transfer or exchange any Note for a period of 15 days before selection of the Notes to be redeemed. The registered holder of a Note may be treated as the owner of it for all purposes. 39 43 REGISTRATION RIGHTS Holders of New Notes are not generally entitled to any registration rights with respect to such New Notes. Pursuant to the Registration Rights Agreement, dated as of June 30, 1997, by and among the Company, the Guarantors and the Initial Purchasers of the Old June Notes and the Registration Rights Agreement, dated as of July 22, 1997, by and among the Company, the Guarantors and the Initial Purchasers of the Old July Notes (collectively, the "Registration Rights Agreements"). Holders of Old Notes are entitled to certain registration rights. Under the Registration Rights Agreements, the Company agreed, for the benefit of the Holders of the Old Notes, that it will, at its cost, (i) within 60 days after the date such Notes were first issued, file a Registration Statement with the Commission with respect to the Exchange Offer, and (ii) within 120 days after the date such Notes were first issued, use its best efforts to cause the Registration Statement to be declared effective under the Securities Act. The registration statement of which this Prospectus is a part constitutes the Registration Statement. In the event that applicable interpretations of the staff of the Commission do not permit the Company to effect an Exchange Offer, or if for any other reason the Exchange Offer is not consummated within 150 days of the date such Notes were first issued, the Company will, at its own expense, (a) as promptly as practicable, file a Shelf Registration Statement, (b) use its best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act and (c) use its best efforts to keep effective the Shelf Registration Statement until two years after its effective date (subject to extension in certain circumstances), or such shorter period ending when all Old Notes covered by the Shelf Registration Statement have been sold thereunder (the "Effectiveness Period"). The Company will, in the event of the Shelf Registration Statement, provide to each Holder of the Old Notes copies of the prospectus which is a part of the Shelf Registration Statement, notify each such Holder when the Shelf Registration Statement for the Old Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. A Holder of the Old Notes that sells such Old Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreements which are applicable to such a holder (including certain indemnification rights and obligations). In the event of a Registration Default under and as defined in the Registration Rights Agreements, the sole remedy available to Holders of the Old Notes will be the assessment of additional interest as follows: the per annum interest rate on the Old Notes will increase by 50 basis points; and the per annum interest rate will increase by an additional 25 basis points for each subsequent 90-day period during which the Registration Default remains uncured, up to a maximum additional interest rate of 200 basis points per annum in excess of 9 1/8% ("Additional Interest"). All Additional Interest will be payable to Holders of the Old Notes in cash on each January 15 and July 15, commencing with the first such date occurring after any such Additional Interest commences to accrue, until such Registration Default is cured. After the date on which such Registration Default is cured, the interest rate on the Old Notes will refer to the interest rate originally borne by the Old Notes. The summary herein of certain provisions of the Registration Rights Agreements does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part. CERTAIN DEFINITIONS Unless otherwise provided, set forth below is a summary of certain of the defined terms used in the covenants contained in both Indentures. Reference is made to the June Indenture and the July Indenture, respectively, for the full definition of all such terms as well as any other capitalized terms used herein for which no definition is provided. "9 1/8% Notes" under the July Indenture means the June Notes. 40 44 "9 1/8% Notes Indenture" under the July Indenture means the June Indenture, as such indenture may be amended, modified or supplemented from time to time. "11% Notes" under the July Indenture means the 11% Notes. "11% Notes Indenture" under the July Indenture means the Indenture, dated as of July 2, 1996, among the Company, the Guarantors and Comerica Bank, as Trustee, as such indenture may be amended, modified or supplemented from time to time. "Acquired Indebtedness" means Indebtedness of a Person (including an Unrestricted Subsidiary) existing at the time such Person becomes a Restricted Subsidiary or is merged or consolidated with or into the Company or a Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person. "Adjusted EBITDA" means, for any Person, for any period, the EBITDA of such Person, plus any amounts excluded from the calculation of the Consolidated Net Income of such Person pursuant to clause (b) of the definition thereof. "Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities (including, without limitation, any guarantees of Senior Indebtedness)), but excluding liabilities under the Guarantee, of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts (after giving effect to all other fixed and contingent liabilities (including, without limitation, any guarantees of Senior Indebtedness) and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Subsidiary under the Guarantee), excluding Indebtedness in respect of the Guarantee, as they become absolute and matured. "Affiliate" of any specified Person means any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. "Amended Credit Agreement" means the Amended Credit Agreement, dated as of June 30, 1997, among the Company, CIBC, as administrative agent, Merrill Capital, as documentation agent, and the lenders from time to time parties thereto, as such agreement may be amended, modified or supplemented from time to time or deferred, renewed, extended, refunded, refinanced, restructured or replaced from time to time in whole or in part (whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the Amended Credit Agreement or other credit agreements or otherwise). "Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C. "Asset Sale" means the sale, transfer or other disposition in any single transaction or series of related transactions of (a) any Capital Stock of or other equity interest in any Restricted Subsidiary of the Company, (b) all or substantially all of the assets of the Company or of any Restricted Subsidiary thereof, (c) real property or (d) all or substantially all of the assets of any business owned by the Company or any Restricted Subsidiary thereof, or a division, line of business or comparable business segment of the Company or any Restricted Subsidiary thereof; provided that Asset Sales shall not include (i) sales, leases, conveyances, transfers or other dispositions to the Company or to a Restricted Subsidiary or to any other Person if after giving effect to such sale, lease, conveyance, transfer or other disposition such other Person becomes a Restricted Subsidiary, (ii) leases, conveyances or other transfers by the Company or a Restricted Subsidiary of Property to any Person as an Investment in such Person provided that the Company or such Restricted Subsidiary receives consideration at the time of such lease, conveyance or other transfer at least equal to the fair market value of such Property and such Investment is included in clause (v) of the second paragraph of "Limitation on Restricted Payments" contained herein. 41 45 "Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash received by the Company or any Restricted Subsidiary from such Asset Sale (including cash received as consideration for the assumption of liabilities incurred in connection with or in anticipation of such Asset Sale), after (a) provision for all income or other taxes measured by or resulting from such Asset Sale, (b) payment of all brokerage commissions, underwriting and other fees and expenses related to such Asset Sale, (c) provision for minority interest holders in any Restricted Subsidiary as a result of such Asset Sale and (d) deduction of appropriate amounts to be provided by the Company or a Restricted Subsidiary as a reserve, in accordance with GAAP, against any liabilities associated with the assets sold or disposed of in such Asset Sale and retained by the Company or a Restricted Subsidiary after such Asset Sale, including, without limitation, pension and other post employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with the assets sold or disposed of in such Asset Sale, and (ii) promissory notes and other non-cash consideration received by the Company or any Restricted Subsidiary from such Asset Sale or other disposition upon the liquidation or conversion of such notes or non-cash consideration into cash. "Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value of the notes (discounted according to GAAP at the cost of indebtedness implied in the lease) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease Back Transaction (including any period for which such lease has been extended). "Available Asset Sale Proceeds" means, with respect to any Asset Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not been applied in accordance with clause (iii)(a), (iii)(b), (iii)(c) (with respect to the July Notes) or (iii)(d), and that have not been the basis for an Excess Proceeds Offer in accordance with clause (iii)(e), of the first paragraph of "Certain Covenants -- Limitation on Certain Asset Sales." "Capital Stock" means, with respect to any Person, any and all shares or other equivalents (however designated) of capital stock, partnership interests or any other participation, right or other interest in the nature of an equity interest in such Person or any option, warrant or other security convertible into any of the foregoing. "Capitalized Lease Obligations" means indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of such indebtedness shall be the capitalized amount of such obligations determined in accordance with GAAP. A "Change of Control" of the Company will be deemed to have occurred at such time as (i) any Person (including a Person's Affiliates and associates), other than a Permitted Holder, becomes the beneficial owner (as defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of 50% or more of the total voting power of the Company's Common Stock, (ii) any Person (including a Person's Affiliates and associates), other than a Permitted Holder, becomes the beneficial owner of more than 30% of the total voting power of the Company's Common Stock, and either (A) the Permitted Holders beneficially own, in the aggregate, a lesser percentage of the total voting power of the Common Stock of the Company than such other Person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company or (B) JLL is the beneficial owner of less than 20% of the total voting power of the Company's Common Stock, (iii) there shall be consummated any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which the Common Stock of the Company would be converted into cash, securities or other property, other than a merger or consolidation of the Company in which the holders of the Common Stock of the Company outstanding immediately prior to the consolidation or merger hold, directly or indirectly, at least a majority of the Common Stock of the surviving corporation immediately after such consolidation or merger, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company has been approved by 66 2/3% of the directors then still in office who either were directors at the beginning of such 42 46 period or whose election or recommendation for election was previously so approved) cease to constitute a majority of the Board of Directors of the Company. "Chase" means Chase Equity Associates, L.P. "Common Stock" of any Person means all Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management and policies of such Person. "Consolidated Fixed Charges" means, with respect to any Person, the sum of a Person's (i) Consolidated Interest Expense, plus (ii) the product of (x) the aggregate amount of all dividends paid on Disqualified Capital Stock of the Company or on each series of preferred stock of each Subsidiary of such Person (other than dividends paid or payable in additional shares of preferred stock or to the Company or any of its Wholly-Owned Subsidiaries) times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective combined federal, state and local tax rate of such Person (expressed as a decimal), in each case, for such four-quarter period. "Consolidated Interest Expense" means, with respect to any Person, for any period and without duplication, the aggregate amount of interest which, in conformity with GAAP, would be set forth opposite the caption "interest expense" or any like caption on an income statement for such Person and its Subsidiaries on a consolidated basis (including, but not limited to, (i) imputed interest included in Capitalized Lease Obligations, (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (iii) net payments made in connection with Interest Rate Agreements, (iv) the interest portion of any deferred payment obligation, (v) amortization of discount or premium, if any, and (vi) all other non-cash interest expense (other than interest amortized to cost of sales)) plus all net capitalized interest for such period and all interest paid under any guarantee of Indebtedness (including a guarantee of principal, interest or any combination thereof) of any Person, and minus (i) net payments received in connection with Interest Rate Agreements and (ii) amortization of deferred financing costs and expenses. "Consolidated Net Income" means, with respect to any Person, for any period, the aggregate of the net income (before preferred stock dividends, if any) of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided, however, that there shall be excluded from Consolidated Net Income (a) the net income of any Person which under GAAP is not consolidated with the Person in question other than the amount of dividends or distributions paid to the Person in question or the Subsidiary, (b) the net income of any Subsidiary of the Person in question, other than a Domestic Subsidiary, that is subject to any restriction or limitation on the payment of dividends or the making of other distributions (other than pursuant to the Notes or the Indenture) to the extent of such restriction or limitation (provided that if any such restriction or limitation by its terms takes effect upon the occurrence of a default or an event of default, such exclusion shall become effective only upon the occurrence and during the continuance of such default or event of default), (c) the net income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition, (d) any net gain or loss resulting from a sale of Property by the Person in question or any of its Subsidiaries other than in the ordinary course of business, (e) extraordinary gains and losses, (f) non-recurring gains, non-cash non-recurring losses and charges (including restructuring charges and costs) and, in the case of the Company, cash restructuring charges for any period prior to July 31, 1998, (g) any amounts received by the Company or a Restricted Subsidiary which are used to offset Investments pursuant to the terms of clause (ii) of the definition of "Net Investments" and (h) in the case of clauses (d), (e) and (f), the associated tax effects during such period. "Designated Senior Indebtedness," as to the Company or any Guarantor, as the case may be, means any Senior Indebtedness (a) under or in respect of the Amended Credit Agreement, or (b) which at the time of determination exceeds $25 million in aggregate principal amount (or accreted value in the case of Indebtedness issued at a discount) outstanding or available under a committed facility, and (i) which is specifically designated in the instrument evidencing such Senior Indebtedness as "Designated Senior 43 47 Indebtedness" by such Person and (ii) as to which the Trustee has been given written notice of such designation. "Disqualified Capital Stock" means any Capital Stock of the Company or a Restricted Subsidiary thereof which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Notes, for cash or securities constituting Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock shall be deemed to include any Preferred Stock of a Restricted Subsidiary of the Company or the Company, under which, by agreement or otherwise, such Restricted Subsidiary or the Company is obligated to pay current dividends or distributions in cash during the period prior to the maturity date of the Notes; provided, however, that Preferred Stock of the Company or any Restricted Subsidiary thereof that is issued with the benefit of provisions requiring a change of control offer to be made for such Preferred Stock in the event of a change of control of the Company or Restricted Subsidiary, which provisions have substantially the same effect as the provisions of the Indenture described under "Change of Control," shall not be deemed to be Disqualified Capital Stock solely by virtue of such provisions and, provided, further, that Capital Stock owned by the Company or any Restricted Subsidiary shall not constitute Disqualified Capital Stock. "Domestic" with respect to any Person shall mean a Person whose jurisdiction of incorporation or formation is the United States, any state thereof or the District of Columbia. "EBITDA" means, for any Person, for any period, an amount equal to (a) the sum of (i) Consolidated Net Income for such period, plus (ii) the provision for taxes for such period based on income or profits to the extent such income or profits were included in computing Consolidated Net Income and any provision for taxes utilized in computing net loss under clause (i) hereof, plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation for such period, plus (v) amortization for such period (including the amortization of deferred financing costs and expenses), plus (vi) any other non-cash items (including minority interests) reducing Consolidated Net Income for such period, plus (vii) non-recurring losses and charges (including restructuring charges and costs) whether cash or non-cash for such period to the extent not included in the calculation of Consolidated Net Income, minus (viii) all non-cash items increasing Consolidated Net Income for such period, all for such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP, except that with respect to the Company each of the foregoing items shall be determined on a consolidated basis with respect to the Company and its Restricted Subsidiaries only. "Equity Offering" means an offering by the Company of shares of its common stock (however designated and whether voting or non-voting) and any and all rights, warrants or options to acquire such common stock. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Indenture" under the June Indenture means the Indenture, dated as of July 2, 1996, among the Company, the Guarantors and Comerica Bank, as Trustee, as such indenture may be amended, modified or supplemented from time to time. "Existing Notes" under the June Indenture means the 11% Notes. "Fixed Charge Coverage Ratio" of any Person means, with respect to any determination date, the ratio of (i) EBITDA for such Person's prior four full fiscal quarters for which financial results have been reported immediately preceding the determination date, to (ii) Consolidated Fixed Charges of such Person. "Foreign EBITDA" means, for any period, the aggregate of the EBITDA of each of the Company's Restricted Subsidiaries which are not Guarantors. "Foreign Interest Expense" means, for any period, the aggregate of the Consolidated Interest Expense of each of the Company's Restricted Subsidiaries which are not Guarantors. 44 48 "GAAP" means generally accepted accounting principles consistently applied as in effect in the United States from time to time. "incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such person (and "incurrence," "incurred," "incurrable," and "incurring" shall have meanings correlative to the foregoing); provided that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an incurrence of such Indebtedness. "Indebtedness" means (without duplication), with respect to any Person, any indebtedness at any time outstanding, secured or unsecured, contingent or otherwise, which is for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments or representing the balance deferred and unpaid of the purchase price of any property (excluding, without limitation, any balances that constitute accounts payable or trade payables, and other accrued liabilities arising in the ordinary course of business) if and to the extent any of the foregoing indebtedness would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and shall also include, to the extent not otherwise included, (i) any Capitalized Lease Obligations, (ii) obligations of others secured by a lien to which the property or assets owned or held by such Person is subject, whether or not the obligation or obligations secured thereby shall have been assumed, (iii) guarantees of obligations of other Persons which would be included within this definition for such other Persons (whether or not such items would appear upon the balance sheet of the guarantor), (iv) all obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (v) in the case of the Company, Disqualified Capital Stock and, in the case of any Restricted Subsidiary, Preferred Stock, (vi) obligations of any such Person under any Interest Rate Agreement (if and to the extent such Interest Rate Agreement obligations would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP) and (vii) Attributable Indebtedness. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided (i) that the amount outstanding at any time of any Indebtedness issued with original issue discount is the principal amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP and (ii) that Indebtedness shall not include any liability for federal, state, local or other taxes. Notwithstanding any other provision of the foregoing definition, any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business shall not be deemed to be "Indebtedness" of the Company or any Restricted Subsidiaries for purposes of this definition. Furthermore, guarantees of (or obligations with respect to letters of credit supporting) Indebtedness and Liens securing Indebtedness otherwise included in the determination of such amount shall not also be included. "Interest Rate Agreement" means, for any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement designed to protect the party indicated therein against fluctuations in interest rates. "Investments" means, directly or indirectly, any advance, account receivable, loan or capital contribution to (by means of transfers of property to others, payments for property or services for the account or use of others or otherwise), the purchase of any stock, bonds, notes, debentures, partnership or joint venture interests or other securities of, the acquisition, by purchase or otherwise, of all or substantially all of the business or assets or stock or other evidence of beneficial ownership of, any Person. Investments shall exclude extensions of trade credit on commercially reasonable terms in accordance with normal trade practices. "Issue Date" means the date the Notes governed by such Indenture are first issued by the Company and authenticated by the Trustee under such Indenture. "JLL" means Joseph, Littlejohn & Levy Fund II, L.P. 45 49 "Lien" means with respect to any Property of any Person, any mortgage or deed of trust, pledge, hypothecation, deposit arrangement, security interest, lien, charge, encumbrance, preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or assets (including without limitation, any Capitalized Lease Obligation, conditional sales, or other title retention agreement having substantially the same economic effect as any of the foregoing). "Net Cash Proceeds" means (a) in the case of any sale of Capital Stock by the Company, the aggregate net cash proceeds received by the Company, after payment of expenses, commissions, underwriting discounts and the like incurred in connection therewith, (b) in the case of any exchange, exercise, conversion or surrender of outstanding securities of any kind for or into shares of Capital Stock of the Company which is not Disqualified Capital Stock, the net cash proceeds received from the sale of such outstanding securities so exchanged, exercised, converted or surrendered (plus any additional amount required to be paid in cash by the holder to the Company upon such exchange, exercise, conversion or surrender, less any and all payments made to the holders, e.g., on account of fractional shares and less all expenses incurred by the Company in connection therewith) and (c) in the case of any issuance of any Indebtedness by the Company or any Restricted Subsidiary, the aggregate net cash proceeds received by such Person after payment of expenses, commissions, underwriting discounts and the like incurred in connection therewith. "Net Investment" means the excess of (i) the aggregate amount of all Investments in Unrestricted Subsidiaries or joint ventures made by the Company or any Restricted Subsidiary on or after the Original Issue Date (in the case of an Investment made other than in cash, the amount shall be the fair market value of such Investment as determined in good faith by the board of directors of the Company or such Restricted Subsidiary) over (ii) the sum of (A) the aggregate amount returned in cash on or with respect to such Investments whether through interest payments, principal payments, dividends or other distributions or payments and (B) the Net Cash Proceeds received by the Company or any Restricted Subsidiary or joint venture from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company); provided, however, that with respect to all Investments made in any Unrestricted Subsidiary or joint venture the sum of clauses (A) and (B) above with respect to such Investments shall not exceed the aggregate amount of all such Investments made in such Unrestricted Subsidiary. "Nomura" means Nomura Holding America, Inc. "Non-Payment Event of Default" means any event (other than a Payment Default) the occurrence of which entitles one or more Persons to accelerate the maturity of any Designated Senior Indebtedness. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chief Executive Officer, the President or any Vice President, and the Chief Financial Officer or any Treasurer of such Person that shall comply with applicable provisions of such Indenture. "Original Issue Date" means (i) July 2, 1997, under the June Indenture and (ii) July 16, 1997, under the July Indenture. "Payment Default" means any default, whether or not any requirement for the giving of notice, the lapse of time or both, or any other condition to such default becoming an Event of Default has occurred, in the payment of principal of (or premium, if any) or interest on or any other amount payable in connection with Designated Senior Indebtedness. "Permitted Holders" means (i) JLL or any other fund controlled by Joseph Littlejohn & Levy, (ii) TSG, (iii) Argosy, (iv) Nomura and (v) Chase. "Permitted Indebtedness" means: (i) Indebtedness of the Company or any Domestic Restricted Subsidiary arising under or in respect of the Amended Credit Agreement in an aggregate amount (the "Permitted Credit Agreement Amount") not to exceed (A) $740,500,000, under the June Indenture and $590,500,000, under the July Indenture (which gives effect to the concurrent repayment of amounts outstanding under the Credit Agreement on the date the relevent Notes were first issued), less (B) any mandatory prepayments actually made thereunder (to the extent, in the case of payments of revolving credit Indebtedness, that 46 50 the corresponding commitments have been permanently reduced) or scheduled payments actually made thereunder, in each case, after consummation of the Lemmerz Acquisition; (ii) Indebtedness under the Notes and the Guarantees; (iii) Indebtedness not covered by any other clause of this definition which is outstanding on the Issue Date; (iv) Indebtedness incurred to finance the working capital requirements of the Western European operations of the Company's Restricted Subsidiaries pursuant to commitments outstanding on the Issue Date in an aggregate amount not to exceed $10 million (or, to the extent non-U.S. dollar denominated, the U.S. dollar equivalent thereof); (v) Indebtedness of Autokola not to exceed $35 million in principal amount in the aggregate which is incurred after the date the relevent Notes were first issued as a result of it becoming a Subsidiary of the Company; (vi) Indebtedness of the Company to any Domestic Restricted Subsidiary which is a Wholly Owned Subsidiary and Indebtedness of any Restricted Subsidiary to the Company or another Restricted Subsidiary provided that in the case of Indebtedness of a Domestic Restricted Subsidiary such Indebtedness is owed to another Domestic Restricted Subsidiary; (vii) Purchase Money Indebtedness and Capitalized Lease Obligations incurred to acquire property in the ordinary course of business which Indebtedness and Capitalized Lease Obligations do not in the aggregate exceed 5% of the Company's consolidated total assets as of the Company's most recent quarterly balance sheet; (viii) Interest Rate Agreements; (ix) additional Indebtedness of the Company and its Restricted Subsidiaries not to exceed $50 million in aggregate principal amount outstanding at any time; (x) Refinancing Indebtedness; (xi) Indebtedness incurred in accordance with the covenant described under "Limitation on Foreign Indebtedness"; and (xii) Indebtedness of the Company or its Subsidiaries which is denominated in a currency other than U.S. dollars, provided that (a) the U.S. dollar equivalent thereof on the date of incurrence (together with the U.S. dollar equivalent on such date of all other Indebtedness incurred under this clause (xii)) shall not exceed $80 million, and (b) on the last Business Day of each month, the sum of (1) the U.S. dollar equivalent of all Indebtedness outstanding under this clause (xii), and (2) the outstanding principal amount of Indebtedness under the Amended Credit Agreement, including reimbursement obligations in respect of letters of credit (in each case after giving effect to any currency hedging arrangements applicable thereto to which the Company or a Subsidiary of the Company is a party), shall not exceed the Permitted Credit Agreement Amount. "Permitted Investments" means, for any Person, Investments made on or after the date of the Indenture consisting of: (i) Investments by the Company, or by a Restricted Subsidiary thereof, in the Company or a Restricted Subsidiary; (ii) Temporary Cash Investments; (iii) Investments by the Company, or by a Restricted Subsidiary thereof, in a Person, if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary; 47 51 (iv) reasonable and customary loans made to employees not to exceed $1 million in the aggregate at any one time outstanding; (v) an Investment that is made by the Company or a Restricted Subsidiary thereof in the form of any stock, bonds, notes, debentures, partnership or joint venture interests or other securities that are issued by a third party to the Company or Restricted Subsidiary solely as partial consideration for the consummation of an Asset Sale; (vi) Investments in Unrestricted Subsidiaries and joint ventures permitted under subclause (v) under the covenant described under "Limitation on Restricted Payments"; (vii) Investments received in connection with the bankruptcy or reorganization of Persons having obligations in favor of the Company or its Subsidiaries (which obligations were incurred in the ordinary course), in settlement of such obligations; and (viii) Investment paid for in Common Stock of the Company. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof). "Preferred Stock" means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to dividends, distributions or liquidation proceeds of such Person over the holders of other Capital Stock issued by such Person. "Property" of any Person means all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP. "Purchase Money Indebtedness" means any Indebtedness incurred in the ordinary course of business by a Person to finance the cost (including the cost of construction) of an item of property, the principal amount of which Indebtedness does not exceed the sum of (i) 100% of such cost and (ii) reasonable fees and expenses of such Person incurred in connection therewith. "Refinancing Indebtedness" means Indebtedness that refunds, refinances or extends any Indebtedness of the Company or its Subsidiaries outstanding on the Issue Date or other Indebtedness permitted to be incurred by the Company or its Restricted Subsidiaries pursuant to the terms of the Indenture, but only to the extent that (i) the Refinancing Indebtedness is subordinated to the Notes to at least the same extent as the Indebtedness being refunded, refinanced or extended, if at all, (ii) the Refinancing Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness being refunded, refinanced or extended, or (b) after the maturity date of the Notes, (iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notes has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the weighted average life to maturity of the portion of the Indebtedness being refunded, refinanced or extended that is scheduled to mature on or prior to the maturity date of the Notes, (iv) such Refinancing Indebtedness is in an aggregate principal amount that is equal to or less than the sum of (a) the aggregate principal amount then outstanding under the Indebtedness being refunded, refinanced or extended, (b) the amount of accrued and unpaid interest, if any, and any necessary premiums (including the amount of any premium reasonably determined by the Company or the applicable Restricted Subsidiary as necessary to accomplish such refunding, refinancing or extension) on such Indebtedness being refunded, refinanced or extended and (c) the amount of customary fees, expenses and costs related to the incurrence of such Refinancing Indebtedness, (v) such Refinancing Indebtedness is incurred by the same Person that initially incurred the Indebtedness being refunded, refinanced or extended, except that the Company may incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of any Wholly Owned Subsidiary of the Company; provided, however, that any non-Domestic Restricted Subsidiary may incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of the Company arising under or in respect of the Amended Credit Agreement in an aggregate amount not to exceed $20 million outstanding at any time; and, provided, further, that with respect to such Refinancing Indebtedness referred to in the previous provision, clauses (ii) and (iii) shall not apply and (vi) if such Indebtedness 48 52 was incurred pursuant to the covenant described under "Limitation on Foreign Indebtedness" and does not contain any restriction or limitation on the payment of dividends or the making of other distributions then the Refinancing Indebtedness shall not contain any such limitation or restriction. "Restricted Payment" means any of the following: (i) the declaration or payment of any dividend or any other distribution or payment on Capital Stock of the Company or any Restricted Subsidiary of the Company or any payment made to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company or any Restricted Subsidiary of the Company (other than (x) dividends or distributions payable solely in Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase Capital Stock (other than Disqualified Capital Stock), and (y) in the case of Restricted Subsidiaries of the Company, dividends or distributions payable to the Company or to a Wholly-Owned Subsidiary of the Company), (ii) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any of its Restricted Subsidiaries (other than Capital Stock owned by the Company or a Wholly Owned Subsidiary of the Company, excluding Disqualified Capital Stock), (iii) the purchase, defeasance, repurchase, redemption or other acquisition or retirement for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment of, or the making of any principal payment on, any Indebtedness which is subordinated in right of payment to the Notes other than subordinated Indebtedness acquired in anticipation of satisfying a scheduled sinking fund obligation, principal installment or final maturity (in each case due within one year of the date of acquisition), (iv) the making of any Investment or guarantee of any Investment in any Person other than a Permitted Investment, (v) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary on the basis of the Net Investment by the Company therein and (vi) forgiveness of any Indebtedness of an Affiliate of the Company to the Company or a Restricted Subsidiary. For purposes of determining the amount expended for Restricted Payments, cash distributed or invested shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value determined in good faith by the board of directors of the Company. "Restricted Subsidiary" means a Subsidiary of the Company other than an Unrestricted Subsidiary. The Board of Directors of the Company may designate any Unrestricted Subsidiary or any Person that is to become a Subsidiary as a Restricted Subsidiary if immediately after giving effect to such action (and treating any Acquired Indebtedness as having been incurred at the time of such action), the Company could have incurred at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the "Limitation on Additional Indebtedness" covenant. "Sale and Lease-Back Transaction" means any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of the Company of any real or tangible personal Property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person in contemplation of such leasing. "Senior Indebtedness" means the principal of and premium, if any, and interest (including, without limitation, interest accruing or that would have accrued but for the filing of a bankruptcy, reorganization or other insolvency proceeding whether or not such interest constitutes an allowable claim in such proceeding) on, and any and all other fees, charges, expense reimbursement obligations, indemnities and other amounts due pursuant to the terms of all agreements, documents and instruments providing for, creating, securing, guaranteeing or evidencing or otherwise entered into in connection with (a) all obligations, whether outstanding on the date the relevent Notes were first issued or thereafter incurred, of the Company owed to lenders under or in respect of the Amended Credit Agreement, (b) all obligations of the Company with respect to any Interest Rate Agreement, (c) all obligations of the Company to reimburse any bank or other person in respect of amounts paid under letters of credit, acceptances or other similar instruments, (d) all other Indebtedness of the Company which does not provide that it is to rank pari passu with or subordinate to the Notes and (e) all deferrals, renewals, extensions, refundings, refinancings and restructurings of, and amendments, modifications and supplements to, any of the Senior Indebtedness described above. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness will not include (i) Indebtedness of the Company to any of its Subsidiaries, (ii) (A) Indebtedness represented by the Notes, and the guarantees thereof under the June Indenture and (B) Indebtedness represented by the Notes, the 11% Notes and, in each case, the guarantees thereof, under the July Indenture, (iii) any Indebtedness which by the express terms of 49 53 the agreement or instrument creating, evidencing or governing the same is junior or subordinate in right of payment to any item of Senior Indebtedness, (iv) any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business, or (v) Indebtedness incurred in violation of the Indenture. "Subsidiary" of any specified Person means any corporation, partnership, joint venture, association or other business entity, whether now existing or hereafter organized or acquired, (i) in the case of a corporation, of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, officers or trustees thereof is held by such first-named Person or any of its Subsidiaries; or (ii) in the case of a partnership, joint venture, association or other business entity, with respect to which such first-named Person or any of its Subsidiaries has the power to direct or cause the direction of the management and policies of such entity by contract or otherwise or if in accordance with GAAP such entity is consolidated with the first-named Person for financial statement purposes. "Temporary Cash Investments" means (i) Investments in marketable, direct obligations issued or guaranteed by the United States of America, or of any governmental agency or political subdivision thereof, maturing within 365 days of the date of purchase; (ii) Investments in demand deposits or certificates of deposit issued by a bank organized under the laws of the United States of America or any state thereof or the District of Columbia, in each case having capital, surplus and undivided profits totaling more than $500,000,000 and rated at least A by Standard & Poor's Corporation and A-2 by Moody's Investors Service, Inc., maturing within 365 days of purchase; (iii) Investments in commercial paper, maturing not more than 180 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any Investment therein is made of P-1 (or higher) according to Moody's Investors Service, Inc. or A-1 (or higher) according to Standard & Poor's Corporation; (iv) in the case of any non-Domestic Restricted Subsidiary, Investments: (a) in direct obligations of the sovereign nation (or any agency thereof) in which such non-Domestic Restricted Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof) or (b) of the type and maturity described in clauses (i) through (iii) above of foreign obligors, which Investments or obligors (of the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies; or (v) Investments not exceeding 365 days in duration in money market funds that invest substantially all of such funds' assets in the Investments described in the preceding clauses (i) and (iv). "TSG" means TSG Capital Fund II, L.P. "Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted Subsidiary and (b) any Subsidiary of the Company which is classified after the Issue Date as an Unrestricted Subsidiary by a resolution adopted by the Board of Directors of the Company; provided that a Subsidiary organized or acquired after the Issue Date may be so classified as an Unrestricted Subsidiary only if such classification is in compliance with the covenant set forth under "Limitation on Restricted Payments." The Trustee shall be given prompt notice by the Company of each resolution adopted by the board of directors of the Company under this provision, together with a copy of each such resolution adopted. "Western Europe" means, with respect to any jurisdictional matter, any of the twelve current member states of the European Community and Switzerland, Norway, Sweden, Finland, Austria and the Czech Republic (and "Western European" shall have a meaning correlative to the foregoing). "Wholly Owned Subsidiary" means any Restricted Subsidiary all of the outstanding voting securities (other than directors' qualifying shares or similar requirements of law in respect of non-Domestic Subsidiaries and other than shares of Lemmerz representing not more than .01% of the voting securities thereof) of which are owned, directly or indirectly, by the Company. 50 54 BOOK-ENTRY, DELIVERY AND FORM The Old Notes were offered and sold to Qualified Institutional Buyers in reliance on Rule 144A ("Rule 144A Notes"). Old Notes also were offered and sold in offshore transactions in reliance on Regulation S ("Regulation S Notes"). Rule 144A Notes were initially issued in the form of two global notes in registered, global form without interest coupons (collectively, the "Restricted Global Note"). The Restricted Global Note was deposited upon issuance with the Trustee as custodian for the Depositary Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below. Regulation S Notes were initially issued in the form of one global note in registered, global form without interest coupons (the "Regulation S Global Note," and, together with the Restricted Global Note, the "Global Notes"). The Regulation S Global Note was registered in the name of a nominee of DTC for credit to the accounts of Euroclear System ("Euroclear") and Cedel Bank, S.A. ("CEDEL") and deposited with the Trustee as custodian for DTC. New Notes exchanged for Old Notes through the Book-Entry Transfer Facility may be represented by one or more Global Notes (the "New Global Notes"). One New Global Note will be issued with respect to each $200 million aggregate principal amount of the New Notes. The New Global Notes will be deposited on the date of the closing of the Exchange Offer (the "Closing Date") with the Trustee, as custodian of DTC and pursuant to a FAST Balance Certificate Agreement between the Trustee and DTC and registered in the name of Cede & Co., as nominee of DTC (such nominee being referred to herein as the "Global Note Holder"). New Notes exchanged for Old Notes which are in the form of registered definitive certificates (the "Certificated Notes") will be issued in the form of Certificated Notes. Such Certificated Notes may, unless the New Global Notes have previously been exchanged for Certificated Notes, be exchanged for an interest in the New Global Notes representing the principal amount of New Notes being transferred. Except as set forth below, the New Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the New Global Notes may not be exchanged for New Notes in certificated form except in the limited circumstances described below. See "-- Exchange of Book-Entry Notes for Certificated Notes." DEPOSITORY PROCEDURES DTC has advised the Company that DTC is a limited purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a New Global Note to such persons may be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person having beneficial interests in a New Global Note to pledge such interests to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. 51 55 EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE NEW GLOBAL NOTES WILL NOT HAVE NEW NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF NEW NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE. Payments in respect of the principal of (and premium, if any), and interest on, a New Global Note registered in the name of DTC or its nominee will be payable to DTC or its nominee in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the New Notes, including the New Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for (i) any aspect or accuracy of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the New Global Notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the New Global Notes, or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the New Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security such as the New Global Notes as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of New Notes will be governed by standing instructions and customary practices and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the New Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the New Notes for all purposes. Except for trades in the New Notes involving only Euroclear and CEDEL participants, interests in the New Global Notes will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its Participants. Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between accountholders in Euroclear and CEDEL will be effected in the ordinary way in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the New Notes described herein, cross-market transfers between the accountholders in DTC, on the one hand, and directly or indirectly through Euroclear or CEDEL accountholders, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or CEDEL, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or CEDEL, as the case may be, by the counterpart in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or CEDEL, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant New Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear accountholders and CEDEL accountholders may not deliver instructions directly to the depositories for Euroclear or CEDEL. Because of time zone differences, the securities account of a Euroclear or CEDEL accountholders purchasing an interest in a New Global Note from accountholders in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or CEDEL participant, during the securities settlement processing day (which must be a business day for Euroclear or CEDEL) immediately following the settlement date of DTC. Cash received in Euroclear or CEDEL as a result of sales of interests in a New Global Note by or through an Euroclear or CEDEL accountholder to a Participant in DTC will be received 52 56 with value on the settlement date of DTC but will be available in the relevant Euroclear or CEDEL cash account only as of the business day for Euroclear or CEDEL following DTC's settlement date. DTC has advised the Company that it will take any action permitted to be taken by a holder of New Notes only at the direction of one or more Participants to whose account with DTC interests in the New Global Notes are credited and only in respect of such portion of the aggregate principal amount of the New Notes as to which such Participant or Participants has or have given such direction. However, if any of the events described under "-- Exchange of Book Entry Notes for Certificated Notes" occur, DTC reserves the right to exchange the New Global Notes for New Notes in certificated form, and to distribute such New Notes to its Participants. The information in this section concerning DTC, Euroclear and CEDEL and their book-entry systems has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the New Global Notes among accountholders in DTC, it is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Initial Purchasers or the Trustee nor any agent of the Company or Trustee will have any responsibility for the performance by DTC or their respective accountholders, Indirect Participants or accountholders of their respective obligations under the rules and procedures governing their operations. Exchange of Book-Entry Notes for Certificated Notes A New Global Note is exchangeable for definitive New Notes in registered certificated form if (i) DTC (x) notifies the Company that it is unwilling or unable to continue as depositary for the New Global Note and the Company thereupon fails to appoint a successor depositary or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the New Notes in certificated form or (iii) there shall have occurred and be continuing a Default or an Event of Default with respect to the New Notes. In all cases, certificated New Notes delivered in exchange for any New Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures). 53 57 DESCRIPTION OF OTHER INDEBTEDNESS The following summary description of certain indebtedness of the Company (other than the Notes) does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the 11% Indenture and the Amended Credit Agreement, copies of which are filed as exhibits to the Registration Statement of which this Prospectus is a part. AMENDED CREDIT AGREEMENT Pursuant to the Amended Credit Agreement (the "Amended Credit Agreement"), among the Company and the Managing Agents (as defined therein), the Managing Agents and a syndicate of lenders (the "Lenders") have agreed to lend to the Company up to $590.5 million in the form of a senior secured loan facility, such aggregate amount to be allocated among (i) a Tranche A-1 Term Loan Facility in an aggregate principal amount of $103.0 million (the "Tranche A-1 Facility"), (ii) a Tranche A-2 Term Loan Facility in an aggregate principal amount of $100 million (the "Tranche A-2 Facility"), (iii) a Tranche B Term Loan Facility in an aggregate principal amount of $64.9 million (the "Tranche B Facility"), (iv) a Tranche C Term Loan Facility in an aggregate principal amount of $52.6 million (the "Tranche C Facility") (collectively, the "Term Loan Facilities"), and (v) up to $270 million in the form of a senior secured revolving credit facility (the "Revolving Credit Facility," and, together with the Term Loan Facilities, the "Loans"). The following terms and descriptions of the Loans are based upon the terms set forth in the Amended Credit Agreement and related documents. Use of Proceeds; Maturity. The Tranche A-2 Facility was made available to the Company and its subsidiaries at the time of the Lemmerz Acquisition. The entire Tranche A-2 Facility was drawn in a single borrowing on July 1, 1997. Upon the consummation of the Lemmerz Acquisition (such date is referred to herein as the "Effective Time"), the Tranche A-1, B and C Term Loan Facilities were deemed to constitute continuations of the term loan facilities provided for in the existing Credit Agreement. The Revolving Credit Facility is available (including through the making of revolving loans and the issuance of letters of credit) for general corporate purposes of the Company and its subsidiaries. The Term Loan Facilities have maturity schedules as follows: (i) the Tranche A-1 and A-2 Facilities will mature on the sixth anniversary of the Effective Time, and will amortize in quarterly installments; (ii) the Tranche B Facility will mature on the seventh anniversary of the Effective Time, and will amortize in quarterly installments; and (iii) the Tranche C Facility will mature on the eighth anniversary of the Effective Time, and will amortize in quarterly installments. The Revolving Credit Facility will mature on the sixth anniversary of the Effective Time. The Amended Credit Agreement requires the Company to reduce the amount outstanding under the Revolving Credit Facility to $150 million during any consecutive thirty day period during each fiscal year. Prepayments; Reduction of Commitments. Loans under the Term Loan Facilities are required to be prepaid with (i) 75% of excess cash flow, (ii) 100% of the net cash proceeds of all non-ordinary-course asset sales or other dispositions of the property by the Company and its subsidiaries (including insurance and condemnation proceeds), subject to limited exceptions, and (iii) 100% of the net proceeds of issuances of debt obligations of the Company and its subsidiaries, subject to limited exceptions. Such mandatory prepayments and commitment reductions are first allocated pro rata among the Term Loan Facilities and second to commitments under the Revolving Credit Facility. Within the Term Loan Facilities such prepayments will be applied, with certain exceptions, pro rata to the remaining amortization payments under each such facility. Voluntary prepayments are permitted, in whole or in part, at the option of the Company, in minimum principal amounts to be agreed upon, without premium or penalty, subject to reimbursement of the Lenders' redeployment costs in the case of prepayment of eurocurrency borrowings ("Eurocurrency Loans") other than on the last day of the relevant interest period. All Term Loan voluntary prepayments under the Term Loan Facilities are allocated pro rata among the Term Loan Facilities and, within each such Term Loan Facility, applied, with certain exceptions, pro rata to the remaining amortization payment under such Term Loan Facility. Interest. The interest rates under the Loans will, at the option of the Company, be based upon either an adjusted eurocurrency rate (the "Eurocurrency Rate") or the rate which is equal to the highest of CIBC's prime rate, the federal funds rate plus 1/2 of 1% and the base certificate of deposit rate plus 1% ("ABR") in 54 58 each case plus an applicable margin based on the leverage ratio from time to time in effect. The applicable margin for ABR Loans ranges from 0% to 1.25%. For Revolving Credit and Tranche A-1 and A-2 Eurocurrency Loans the applicable margin ranges from 0.75% to 2.25%. For Tranche B Eurocurrency Loans the applicable margin ranges from 2.25% to 2.75% and for Tranche C Loans from 2.50% to 3.00%. Following the first anniversary of the Effective Time, the spreads above the Adjusted LIBOR and ABR set forth above will decrease in increments to be agreed upon if the Company satisfies performance tests to be agreed upon and no event of default under the Amended Credit Agreement exists. The Company may elect interest periods of 1, 2, 3 or 6 months for Eurocurrency Loans. Calculation of interest is calculated on the basis of actual number of days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the Prime Rate) and interest is payable at the end of each interest period and, in any event, at least every 3 months. Collateral and Guarantees. The Loans are guaranteed by the Company and certain of its existing and future domestic subsidiaries. The Loans are secured by a first priority lien in substantially all of the properties and assets of the Company and such respective domestic subsidiaries, now owned or acquired later, including a pledge of all of the shares of the Company's existing and future domestic subsidiaries and 65% of the shares of certain of the Company's existing and future foreign subsidiaries. Covenants. The Amended Credit Agreement contains covenants restricting the ability of the Company and its subsidiaries to, among others, (i) declare dividends or redeem or repurchase capital stock, (ii) prepay, redeem or purchase debt, (iii) incur liens and engage in sale-leaseback transactions, (iv) make loans and investments, (v) issue more debt, (vi) amend or otherwise alter debt and other material agreements, (vii) make capital expenditures, (viii) engage in mergers, acquisitions and asset sales, (ix) engage in transactions with affiliates and (x) alter the business it conducts. The Company must also make certain customary indemnifications of the Managing Agents and their respective agents and is required to comply with financial covenants with respect to (i) a maximum leverage ratio, (ii) a minimum interest coverage ratio and (iii) a minimum fixed charge coverage ratio. The Company is also required to make certain customary affirmative covenants. Events of Default. Events of default under the Amended Credit Agreement include but are not limited to (i) the Company's failure to pay principal or interest when due, (ii) the Company's material breach of any covenant, representation or warranty contained in the loan documents, (iii) customary cross-default provisions, (iv) events of bankruptcy, insolvency or dissolution of the Company or its subsidiaries, (v) the levy of certain judgments against the Company, its subsidiaries, or their assets, (vi) certain adverse events under ERISA plans of the Company or its subsidiaries, (vii) the actual or asserted invalidity of security documents or guarantees of the Company or its subsidiaries and (viii) a change of control of the Company. The preceding discussion of certain of the provisions of the Amended Credit Agreement is not intended to be exhaustive and is qualified in its entirety by reference to the provisions of the Amended Credit Agreement. 11% NOTES In July 1996, Hayes issued the 11% Notes, comprising $250.0 million aggregate principal amount of 11% Senior Subordinated Notes due 2006, in a public offering as part of the Motor Wheel Transactions. The 11% Notes are general unsecured obligations of the Company, are subordinated in right of payment to Senior Indebtedness of the Company and senior in right of payment to any current or future subordinated indebtedness of the Company. The 11% Notes are unconditionally guaranteed, on a senior subordinated basis, as to the payment of principal, premium, if any, and interest, jointly and severally by the Company's material Domestic Subsidiaries. Interest on the 11% Notes is payable in arrears on January 15 and July 15. The indenture governing the 11% Notes (the "11% Notes Indenture") limits, among other things: (i) the incurrence of additional domestic and foreign indebtedness, with certain exceptions; (ii) the making of any Restricted Payment (as defined in the 11% Notes Indenture); (iii) the incurrence of other senior subordinated debt; (iv) the create of certain liens; (v) entering into transactions with affiliates; (vi) the creation of subsidiaries; (vii) the sale of assets; (viii) the issuance of common stock of subsidiaries; and (ix) the merger, consolidation or sale of substantially all of the assets of the Company. The 11% Notes Indenture also provides 55 59 that a holder of the 11% Notes may, under certain circumstances, have the right to require that the Company repurchase such holder's 11% Notes upon a change of control. The 11% Notes mature on July 15, 2006 and may not be redeemed prior to July 15, 2001, provided, however, that the Company may, at any time and from time to time prior to July 15, 1999, redeem up to 35% of the aggregate principal amount of the 11% Notes at a price equal to 110% of the aggregate principal amount so redeemed, plus accrued and unpaid interest to the date of redemption, with the Net Cash Proceeds (as defined in the 11% Notes Indenture) of one or more Equity Offerings (as defined in the 11% Notes Indenture) where the proceeds to the Company of any such Equity Offering at least $35.0 million. On or after July 15, 2001, the Company may, at its option, redeem the 11% Notes, in whole or in part, on at least 30 days' notice but not more than 60 days' notice to each holder of the 11% Notes to be redeemed at the prices set forth below, together with accrued and unpaid interest to the redemption date, if redeemed during the twelve-month period beginning on July 15 of each year listed below:
Year Percentage ---- ---------- 2001.............................. 105.500% 2002.............................. 103.667 2003.............................. 101.833 2004 and thereafter............... 100.000
The preceding discussion of the provisions of the 11% Notes and the 11% Notes Indenture is not intended to be exhaustive and is qualified in its entirety by reference to the 11% Notes and the 11% Notes Indenture. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of certain U.S. federal income tax considerations associated with the exchange of Old Notes for New Notes and the ownership and disposition of the New Notes by holders who acquire the New Notes pursuant to the Exchange Offer and who will hold the New Notes as "capital assets" (generally, property held for investment). The summary is based upon current laws, regulations, rulings and judicial decisions all of which are subject to change, possibly with retroactive effect. The discussion below does not address all aspects of U.S. federal income taxation that may be relevant to particular holders in the context of their specific investment circumstances or certain types of holders subject to special treatment under such laws (for example, financial institutions and tax-exempt organizations). In addition, the discussion does not address any aspect of state, local or foreign taxation. For purposes of this discussion, a "U.S. Holder" is an individual who is a citizen or resident of the United States, a corporation, a partnership or other entity created under the laws of the United States or any political subdivision thereof, an estate that is subject to U.S. federal income taxation without regard to the source of income, or a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States fiduciaries who have the authority to control all substantial decisions of the trust. The term "non-U.S. Holder" means a beneficial owner of the New Notes who is not a U.S. Holder. PROSPECTIVE HOLDERS OF THE NEW NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OF OLD NOTES FOR NEW NOTES AND THE OWNERSHIP AND DISPOSITION OF THE NEW NOTES AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAW. EXCHANGE OF NOTES The exchange of Old Notes for New Notes pursuant to the Exchange Offer will not be treated as an exchange or other taxable event for U.S. federal income tax purposes because, under United States Treasury regulations, the New Notes will not be considered to differ materially in kind or extent from the Old Notes. Rather, the New Notes received by a holder will be treated as a continuation of the Old Notes in the hands of such holder. As a result, there will be no U.S. federal income tax consequences to holders who exchange Old 56 60 Notes for New Notes pursuant to the Exchange Offer and any such holder will have the same tax basis and holding period in the New Notes as it had in the Old Notes immediately before the exchange. U.S. HOLDERS Interest payable on the New Notes will be includible in the income of a U.S. Holder in accordance with such holder's regular method of accounting. If a New Note is redeemed, sold or otherwise disposed of, a U.S. Holder generally will recognize gain or loss equal to the difference between the amount realized on the sale or other disposition of such New Note (to the extent such amount does not represent accrued but unpaid interest) and such holder's tax basis in the New Note. Subject to the market discount rules discussed below, such gain or loss will be capital gain or loss and will be long-term if the holder has a holding period for the New Note (which would include the holding period of the Old Notes) of more than one year at the time of the disposition. In certain circumstances, U.S. Holders that are individuals may be entitled to preferential treatment for net long-term capital gains, including, as a result of recently enacted legislation, in the case of a capital asset that has been held for more than 18 months at the time of the disposition. Under the market discount rules of the Internal Revenue Code of 1986, as amended (the "Code"), a holder (other than a holder who made the election described below) who purchased an Old Note with "market discount" (generally defined as the amount by which the stated redemption price at maturity of the Old Note exceeds the holder's purchase price) will be required to treat any gain recognized on the redemption, sale or other disposition of the New Note received in the exchange as ordinary income to the extent of the market discount that accrued during the holding period of such New Note (which would include the holding period of the Old Note). A holder who has elected under applicable Code provisions to include market discount in income as such discount accrues will not, however, be required to treat any gain recognized as ordinary income under these rules. Holders should consult their tax advisors as to the portion of any gain that would be taxable as ordinary income under these provisions. NON-U.S. HOLDERS An investment in the New Notes by a non-U.S. Holder generally will not give rise to any U.S. federal income tax consequences, unless the interest received or any gain recognized on the sale, redemption or other disposition of the New Notes by such holder is treated as effectively connected with the conduct by such holder of a trade or business in the United States, or, in the case of gains derived by an individual such individual is present in the United States for 183 days or more and certain other requirements are met, and certain identification requirements are met. PLAN OF DISTRIBUTION Each broker-dealer who holds Old Notes for its own account as a result of market making activities or other trading activities and who receives New Notes in exchange for Old Notes pursuant to the Exchange Offer may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This Prospectus, as it may be amended or supplemental from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired as a result of market making activities or other trading activities. The Company acknowledges and each Holder, other than a broker-dealer, must acknowledge that it is not engaged in, does not intend to engage in, and has no arrangement or understanding with any person to participate in a distribution of New Notes. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. The Company will not receive any proceeds from any sale of New Notes by broker-dealers. New Notes received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may 57 61 be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer that resells New Notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of New Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the Expiration Date, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. LEGAL MATTERS The validity of the issuance of the New Notes will be passed upon for the Company by Skadden, Arps, Slate, Meagher & Flom LLP. EXPERTS The consolidated financial statements of Hayes Wheels International, Inc. and subsidiaries as of January 31, 1997 and 1996 and for each of the years in the three-year period ended January 31, 1997 have been incorporated by reference herein in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Lemmerz Holding GmbH and subsidiaries as of December 31, 1996 and 1995 and for each of the years in the two-year period ended December 31, 1996 have been incorporated by reference herein in reliance upon the report of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft, independent certified public accountants, incorporated by reference herein, and upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of MWC Holdings, Inc. at December 31, 1995 and 1994, and for each of the three years in the period ended December 31, 1995 have been incorporated by reference herein and have been audited by Ernst & Young LLP, independent auditors, as set forth in their report and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 58 62 ====================================================== NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION. ------------------------ TABLE OF CONTENTS
PAGE ---- Incorporation of Certain Documents by Reference........................... 2 Available Information................. 2 Prospectus Summary.................... 4 Risk Factors.......................... 15 The Exchange Offer.................... 20 Description of the Notes.............. 27 Description of Other Indebtedness..... 54 Certain Federal Income Tax Considerations...................... 56 Plan of Distribution.................. 57 Legal Matters......................... 58 Experts............................... 58
UNTIL (90 DAYS AFTER THE DATE OF THIS PROSPECTUS) DEALERS AFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS OBLIGATION IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. ====================================================== ====================================================== HAYES WHEELS INTERNATIONAL, INC. [HAYES WHEELS INTERNATIONAL, INC. LOGO] $250,000,000 9 1/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 $150,000,000 9 1/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 ------------------------ PROSPECTUS ------------------------ , 1997 ====================================================== 63 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each of the Registrants has by-law or code of regulation provisions providing that the Registrants shall indemnify their directors, officers, employees or agents to the fullest extent permitted by law. Set forth below are descriptions of the laws of the applicable states of incorporation of the Registrants. These descriptions are intended only as summaries and are qualified in their entirety by reference to the applicable laws. (a) State of Delaware for Hayes Wheels International, Inc., Hayes Wheels International -- California, Inc., Hayes Wheels International -- Georgia, Inc., Hayes Wheels International -- Indiana, Inc., Hayes Wheels International -- Mexico, Inc., and MWC Acquisition Sub, Inc. Section 145 of the Delaware General Corporation Law ("DGCL") empowers a corporation to indemnify any person who was or is a party or witness or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reasons of the fact that he or she is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise. Depending on the character of the proceeding, a corporation may indemnify against expenses, costs and fees (including attorneys' fees) judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the person indemnified acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. If the person indemnified is not wholly successful in such action, suit or proceeding, but is successful, on the merits or otherwise, in one or more but less than all claims, issues or matters in such proceeding, he or she may be indemnified against expenses actually and reasonably incurred in connection with each successfully resolved claim, issue or matter. In the case of an action or suit by or in the right of the corporation, no indemnification may be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery, or the court in which such action or suit was brought, shall determine that, despite the adjudication of liability, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 provides that, to the extent a director, officer, employee or agent of a corporation has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or manner therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. The Company's By-Laws provide for indemnification by the Company of its directors and officers to the fullest extent permitted by the DGCL. The Company has purchased insurance on behalf of the present and former directors and officers of the Company and its subsidiaries against liabilities asserted against or incurred by them in such capacity or arising out of their status as such. The Company has entered into indemnification agreements with each of its directors pursuant to which the Company has agreed to indemnify such individuals to the fullest extent permitted under Delaware law. (b) State of Michigan for Hayes Wheels International -- Michigan, Inc. The Michigan Business Corporation Act, as amended (the "MBCA"), provides that a Michigan corporation, such as Hayes Wheels International -- Michigan, Inc., may indemnify a director, officer, employee or agent of the corporation against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) involving the person indemnified by reason of the fact that the person indemnified is or II-1 64 was a director, officer, employee or agent of the corporation, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The MBCA also provides that in derivative actions, a corporation may indemnify a director, officer, employee or agent of the corporation against expenses actually and reasonably incurred by the person indemnified to the extent that the person indemnified is successful on the merits or otherwise in any such action, suit or proceeding or in the defense of any claim, issue or matter therein. Under the MBCA, no indemnification shall be made with respect to any claim, issue or matter as to which the person indemnified shall have been adjudged to be liable to the corporation unless and only to the extent that the court shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, the person indemnified is fairly and reasonably entitled to indemnify for such expenses which the court shall deem proper. The MBCA also generally permits the advancement of reasonable expenses and empowers the corporation to purchase and maintain directors' and officers' insurance. (c) State of Ohio for Motor Wheel Corporation The Ohio Revised Code provides that a Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee of the company or agent of such company, or is or was serving at the request of the company as a director, trustee, officer, employee or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust or other enterprise. II-2 65 ITEM 21. EXHIBITS. The following exhibits are filed as part of this Registration Statement: EXHIBIT NO. DESCRIPTION - ----------- ----------- 1.1 Purchase Agreement, dated June 19, 1997, by and among the Company, the Subsidiary Guarantors and CIBC Wood Gundy Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., Morgan Stanley & Co. Inc. and Salomon Brothers Inc. 1.2 Purchase Agreement, dated July 16, 1997 by and among the Company, the Subsidiary Guarantors, CIBC Wood Gundy Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. **2.1 Agreement and Plan of Merger, dated as of March 28, 1996, by and between the Company and MWC Holdings, Inc. (incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated March 28, 1996). **2.2 Purchase Agreement among the Company, Cromodora Wheels S.p.A., Lemmerz Holding GmbH and the Shareholders of Lemmerz Holding Gmbh, dated as of June 6, 1997 (incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated June 6, 1997). **4.1 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the June Notes including the form of Note therein (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 4.2 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the July Notes including the form of Note therein. 4.3 Registration Rights Agreement, dated as of June 30, 1997, by and among the Company, the Guarantors and the Initial Purchasers. 4.4 Registration Rights Agreement, dated as of July 22, 1997, by and among the Company, the Guarantors and the Initial Purchasers. **4.5 Form of June Notes (included in Exhibit 4.1). 4.6 Form of July Notes (included in Exhibit 4.2). **4.7 Indenture between the Company and Comerica Bank, as Trustee, relating to the 11% Notes (incorporated by reference to Exhibit 4.2 of the Company's Form S-3, File No. 333-03813. +5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality of the securities being registered hereby. **10.1 Amended and Restated Credit Agreement among the Company and the Lenders thereunder, dated as of June 30, 1997 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 12.1 Ratio of Earnings to Fixed Charges. 23.1 Consent of KPMG Peat Marwick LLP. 23.2 Consent of KPMG Deutsche Treuhand -- Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. 23.3 Consent of Ernst & Young LLP. +23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1). 24 Powers of Attorney (included in the signature pages to the Registration Statement). 25.1 Form T-1 Statement of Eligibility of Trustee with respect to the June Notes. 25.2 Form T-1 Statement of Eligibility of Trustee with respect to the July Notes. +99.1 Form of Letter of Transmittal. +99.2 Form of Notice of Guaranteed Delivery. +99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. +99.4 Form of Letter to Clients. - ------------------------- ** Previously filed. + To be filed by an amendment to this Registration Statement. II-3 66 ITEM 22. UNDERTAKINGS. The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. The undersigned registrants hereby undertake to file an application for the purposes of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the TIA in accordance with the rules and regulation prescribed by the Commission under Section 305(b)(2) of the TIA. II-4 67 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. HAYES WHEELS INTERNATIONAL, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President and General Counsel POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Chairman of the Board, President Ranko Cucuz and Chief Executive Officer August 25, 1997 /s/ WILLIAM D. SHOVERS Vice President, Chief Financial - --------------------------------------------------- Officer and Principal William D. Shovers Accounting Officer August 25, 1997 /s/ CLEVELAND A. CHRISTOPHE - --------------------------------------------------- Cleveland A. Christophe Director August 25, 1997 /s/ TIMOTHY J. CLARK - --------------------------------------------------- Timothy J. Clark Director August 25, 1997 /s/ ANDREW R. HEYER - --------------------------------------------------- Andrew R. Heyer Director August 25, 1997 /s/ PETER A. JOSEPH - --------------------------------------------------- Peter A. Joseph Director August 25, 1997
II-5 68
SIGNATURE TITLE DATE --------- ----- ---- /s/ HORST KUKWA-LEMMERZ - --------------------------------------------------- Horst Kukwa-Lemmerz Director August 25, 1997 /s/ PAUL S. LEVY - --------------------------------------------------- Paul S. Levy Director August 25, 1997 /s/ WIENAND MEILICKE - --------------------------------------------------- Wienand Meilicke Director August 25, 1997 /s/ JOHN S. RODEWIG - --------------------------------------------------- John S. Rodewig Director August 25, 1997 /s/ DAVID Y. YING - --------------------------------------------------- David Y. Ying Director August 25, 1997
II-6 69 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. HAYES WHEELS INTERNATIONAL -- CALIFORNIA, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ RONALD L. KOLAKOWSKI - --------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997
II-7 70 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. HAYES WHEELS INTERNATIONAL -- GEORGIA, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ RONALD L. KOLAKOWSKI - --------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997
II-8 71 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. HAYES WHEELS INTERNATIONAL -- INDIANA, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ RONALD L. KOLAKOWSKI - --------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997
II-9 72 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. HAYES WHEELS INTERNATIONAL -- MEXICO, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ DANIEL M. SANDBERG - --------------------------------------------------- Daniel M. Sandberg Director August 25, 1997
II-10 73 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. HAYES WHEELS INTERNATIONAL -- MICHIGAN, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ RONALD L. KOLAKOWSKI - --------------------------------------------------- Ronald L. Kolakowski Director August 25, 1997
II-11 74 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. MOTOR WHEEL CORPORATION By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ DANIEL M. SANDBERG - --------------------------------------------------- Daniel M. Sandberg Director August 25, 1997
II-12 75 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Romulus, State of Michigan, on the date of August 25, 1997. MWC ACQUISITION SUB, INC. By: /s/ DANIEL M. SANDBERG ------------------------------------ Daniel M. Sandberg Vice President POWER OF ATTORNEY Each person whose signature appears below hereby authorizes Daniel M. Sandberg and William D. Shovers, and each of them, as attorney-in-fact and agents, with full powers of substitution, to sign on his or her behalf, individually and in the capacities stated below, and to file any and all amendments (including post-effective amendments) to this Registration Statement with the Securities and Exchange Commission, granting to said attorney-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in the premises. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ RANKO CUCUZ - --------------------------------------------------- Ranko Cucuz Director August 25, 1997 /s/ WILLIAM D. SHOVERS - --------------------------------------------------- William D. Shovers Director August 25, 1997 /s/ DANIEL M. SANDBERG - --------------------------------------------------- Daniel M. Sandberg Director August 25, 1997
II-13 76 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 1.1 Purchase Agreement, dated June 19, 1997, by and among the Company, the Subsidiary Guarantors and CIBC Wood Gundy Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., Morgan Stanley & Co. Inc. and Salomon Brothers Inc. 1.2 Purchase Agreement, dated July 16, 1997 by and among the Company, the Subsidiary Guarantors, CIBC Wood Gundy Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. **2.1 Agreement and Plan of Merger, dated as of March 28, 1996, by and between the Company and MWC Holdings, Inc. (incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated March 28, 1996). **2.2 Purchase Agreement among the Company, Cromodora Wheels S.p.A., Lemmerz Holding GmbH and the Shareholders of Lemmerz Holding Gmbh, dated as of June 6, 1997 (incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated June 6, 1997). **4.1 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the June Notes including the form of Note therein (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 4.2 Indenture between the Company, the Guarantors and The Bank of New York, as Trustee, relating to the July Notes including the form of Note therein. 4.3 Registration Rights Agreement, dated as of June 30, 1997, by and among the Company, the Guarantors and the Initial Purchasers. 4.4 Registration Rights Agreement, dated as of July 22, 1997, by and among the Company, the Guarantors and the Initial Purchasers. **4.5 Form of June Notes (included in Exhibit 4.1). 4.6 Form of July Notes (included in Exhibit 4.2). **4.7 Indenture between the Company and Comerica Bank, as Trustee, relating to the 11% Notes (incorporated by reference to Exhibit 4.2 of the Company's Form S-3, File No. 333-03813. +5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality of the securities being registered hereby. **10.1 Amended and Restated Credit Agreement among the Company and the Lenders thereunder, dated as of June 30, 1997 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, dated June 30, 1997). 12.1 Ratio of Earnings to Fixed Charges. 23.1 Consent of KPMG Peat Marwick LLP. 23.2 Consent of KPMG Deutsche Treuhand -- Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. 23.3 Consent of Ernst & Young LLP. +23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1). 24 Powers of Attorney (included in the signature pages to the Registration Statement). 25.1 Form T-1 Statement of Eligibility of Trustee with respect to the June Notes. 25.2 Form T-1 Statement of Eligibility of Trustee with respect to the July Notes. +99.1 Form of Letter of Transmittal. +99.2 Form of Notice of Guaranteed Delivery. 77
EXHIBIT NO. DESCRIPTION - ----------- ----------- +99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. +99.4 Form of Lett to Clients.
- ------------------------- ** Previously filed. + To be filed by an amendment to this Registration Statement. EX-1.1 2 PURCHASE AGREEMENT - JUNE NOTES 1 EXHIBIT 1.1 HAYES WHEELS INTERNATIONAL, INC. $250,000,000 9 1/8% Senior Subordinated Notes due 2007 PURCHASE AGREEMENT June 19, 1997 CIBC WOOD GUNDY SECURITIES CORP. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED BEAR, STEARNS & CO. INC. MORGAN STANLEY & CO. INCORPORATED SALOMON BROTHERS INC c/o CIBC Wood Gundy Securities Corp. 425 Lexington Avenue 3rd Floor New York, New York 10017 Ladies and Gentlemen: Hayes Wheels International, Inc., a Delaware corporation (the "Company"), and each of the Company's subsidiaries listed in Exhibit A hereto (each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and, together with the Company, the "Issuers") hereby confirm their agreement with you (the "Initial Purchasers"), as set forth below. 1. The Securities. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Initial Purchasers $250,000,000 aggregate principal amount of its 9-1/8% Senior Subordinated Notes due 2007 (the "Notes"). The obligations of the Company under the Indenture (as hereinafter defined) and the Notes will be unconditionally guaranteed (the "Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated June 30, 1997, among the Company, The Bank of New York, a New York corporation, as trustee (the "Trustee"), and the Subsidiary Guarantors. The Notes and the Guarantees are hereinafter referred to collectively as the "Securities." The sale of the Securities to the Initial Purchasers (the "Offering") will be made without registration of the Securities under the Securities Act of 1933, as amended, (the "Act") and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder, in reliance 2 -2- upon the exemption therefrom provided by Section 4(2) of the Act. Holders of the Securities will have the benefits of a Registration Rights Agreement to be dated as of June 30, 1997 among the Issuers and the Initial Purchasers (the "Registration Rights Agreement"). In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated June 12, 1997 (the "Preliminary Memorandum") and prepared a final offering memorandum dated June 19, 1997 (the "Final Memorandum" and, together with the Preliminary Memorandum, the "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the Offering, a description of the Company and any material developments relating to the Company occurring after the date of the most recent financial statements included therein. The Securities are being issued and sold in connection with the acquisition (the "Acquisition") by the Company of Lemmerz Holding GmbH, a limited liability company organized under the laws of the Federal Republic of Germany ("Lemmerz"), pursuant to the Purchase Agreement (the "Acquisition Agreement"), dated June 6, 1997, among the Company, Cromodora Wheels S.p.A., Lemmerz and the shareholders of Lemmerz, pursuant to which the Company will purchase the capital stock of Lemmerz for (i) $200 million in cash and (ii) convertible preferred stock of the Company which, following stockholder approval, will automatically convert into 5 million shares of newly issued common stock of the Company. The cash portion of the consideration, the refinancing of existing Lemmerz debt, working capital of the Company and the fees and expenses of the Lemmerz Acquisition will be financed with the proceeds from the Offering and borrowings under an amended $740.5 million senior secured term loan facility (the "Credit Agreement") among the Company, Canadian Imperial Bank of Commerce, as administrative agent, Merrill Capital Corporation, as documentation agent, and the other financial institutions party thereto, as lenders. The time of the consummation of the Acquisition is herein referred to as the "Effective Time." In connection with the Acquisition, the Company is soliciting consents from holders of its 11% Senior Subordinated Notes due 2006 (the "Old Notes") to amendments (the "Proposed Amendments") to certain of the provisions in the indenture governing the Old Notes (the "Old Indenture"), as described in the Consent Solicitation Statement dated June 12, 1997, the related form of Consent and instructions thereto and any supplemental materials attached thereto (the "Consent Solicitation"). After 3 -3- receipt of the required consents from the holders of the Old Notes, the Company, the Subsidiary Guarantors parties to the Old Indenture and the trustee under the Old Indenture will enter into a supplemental indenture to give effect to the Proposed Amendments. The Acquisition Agreement and the documents entered into in connection therewith including, without limitation, the agreements attached thereto as exhibits, are herein collectively referred to as the "Acquisition Documents." This Agreement, the Securities, the Exchange Notes (as defined in the Registration Rights Agreement), the Private Exchange Notes (as defined in the Registration Rights Agreement), the Registration Rights Agreement and the Indenture are herein collectively referred to as the "Offering Documents." The Acquisition Documents, the Offering Documents and the Credit Agreement are herein collectively referred to as the "Transaction Documents." The Offering, the Acquisition, the Consent Solicitation and the execution of and borrowing under the Credit Agreement are collectively referred to as the "Transactions." 2. Representations and Warranties of the Issuers. The Issuers, jointly and severally, represent and warrant to and agree with the Initial Purchasers that: (a) Each of the Preliminary Memorandum and the Final Memorandum, as of its respective date and, in the case of the Final Memorandum, at the Closing Date (as defined in Section 3 hereof), did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 2(a) do not apply to statements or omissions that are made in reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Company in writing by the Initial Purchasers expressly for use in the Preliminary Memorandum or the Final Memorandum or any amendment or supplement thereto, which information is set forth in Section 15. (b) Each of the Issuers and the Subsidiaries (as hereinafter defined) that is a corporation organized under the laws of a jurisdiction of the United States has been and at and as of the Effective Time will be duly incorporated and each of the Issuers and each Subsidiary that is a corporation organized under the laws of a jurisdiction 4 -4- of the United States is and at and as of the Effective Time will be validly existing in good standing as a corporation under the laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as now conducted as described in the Memorandum, is and at and as of the Effective Time will be duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, condition (financial or other) or results of operations of any of the Issuers, the Subsidiaries, Lemmerz and each of the Lemmerz Subsidiaries, taken as a whole (any such event a "Material Adverse Effect"); each of the Issuers and the Subsidiaries that is not a corporation organized under the laws of a jurisdiction of the United States, and, to the best knowledge of the Issuers, after due inquiry, Lemmerz and each of the Lemmerz Subsidiaries has been and at and as of the Effective Time will be duly organized and validly existing under the laws of the jurisdiction in which it is so organized, with the requisite power and authority to own its properties and conduct its business as now conducted and as described in the Memorandum; the Company had as of the date specified therein the authorized, issued and outstanding capitalization set forth in the Final Memorandum; except as set forth in Exhibit B-1 hereto and for the Subsidiary Guarantors (collectively, the "Subsidiaries"), the Company does not have any subsidiaries and, to the best knowledge of the Company, after due inquiry, except as set forth in Exhibit B-2 hereto (the "Lemmerz Subsidiaries"), Lemmerz does not have any subsidiaries or own directly or indirectly any of the capital stock or other equity securities of any other person; all of the outstanding shares of capital stock of the Issuers and the Subsidiaries have been, and to the best knowledge of the Issuers, after due inquiry, all of the outstanding shares of capital stock of Lemmerz and the Lemmerz Subsidiaries have been, duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights and, in the case of the Subsidiary Guarantors, the Subsidiaries, and the Lemmerz Subsidiaries except in connection with the Credit Agreement, are owned free and clear of all liens, encumbrances, equities and restrictions on transferability (other than those imposed by the Act and the state securities or "Blue Sky" laws); 5 -5- except as set forth in the Final Memorandum, no options, warrants or other rights to purchase from any Issuer or any Subsidiary or, to the best knowledge of the Issuers, after due inquiry, except as set forth in Exhibit B-2, Lemmerz or any Lemmerz Subsidiary, agreements or other obligations of any Issuer or any Subsidiary or, to the best knowledge of the Issuers, after due inquiry, Lemmerz or any Lemmerz Subsidiary, to issue or other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in any Issuer or any Subsidiary or Lemmerz or any Lemmerz Subsidiary, are outstanding. (c) Each of the Issuers has the required corporate power and authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes. The Securities, the Exchange Notes, the Private Exchange Notes and the guarantees to be endorsed thereon have each been duly and validly authorized by each of the Issuers for issuance and, when executed by the Issuers and authenticated by the Trustee in accordance with the provisions of the Indenture and, in the case of the Securities, delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Issuers, entitled to the benefits of the Indenture and enforceable against the Issuers in accordance with their terms except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity); each of the Issuers has all requisite corporate power and authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes, and the Indenture has been duly and validly authorized by the Issuers and is in a form to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA") and, when executed and delivered by the Issuers (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in ef- 6 -6- fect relating to or affecting creditors' rights generally or (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity). (d) Each of the Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The Registration Rights Agreement has been duly and validly authorized by the Issuers and, when executed and delivered by the Issuers (assuming the due authorization, execution and delivery by the Initial Purchasers), will constitute a valid and legally binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms except (i) that the enforcement thereof may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public policy considerations. (e) Each of the Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly and validly authorized by the Issuers and, when executed and delivered by the Issuers, will constitute a valid and legally binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (f) Each of the Issuers has and, to the best knowledge of the Issuers, after due inquiry, Lemmerz has all requisite power and authority to execute, deliver and perform its obligations under each of the Transaction Documents (other than the Offering Documents) to which it is a party; each of the Transaction Documents (other than the Offering Documents), has been duly and validly authorized 7 -7- by each of the Issuers and, to the best knowledge of the Issuers, after due inquiry, Lemmerz to the extent it is a party thereto and each Transaction Document (other than the Offering Documents), when executed and delivered, will constitute a valid and legally binding agreement of such of the Issuers and, to the best knowledge of the Issuers, after due inquiry, Lemmerz that is a party thereto, enforceable against such of the Issuers and, to the best knowledge of the Issuers, after due inquiry, Lemmerz that is a party thereto, in each case in accordance with its terms (assuming due authorization, execution and delivery of each Transaction Document by any other party thereto) except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (g) Except as set forth in the Final Memorandum and the consent pursuant to the lex Friedrich which failure to obtain would not be material to Lemmerz and the Lemmerz Subsidiaries, taken as a whole, no consent, approval, authorization or order of any court or governmental agency or body is required for the performance of any of the Transaction Documents by the Issuers or, to the best knowledge of the Issuers, after due inquiry, Lemmerz, to the extent each is or will be a party thereto, or for the consummation by the Issuers or, to the best knowledge of the Issuers, after due inquiry, Lemmerz, of any of the transactions contemplated thereby, except to the extent set forth in the Acquisition Agreement (including, without limitation, the Lemmerz Disclosure Schedule and the HWI Disclosure Schedule) for such consents, approvals, authorizations or orders as have been obtained or made or as may be required under the Act and the TIA (with respect to the transactions contemplated by the Registration Rights Agreement) or as may be required under state securities or "Blue Sky" laws in connection with the purchase and distribution of the Securities by the Initial Purchasers; and none of the Issuers or, to the best knowledge of the Issuers, after due inquiry, Lemmerz or the Lemmerz Subsidiaries, is (i) in violation of its certificate of incorporation or bylaws, (ii) in violation of any statute, judgment, decree, order, rule or regulation applicable to 8 -8- it or any of its properties or assets, which violation would, individually or in the aggregate, have a Material Adverse Effect, or (iii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any of the Transaction Documents or any other contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or agreement or instrument to which it is a party or to which it is subject, which default would, individually or in the aggregate, have a Material Adverse Effect. (h) The execution, delivery and performance by the Issuers and, to the best knowledge of the Issuers, after due inquiry, Lemmerz, of each of the Transaction Documents to which it is a party, and the consummation by the Issuers and, to the best knowledge of the Issuers, after due inquiry, Lemmerz of the transactions contemplated thereby and the fulfillment of the terms thereof, will not violate, conflict with or constitute or result in a breach of or a default under (or an event that, with notice or lapse of time, or both, would constitute a breach of or a default under) any of (a) the terms or provisions of any indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, or agreement or instrument to which any of the Issuers or the Subsidiaries is, or to the best knowledge of the Issuers, after due inquiry, Lemmerz is, a party or to which any of their respective properties or assets are subject, which violation, conflict, breach or default would, individually or in the aggregate, have a Material Adverse Effect, (b) the certificate of incorporation or bylaws of any of the Issuers, the Subsidiaries or Lemmerz or (c) (assuming compliance with all applicable Federal and state securities and "Blue Sky" laws) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or other body applicable to the Issuers or the Subsidiaries or, to the best knowledge of the Issuers, after due inquiry, Lemmerz, or any of their respective properties or assets, which violation, conflict, breach or default would, individually or in the aggregate, have a Material Adverse Effect. (i) Each of the Transactions has been duly authorized by each of the Issuers and, to the best knowledge of the Issuers, after due inquiry, Lemmerz, to the extent each is or will be a party thereto. 9 -9- (j) The audited consolidated financial statements and schedules of each of the Company and Lemmerz included in the Memorandum present fairly the consolidated financial position, results of operations and cash flows of the Company and, to the best knowledge of the Issuers, after due inquiry, Lemmerz, respectively, at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis, except as otherwise stated therein; the unaudited consolidated financial statements and the related notes of the Company and Lemmerz included in the Memorandum present fairly the consolidated financial position, results of operations and cash flows of the Company and, to the best knowledge of the Company, after due inquiry, Lemmerz, respectively, at the dates and for the periods to which they relate, subject to year-end audit adjustments, and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis except as otherwise stated therein and have been prepared on a basis substantially consistent with that of the audited financial statements referred to above except as otherwise stated therein; to the best knowledge of the Company, after due inquiry, the summary and selected financial and statistical data included in the Memorandum present fairly the information shown therein and have been prepared and compiled on a basis consistent with the audited and unaudited financial statements included therein, except as otherwise stated therein; and KPMG Peat Marwick LLP and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft, which have examined certain of such financial statements and schedules as set forth in their reports included in the Memorandum, are independent public accounting firms as required by the Act. (k) (i) The pro forma financial statements and other pro forma financial information (including the notes thereto) included in the Memorandum (A) have been prepared in accordance with applicable requirements of Rule 11-02 of Regulation S-X promulgated under the Act and (B) have been properly computed on the bases described therein; (ii) the assumptions used in the preparation of the pro forma financial statements and other pro forma financial information included in the Memorandum are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. 10 -10- (l) Except as described in the Final Memorandum, there is not pending or, to the best knowledge of the Issuers, threatened any action, suit, proceeding, inquiry or investigation, governmental or otherwise, to which any of the Issuers or the Subsidiaries or, to the best knowledge of the Issuers, after due inquiry, Lemmerz or the Lemmerz Subsidiaries, is a party, or to which their respective properties or assets are subject, before or brought by any court, arbitrator or governmental agency or body, that, if determined adversely to the Issuers or the Subsidiaries or Lemmerz or the Lemmerz Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to be sold hereunder or the consummation of the transactions described in the Final Memorandum under the captions "Use of Proceeds" and "The Lemmerz Acquisition." (m) The Issuers and the Subsidiaries and, to the best knowledge of the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries, possess adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights and know-how (i) that are necessary to conduct their business as described in the Memorandum and (ii) the loss of which would, individually or in the aggregate, have a Material Adverse Effect. (n) None of the Issuers or the Subsidiaries has received and, to the best knowledge of the Issuers, after due inquiry, none of Lemmerz or the Lemmerz Subsidiaries has received, any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were sustained, would, individually or in the aggregate, have a Material Adverse Effect. (o) Each of the Issuers and the Subsidiaries has obtained and, to the best knowledge of the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries have obtained all licenses, permits, franchises and other governmental authorizations, the lack of which would, individually or in the aggregate, have a Material Adverse Effect. (p) Subsequent to the respective dates as of which information is given in the Final Memorandum and except as described therein, (i) the Issuers and the Subsidiaries 11 -11- have not incurred and, to the best knowledge of the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, have not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, in either case whether or not in the ordinary course of business, and (ii) the Issuers and the Subsidiaries or, to the best knowledge of the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, have not purchased any of their respective outstanding capital stock, or declared, paid or otherwise made any dividend or distribution of any kind on any of their respective capital stock or otherwise. (q) None of the Issuers or the Subsidiaries or, to the best knowledge of the Issuers, after due inquiry, Lemmerz or the Lemmerz Subsidiaries, has taken or will take any action that would cause this Agreement or the issuance or sale of the Securities to violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, in each case as in effect, or as the same may hereafter be in effect, on the Closing Date. (r) Each of the Issuers and the Subsidiaries has and, to the best knowledge of the Issuers, after due inquiry, each of Lemmerz and the Lemmerz Subsidiaries has, good and marketable title to all real property described in the Final Memorandum as being owned by it and good and marketable title to the leasehold estate in the real property described therein as being leased by it, free and clear of all liens, charges, encumbrances or restrictions, except, in each case, as described in the Final Memorandum or such as would not, individually or in the aggregate, have a Material Adverse Effect. (s) Each of the Issuers and the Subsidiaries has and, to the best knowledge of the Issuers, after due inquiry, each of Lemmerz and the Lemmerz Subsidiaries has, filed all necessary federal, state and foreign income and franchise tax returns, except where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect; and, other than taxes due thereon or tax deficiencies which any Issuer or Subsidiary or, to the best knowledge of the Issuers, after due inquiry, any of Lemmerz or the Lemmerz Subsidiaries, is contesting in good faith and for which any Issuer or Subsidiary or, to the best knowledge of the Issuers, after due inquiry, either Lemmerz or the Lemmerz Subsidiaries 12 -12- reasonably believe that it has provided adequate reserves, has paid all taxes due thereon and there is no tax deficiency that has been asserted against any Issuer or Subsidiary or, to the best knowledge of the Issuers, after due inquiry, either Lemmerz or the Lemmerz Subsidiaries that would, individually or in the aggregate, have a Material Adverse Effect. (t) (i) Immediately after the consummation of the Acquisition and the other transactions contemplated by the Transaction Documents, the fair value and present fair saleable value of the assets of the Company will exceed the sum of its stated liabilities and identified contingent liabilities; and (ii) the Company is not, nor will it be, after giving effect to the execution, delivery and performance of the Transaction Documents, to the extent it is a party thereto, and the consummation of the transactions contemplated thereby, (a) left with unreasonably small capital with which to carry on its business as it is proposed to be conducted, (b) unable to pay its debts (contingent or otherwise) as they mature or (c) insolvent. (u) Assuming the accuracy of the Initial Purchasers' representations and warranties set forth in Section 5 hereof, and the due performance by the Initial Purchasers of the covenants and agreements set forth in Section 5 hereof, the offer and sale of the Securities to the Initial Purchasers in the manner contemplated by this Agreement and the Final Memorandum does not require registration under the Act and the Indenture does not require qualification under the TIA. (v) No securities of the Company or any of its Subsidiaries are (i) of the same class (within the meaning of Rule 144A under the Act) as the Securities and (ii) listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or quoted in a U.S. automated interdealer quotation system. (w) None of the Issuers or the Subsidiaries, any of their respective Affiliates or any person acting on their behalf (other than the Initial Purchasers) has, and, to the best knowledge of the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries have not, engaged in any directed selling efforts (as that term is defined in Regulation S under the Act ("Regulation S")) with respect to the Securities; and the Issuers, the Subsidiaries, their 13 -13- respective Affiliates and any person acting on their behalf (other than the Initial Purchasers) have acted in accordance with the offering restrictions requirements of Regulation S. (x) (i) The Issuers have delivered to the Initial Purchasers a true and correct copy of each of the Transaction Documents that have been executed and delivered prior to the date of this Agreement and each other Transaction Document in the form substantially as it will be executed and delivered on or prior to the Closing Date, together with all related agreements and all schedules and exhibits thereto, and as of the date hereof there have been no material amendments, alterations, modifications or waivers of any of the provisions of any of the Transaction Documents since their date of execution or from the form in which any such Transaction Document has been delivered to the Initial Purchasers; and (ii) there exists as of the date hereof (after giving effect to the transactions contemplated by each of the Transaction Documents) no event or condition that would constitute a default or an event of default (in each case as defined in each of the Transaction Documents) under any of the Transaction Documents that would result in, individually or in the aggregate, a Material Adverse Effect or materially adversely effect the ability of the Company or to the best knowledge of the Issuers, after due inquiry, Lemmerz to consummate the Acquisition and the other Transactions. (y) Except as disclosed in the Final Memorandum and except as would not individually or in the aggregate have a Material Adverse Effect, (A) each of the Issuers and the Subsidiaries is and, to the best knowledge of the Issuers, after due inquiry, each of Lemmerz and the Lemmerz Subsidiaries is, in compliance with all applicable Environmental Laws, (B) each of the Issuers and the Subsidiaries has and, to the best knowledge of the Issuers, after due inquiry, each of Lemmerz and the Lemmerz Subsidiaries has, made all filings and provided all notices required under any applicable Environmental Law, and has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements, (C) there are no pending or, to the best knowledge of the Issuers, after due inquiry, threatened Environmental Claims against any of the Issuers or the Subsidiaries or to the best knowledge of the Issuers, after due inquiry, Lemmerz or the Lemmerz Subsidiaries and (D) none of the Issuers or the Subsidiaries has and, to 14 -14- the best knowledge of the Issuers, after due inquiry, neither Lemmerz nor the Lemmerz Subsidiaries have knowledge of any circumstances with respect to any of their respective properties or operations that could reasonably be anticipated to form the basis of an Environmental Claim against any of them or any of their subsidiaries or any of their respective properties or operations and the business operations relating thereto which Environmental Claims would, individually or in the aggregate, have a Material Adverse Effect. For purposes of this Agreement, the following terms shall have the following meanings: "Environmental Law" means any federal, state, local or municipal statute, law, rule, regulation, ordinance, code or rule and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment binding on any of the Issuers or the Subsidiaries or Lemmerz or the Lemmerz Subsidiaries, relating to pollution or protection of the environment or health or safety or any chemical, material or substance that is subject to regulation thereunder. "Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, written notices of responsibility, information requests, liens, written notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law. (z) None of the Issuers or the Subsidiaries and, to the best knowledge of the Issuers, after due inquiry, none of Lemmerz or the Lemmerz Subsidiaries is required to register as an "investment company" or a company "controlled by" an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (aa) Except as stated in the Final Memorandum, none of the Issuers or the Subsidiaries or, to the best knowledge of the Issuers, after due inquiry, none of Lemmerz or the Lemmerz Subsidiaries or any of their respective directors, officers or controlling persons, has taken, directly or indirectly, any action designed, or that might reasonably be expected, to cause or result, under the Act or otherwise, in, or that has constituted, stabilization or manipulation of the price of any security of any Issuer to facilitate the sale or resale of the Securities (it being understood that no representation or warranty is made as to any actions by the Initial Purchasers). 15 -15- 3. Purchase, Sale and Delivery of the Securities. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Issuers agree to issue and sell to the Initial Purchasers, and each of the Initial Purchasers severally agrees to purchase from the Issuers, at 97.5% of their principal amount, the respective aggregate principal amounts of the Securities set forth opposite their respective names on Exhibit C hereto. The obligations of the Initial Purchasers under this Agreement are several and not joint. One or more certificates in definitive form for the Securities that the Initial Purchasers have agreed to purchase hereunder, and in such denomination or denominations and registered in such name or names as each Initial Purchaser requests upon notice to the Company at least 48 hours prior to the Closing Date, shall be delivered by or on behalf of the Company, against payment by or on behalf of the Initial Purchasers of the purchase price therefor by wire transfer of immediately available funds net of the overnight cost of such funds to the account of the Company previously designated by it in writing. Such delivery of and payment for the Securities shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022, at 9:00 a.m., New York time, on June 30, 1997, or at such date as the Initial Purchasers and the Company may agree upon, such time and date of delivery against payment being herein referred to as the "Closing Date." The Company will make such certificate or certificates for the Securities available for checking and packaging by the Initial Purchasers at the offices in New York, New York of CIBC Wood Gundy Securities Corp. at least 24 hours prior to the Closing Date. 4. Registration Rights of Holders of Securities. The Initial Purchasers and their direct and indirect transferees of the Securities will have such rights with respect to the registration thereof under the Act and qualification of the Indenture under the TIA as are set forth in the Registration Rights Agreement. 5. Resale of Securities. Each Initial Purchaser represents and warrants to, and agrees with, the Company that (a) it is a "qualified institutional buyer" as defined in Rule 144A under the Act ("QIB"); (b) it has not and will not, directly or indirectly, solicit offers for, or offer or sell, the Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act; (c) it has not and will not, directly or indirectly, engage in any "directed selling 16 -16- efforts" (as defined in Regulation S under the Act); and (d) it has and will solicit offers for the Securities only from, and will offer, sell and deliver the Securities only to, (A) in the case of offers inside the United States, (i) persons whom such Initial Purchasers reasonably believe to be QIBs or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to such Initial Purchasers that each such account is a QIB to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A or (ii) a limited number of other institutional investors each of which is reasonably believed by the Initial Purchaser to be an "accredited investor" (as defined in Rule 501(a)(1)(2), (3) or (7) of the Act) that, prior to their purchase of the Securities, deliver to the Initial Purchaser a letter containing the representations and agreements set forth in Annex I to the Final Memorandum and (B) in the case of offers outside the United States, to persons other than U.S. Persons in compliance with Regulation S under the Act ("foreign purchasers," which terms shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)); provided, however, that, in the case of this clause (B), in purchasing such Securities such persons are deemed to have represented and agreed as provided under the caption "Notice to Investors" contained in the Final Memorandum. 6. Certain Covenants. The Issuers, jointly and severally, covenant and agree with the Initial Purchasers that: (a) None of the Issuers will amend or supplement the Final Memorandum or any amendment or supplement thereto of which the Initial Purchasers shall not previously have been advised and furnished a copy for a reasonable period of time prior to the proposed amendment or supplement and as to which the Initial Purchasers or counsel for the Initial Purchasers shall reasonably object. The Issuers will promptly, upon the reasonable request of the Initial Purchasers or counsel to the Initial Purchasers, make any amendments or supplements to the Preliminary Memorandum or the Final Memorandum that may be reasonably necessary or advisable in connection with the resale of the Securities by the Initial Purchasers. (b) The Issuers will cooperate with the Initial Purchasers in arranging for the qualification of the Securities for offering and sale under the securities or "Blue Sky" laws of such jurisdictions as the Initial Purchasers 17 -17- may designate and will continue such qualifications in effect for as long as may be necessary to complete the distribution of the Securities by the Initial Purchasers; provided, however, that in connection therewith none of the Issuers shall be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or to take any other action that would subject it to general service of process or to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject. (c) If, at any time prior to the completion of the distribution by the Initial Purchasers of the Securities or, if issued, the Private Exchange Notes, any event occurs or information becomes known as a result of which the Final Memorandum as then amended or supplemented would include any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it is necessary at any time to amend or supplement the Final Memorandum to comply with applicable law, the Issuers will promptly notify the Initial Purchasers thereof (who thereafter will not use such Final Memorandum until appropriately amended or supplemented) and will prepare, at the expense of the Issuers, an amendment or supplement to the Final Memorandum that corrects such statement or omission or effects such compliance. (d) The Company will, without charge, provide to each Initial Purchaser and to counsel to the Initial Purchasers as many copies of the Preliminary Memorandum and the Final Memorandum or any amendment or supplement thereto as the Initial Purchasers may reasonably request. (e) During the period of five years from the Closing Date, the Company will furnish to the Initial Purchasers (a) as soon as available, a copy of each report and other communication (financial or otherwise) of the Company mailed to the Trustee or the holders of the Securities, stockholders or filed with the Commission or any national securities exchange on which any class of securities of the Company may be listed and (b) from time to time such other information concerning the Company as you may reasonably request. (f) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions 18 -18- hereof (other than solely by reason of a default by the Initial Purchasers of their obligations hereunder after all conditions hereunder have been satisfied in accordance herewith) or if this Agreement shall be terminated by the Initial Purchasers because of any failure or refusal on the part of the Issuers to comply with the terms or fulfill any of the conditions of this Agreement, the Company agrees to reimburse you for all reasonable out-of-pocket expenses (including fees and expenses of counsel for the Initial Purchasers) incurred by you in connection herewith. (g) The Company will apply the net proceeds from the sale of the Securities as set forth under "Use of Proceeds" in the Final Memorandum. (h) Prior to the Closing Date, the Company will furnish to the Initial Purchasers, as soon as they have been prepared by or are available to the Company, a copy of any unaudited interim consolidated financial statements of the Company for any period subsequent to the period covered by the most recent financial statements appearing in the Final Memorandum. (i) None of the Issuers or any of their respective Affiliates will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any "security" (as defined in the Act) which could be integrated with the sale of the Securities in a manner which would require the registration under the Act of the Securities. (j) The Issuers will not, and will not permit any of the Subsidiaries to, solicit any offer to buy or offer to sell the Securities by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act. (k) For so long as any of the Securities remain outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Act and not able to be sold in their entirety under Rule 144 under the Act (or any successor provision), the Company will make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act. 19 -19- (l) The Issuers will use their best efforts to (i) permit the Securities to be included for quotation on the Private Offering, Resales, and Trading through Automated Linkages Market ("PORTAL") and (ii) permit the Securities to be eligible for clearance and settlement through The Depository Trust Company ("DTC"). (m) In connection with Securities offered and sold in an offshore transaction (as defined in Regulation S), the Company will not register any transfer of such Securities not made in accordance with the provisions of Regulation S and will not, except in accordance with the provisions of Regulation S, if applicable, issue any such Securities in the form of definitive securities. 7. Expenses. Notwithstanding any termination of this Agreement (pursuant to Section 11 or otherwise), the Company agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by the Issuers of their obligations hereunder: (i) the preparation, printing or reproduction of each Preliminary Memorandum, the Final Memorandum (including financial statements) and each amendment or supplement to it; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Memorandum and all amendments or supplements to it as may be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp taxes in connection with the original issuance and sale of the Securities and trustees' fees; (iv) the reproduction and delivery of this Agreement, the preliminary and supplemental "Blue Sky" memoranda, including filing fees and reasonable fees and disbursements of Cahill Gordon & Reindel, counsel to the Initial Purchasers, relating thereto, and all other agreements or documents reproduced and delivered in connection with the offering of the Securities; (v) the registration or qualification of the Securities for offer and sale under the securities or Blue Sky laws of the several states (including the reasonable fees, expenses and disbursements of counsel to the Initial Purchasers relating to such registration and qualification); (vi) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities; (vii) the fees and expenses of the Company's accountants and the fees and expenses of counsel (including local and special counsel) for the Issuers; (viii) fees and expenses of the Trustee including fees and expenses of its 20 -20- counsel; and (ix) any fees charged by investment rating agencies for the rating of the Securities. 8. Conditions of the Initial Purchasers' Obligations. The several obligations of the Initial Purchasers to purchase and pay for the Securities are subject to the accuracy of the representations and warranties contained herein, to the performance by the Issuers of their respective covenants and agreements hereunder and to the following additional conditions unless waived in writing by the Initial Purchasers: (i) None of the issuance and sale of the Securities pursuant to this Agreement, the Transactions or any other transactions contemplated by any of the Transaction Documents or the Final Memorandum shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued; and there shall not have been any legal action, order, decree or other administrative proceeding instituted or threatened against any of the Issuers or against you relating to the issuance of the Securities or the Initial Purchasers' activities in connection therewith, the Transactions or any other transaction contemplated by any of the Transaction Documents or the Final Memorandum. (ii) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting the condition (financial or other), business, properties, prospects, net worth or results of operations of the Issuers, the Subsidiaries, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, not contemplated by the Final Memorandum that, in your opinion, would materially adversely affect the market for the Securities, or (ii) any event or development relating to or involving any of the Issuers or Lemmerz or any of the respective officers or directors of the Issuers or Lemmerz that makes any statement made in the Final Memorandum untrue or that, in the opinion of the Issuers and their counsel or the Initial Purchasers and their counsel, requires the making of any addition to or change in the Final Memorandum in order to state a material fact necessary in order to make the statements made therein not misleading or to comply with law. (iii) The Initial Purchasers shall have received an opinion of counsel to the Issuers in form and substance satisfactory to the Initial Purchasers and counsel to the 21 -21- Initial Purchasers, dated the Closing Date, of each of (i) Skadden, Arps, Slate, Meagher & Flom LLP, substantially in the form of Exhibit D-1 hereto, and (ii) Daniel M. Sandberg, Esquire, General Counsel to the Company substantially in the form of Exhibit D-2. (iv) The Initial Purchasers shall have received an opinion, dated the Closing Date, of Cahill Gordon & Reindel, counsel to the Initial Purchasers, with respect to the sufficiency of certain legal matters relating to this Agreement and such other related matters as the Initial Purchasers may require. In rendering such opinion, Cahill Gordon & Reindel shall have received and may rely upon such certificates and other documents and information as they may reasonably request to pass upon such matters. In addition, in rendering their opinion, Cahill Gordon & Reindel may state that its opinion is limited to matters of New York, Delaware corporate and federal law. (v) The Initial Purchasers shall have received, from KPMG Peat Marwick LLP, independent public accountants for the Issuers, and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft, independent public accountants for Lemmerz, "comfort" letters dated the date hereof and the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers and Cahill Gordon & Reindel, counsel to the Initial Purchasers. (vi) The representations and warranties of the Issuers contained in this Agreement which are qualified as to materiality shall be true and correct, and those representations and warranties of the Issuers which are not so qualified shall be true and correct in all material respects, on and as of the Closing Date; the Issuers shall have complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date. (vii) There shall not have been any change in the capital stock of the Issuers nor any material increase in the consolidated short-term or long-term debt of the Issuers, in each case, from that set forth or contemplated in the Final Memorandum (or any amendment or supplement thereto) or contemplated by the Transaction Documents and (b) the Issuers shall not have any liabilities or obligations, contingent or otherwise (whether or not in the ordinary course of business), that are material to the Issu- 22 -22- ers, taken as a whole, other than those reflected in the Final Memorandum (or any amendment or supplement thereto) or contemplated by the Transaction Documents. (viii) You shall have received certificates, dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company and each Subsidiary Guarantor (or such other officers as are acceptable to you), to the effect that each of the conditions to closing set forth in this Section 8 have been satisfied. (ix) There shall have been no material amendments, alterations, modifications or waivers of any provisions of the Acquisition Agreement since the date of this Agreement and the Acquisition Agreement shall be in full force and effect; and the Acquisition shall occur immediately following the closing of the sale of the Securities by the Company hereunder. (x) The Initial Purchasers shall have received from the Company a true and correct copy of the Credit Agreement, dated on or about the Closing Date, and there shall have been no material amendments, alterations, modifications or waivers of any provisions of the Credit Agreement since the date of this Agreement; the Credit Agreement shall be in full force and effect; simultaneously with the closing of the sale of the Securities by the Company hereunder, the Company shall have available not less than an aggregate of $250,000,000 in revolving credit borrowings, pursuant to the Credit Agreement. (xi) The Issuers shall have furnished or caused to be furnished to you such further certificates and documents as you shall have reasonably requested. Any certificate or document signed by any officer of an Issuer and delivered to you or to counsel for the Initial Purchasers shall be deemed a representation and warranty by such Issuer to each Initial Purchaser as to the statements made therein. All such opinions, certificates, letters, schedules, documents or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are reasonably satisfactory in all material respects to the Initial Purchasers and counsel to the Initial Purchasers. The Issuers shall furnish to the Initial Purchasers such conformed copies of such opinions, certificates, letters, schedules, documents 23 -23- and instruments in such quantities as the Initial Purchasers shall reasonably request. 9. Indemnification and Contribution. (a) Each Issuer jointly and severally agrees to indemnify and hold harmless each Initial Purchaser, and each person, if any, who controls any of the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser or such controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in (A) the Memorandum or (B) any application or other document, or any amendment or supplement thereto, executed by any Issuer or based upon written information furnished by or on behalf of any Issuer filed in any jurisdiction in order to qualify the Securities under the securities or "Blue Sky" laws thereof or filed with the Commission or any securities association or securities exchange (each an "Application"); or (ii) the omission or alleged omission to state, in the Memorandum or any amendment thereto, or any Application, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse, as incurred, each Initial Purchaser and each such controlling person for any reasonable and documented out-of-pocket legal or other expenses reasonably incurred by the Initial Purchasers or such controlling person in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, that none of the Issuers will be liable in any such case to an Initial Purchaser or any controlling person of such Initial Purchaser to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Memorandum or any amendment thereto or any Application in reliance upon and in conformity with written information furnished to the Issuers by or on behalf of such Initial Purchaser specifically for use therein. This indemnity agreement will be in addition to any liability that the 24 -24- Issuers may otherwise have to the indemnified parties. None of the Issuers will, without the prior written consent of the Initial Purchasers, which shall not be unreasonably withheld or delayed, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification by the Initial Purchasers may be sought hereunder (whether or not the Initial Purchasers or any person who controls either of the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional release (or any other release reasonably acceptable to the Initial Purchasers) of the Initial Purchasers and each such controlling person from all liability arising out of such claim, action, suit or proceeding. (b) Each Initial Purchaser will severally and not jointly indemnify and hold harmless the Issuers, their respective directors, officers and each person, if any, who controls any of the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which any of the Issuers or any such director, officer or controlling person may become subject under the Act, the Exchange Act, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Memorandum or any amendment thereto or any Application or (ii) the omission or the alleged omission to state therein a material fact required to be stated in the Memorandum or any amendment thereto, or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to any of the Issuers by or on behalf of such Initial Purchaser specifically for use therein; and, subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any reasonable and documented out-of-pocket legal or other expenses reasonably incurred by any of the Issuers or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability that the Initial Purchasers may otherwise have to the indemnified parties. The Initial Purchasers will not, without the prior written consent of the Issuers, which shall not be unreasonably withheld or delayed, settle or 25 -25- compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification by any of the Issuers may be sought hereunder (whether or not any of the Issuers or any person who controls the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional release of any such Issuer and each such controlling person from all liability arising out of such claim, action, suit or proceeding. (c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability that it may have to any indemnified party except to the extent that such omission results in the forfeiture by the indemnifying party of substantial rights and defenses. In case any such action is brought against any indemnified party, and such indemnified party notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded, based on the advice of counsel, that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to any such indemnifying party then the indemnifying parties shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses, other than reasonable and documented out-of-pocket costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately pre- 26 -26- ceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Initial Purchasers in the case of paragraph (a) of this Section 9 or the Issuers in the case of paragraph (b) of this Section 9, representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or actions); (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying parties; or (iii) the indemnifying party shall have failed to assume the defense or retain counsel reasonably satisfactory to the indemnified party. (d) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 9 is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), other than as a result of the proviso to Section 9(a), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Securities or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Issuers on the one 27 -27- hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total proceeds from the offering of the Securities (before deducting expenses other than Initial Purchasers' discounts and commissions) received by the Issuers bear to the total initial purchasers' discounts and commissions received by the Initial Purchasers. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or the Initial Purchasers on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. The Issuers and the Initial Purchasers agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Issuers on the one hand and the Initial Purchasers on the other hand were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (d). Notwithstanding any other provision of this paragraph (d), the Initial Purchasers shall not be obligated to make contributions hereunder that in the aggregate exceed the total initial purchasers' discounts and commissions received by the Initial Purchasers under this Agreement, less the aggregate amount of any damages that the Initial Purchasers have otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls any of the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Initial Purchasers, and each director of any of the Issuers, each officer and each person, if any, who controls any of the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Issuers. (e) Notwithstanding anything to the contrary in this Article 9, the indemnification and contribution provisions of the Registration Rights Agreement shall govern any claim with respect thereto. 10. Survival Clause. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Issuers, their respective officers and the Initial Purchasers set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Issuers, any of their respective officers or directors, the Initial Purchasers or any controlling person referred to in Section 9 hereof and (ii) delivery of and payment for the Securities, and shall be binding upon and shall inure to the benefit of, any successors, 28 -28- assigns, heirs, personal representatives of the Issuers, the Initial Purchasers and indemnified parties referred to in Section 9 hereof. The respective agreements, covenants, indemnities and other statements set forth in Sections 7 and 9 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement. 11. Termination. (A) This Agreement may be terminated in the sole discretion of the Initial Purchasers by notice to the Issuers given in the event that the Issuers shall have failed, refused or been unable to satisfy all conditions on its respective part to be performed or satisfied hereunder on or prior to the Closing Date or, if at or prior to the Closing Date: (i) any of the Issuers or the Subsidiaries or Lemmerz or the Lemmerz Subsidiaries shall have sustained any loss or interference with respect to their respective businesses or properties from fire, flood, hurricane, earthquake, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding, which loss or interference has had or has a material adverse effect on the business, condition (financial or other), properties, prospects or results of operations of the Issuers, the Subsidiaries, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, or there shall have been any material adverse change, or any development involving a prospective material adverse change (including without limitation a change in management or control of the Issuers), in the business, condition (financial or other), properties, prospects or results of operations of the Issuers, the Subsidiaries, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, except as described in or contemplated by the Final Memorandum (exclusive of any amendment or supplement thereto); (ii) trading in securities generally on the New York or American Stock Exchange shall have been suspended or minimum or maximum prices shall have been established on any such exchange; (iii) a banking moratorium shall have been declared by New York or United States authorities; or (iv) there shall have been (A) an outbreak or escalation of hostilities between the United States and any foreign power, (B) an outbreak or escalation of any other insurrection or armed conflict involving the United States 29 -29- or (C) any material change in the financial markets of the United States that, in the sole judgment of the Initial Purchasers, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities as contemplated by the Final Memorandum, as amended as of the date hereof. (b) Termination of this Agreement pursuant to this Section 11 shall be without liability of any party to any other party except as provided in Section 10 hereof. 12. Notices. All communications hereunder shall be in writing and, if sent to the Initial Purchasers, shall be mailed or delivered or telecopied and confirmed in writing to the Initial Purchasers c/o CIBC Wood Gundy Securities Corp., 425 Lexington Avenue, 3rd Floor, New York, New York 10017, Attention: Walter F. McLallen, and with a copy to Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, Attention: Roger Meltzer, Esq. If sent to the Company or any of the Subsidiary Guarantors, shall be mailed, delivered or telegraphed and confirmed in writing, to Hayes Wheels International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174, Attention: General Counsel and with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, One Rodney Square, Wilmington, Delaware 19801, Attention: Robert B. Pincus, Esq. 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers and each of the Issuers and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Issuers contained in Section 9 of this Agreement shall also be for the benefit of any person or persons who control the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained in Section 9 of this Agreement shall also be for the benefit of the directors of the Issuers, their respective officers and any person or persons who controls any Issuer within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of Securities from the Initial Purchasers will be deemed a successor because of such purchase. 30 -30- 14. Joint and Several Obligations. All of the obligations of the Issuers hereunder shall be joint and several obligations of each of them. 15. Information Supplied by the Initial Purchasers. The statements set forth in the first legend on the inside front cover of the Memorandum and in the penultimate and last sentence of the third paragraph and the seventh paragraph under the heading "Plan of Distribution" constitute the only information furnished by the Initial Purchasers to the Issuers for purposes of Section 2(a) hereof. 16. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof. 17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW. 18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 31 -31- If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Issuers and the Initial Purchasers. Very truly yours, HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation By: ---------------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-CALIFORNIA, INC., a Delaware corporation By: ---------------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-GEORGIA, INC., a Delaware corporation By: ---------------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-INDIANA, INC., a Delaware corporation By: ---------------------------------------------- Name: Title: 32 -32- HAYES WHEELS INTERNATIONAL-MEXICO, INC., a Delaware corporation By: ---------------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-MICHIGAN, INC., a Michigan corporation By: ---------------------------------------------- Name: Title: MOTOR WHEEL CORPORATION, an Ohio corporation By: ---------------------------------------------- Name: Title: MWC ACQUISITION SUB, INC., a Delaware corporation By: ---------------------------------------------- Name: Title: 33 -33- The foregoing Agreement is hereby confirmed and accepted as of the date first above written. CIBC WOOD GUNDY SECURITIES CORP. By: -------------------------- Name: Title: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: -------------------------- Name: Title: BEAR, STEARNS & CO. INC. By: -------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: -------------------------- Name: Title: SALOMON BROTHERS INC By: -------------------------- Name: Title: 34 Exhibit A Subsidiary Guarantors Hayes Wheels International-California, Inc. Hayes Wheels International-Georgia, Inc. Hayes Wheels International-Indiana, Inc. Hayes Wheels International-Mexico, Inc. Hayes Wheels International-Michigan, Inc. Motor Wheel Corporation MWC Acquisition Sub, Inc. 35 Exhibit B-1 Company Subsidiaries Hayes (Europe), Ltd. Hayes Wheels, S.p.A. Hayes Wheels Autokola NH, as Reliable Transportation Components Inc. Hayes Wheels International - Missouri, Inc. Hayes Wheels International - Kentuckulus, Inc. Hayes Wheels Aftermarket, Inc. Hayes Wheels Japan Limited Hayes Wheels de Espana, S.A. HWI Service Corporation Hayes Wheels Foreign Sales Corp. Motor Wheel de Mexico, S.A. de C.V. Motor Wheel Corporation of Canada, Ltd. AMW Holdings, Inc. HL Holdings BV HL Holdings de Espana HL Holding GmbH Hayes Wheels Hungary Consulting Limited Liability Company Newco No. 17 Vermogensverwaltungs GmbH (post-Acquisition) Newco No. 18 Vermogensverwaltungs GmbH (post-Acquisition) Company Joint Venture and Other Interests Numbers in parentheses represent percent of total owned by the Company or one of its subsidiaries. Hayes Wheels de Venezuela, C.A. (49) Hayes Wheels de Mexico, S.A. de C.V. (40) Aluminum Wheel Technology, Inc. (50) Riviera Tool Company (30) Metalurgica FPS do Brasil, Ltda. (49) 36 -2- Exhibit B-2 Lemmerz Subsidiaries Metaalgieterij Geisen B.V. Lemmerz Espanola S.A. Lemmerz-Werke GmbH Lemmerz-Werke Wohnungsbaugesellschaft mbH Lemmerz Service System N.V. Lemmerz Belgie N.V. Lemmerz Comerico e Participacoes SRL Lemmerz Canada Inc. PSW Prazisions-und Spezialwerkzeuge AG Lemmerz-Inci-Jany Sanayi A.S. Lemmerz Joint Ventures and Other Interests Numbers in parentheses represent percent of total owned by Lemmerz or one of its subsidiaries. Continental Lemmerz (Portugal), Componentes para Automoveis, Lda. (49) Borlem S.A. Empreendimentos Industriais (45) Reynolds-Lemmerz Industries (25) Kalyani-Lemmerz Ltd. (25) Jantas Jant Sanayi ve Ticaret S.A. (25) Siam Lemmerz Co., Ltd. (25) Additional Information See Section 4.3(c), paragraph (ii), of the Lemmerz Disclosure Schedule delivered pursuant to the Acquisition Agreement regarding certain qualifying shares held by third parties in certain Lemmerz Subsidiaries. 37 Exhibit C
Principal Amount Initial Purchaser of Securities - ----------------- ---------------- CIBC Wood Gundy Securities Corp. $125,000,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated 50,000,000 Bear, Stearns & Co. Inc. 25,000,000 Morgan Stanley & Co. Incorporated 25,000,000 Salomon Brothers Inc 25,000,000 ------------ Total $250,000,000 ============
38 Exhibit D-1 Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP Opinion, dated the Closing Date and addressed to the Initial Purchasers, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Issuers, to the effect that: (i) The Securities have been duly and validly authorized by each of the Issuers other than Hayes Wheels International-Michigan, Inc. (the "Delaware Issuers") and when executed by the Delaware Issuers and authenticated by the Trustee in accordance with the provisions of the Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Delaware Issuers, entitled to the benefits of the Indenture and enforceable against the Delaware Issuers in accordance with their terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (ii) The Exchange Notes, the Private Exchange Notes and the guarantees thereof have been duly and validly authorized by the Delaware Issuers and when executed by the Delaware Issuers and authenticated by the Trustee in accordance with the provisions of the Registration Rights Agreement and the Indenture, and delivered to the Initial Purchasers in accordance with the terms of the Registration Rights Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Delaware Issuers, entitled to the benefits of the Indenture and enforceable against the Delaware Issuers in accordance with their terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). 39 -2- (iii) Each of the Delaware Issuers has the requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes; the Indenture has been duly and validly authorized by the Delaware Issuers and, when executed and delivered by the Delaware Issuers (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of the Delaware Issuers, enforceable against the Delaware Issuers in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iv) Each of the Delaware Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The Registration Rights Agreement has been duly and validly authorized by the Delaware Issuers and, when executed and delivered by the Delaware Issuers, will constitute a valid and legally binding agreement of the Delaware Issuers, enforceable against the Delaware Issuers in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (v) Each of the Delaware Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under the Purchase Agreement. The Purchase Agreement has been duly and validly authorized by the Delaware Issuers and, when executed and delivered by the Delaware Issuers, will constitute a valid and legally binding agreement of the Delaware Issuers, enforceable against the Delaware Issuers in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general prin- 40 -3- ciples of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (vi) No Governmental Approval is required for the performance by the Delaware Issuers of their respective obligations under the Offering Documents or the consummation of the transactions contemplated thereby relating to the Securities. As used in such counsel's opinion, (a) the term "Applicable Laws" means only the General Corporation Law of the State of Delaware and those laws, rules and regulations of the State of New York and the United States of America which, in our experience, are normally applicable to transactions of the type contemplated by the Purchase Agreement (other than federal and state securities laws, the TIA and the rules and regulations of the National Association of Securities Dealers, Inc.) without having made any special investigation as to the applicability of any specific law, rule or regulation except as specified herein; (b) the term "Governmental Authorities" means any Delaware, New York or federal executive, legislative, judicial, administrative or regulatory body; and (c) the term "Governmental Approval" means any consent, approval, license, authorization or validation of, or filing, qualification or registration with, any Governmental Authority pursuant to Applicable Laws. (vii) The execution, delivery and performance by the Delaware Issuers of each of the Offering Documents and the Credit Agreement and the consummation by the Delaware Issuers of the transactions contemplated thereby and the fulfillment of the terms thereof, will not violate or conflict with the certificate of incorporation or bylaws of any of the Delaware Issuers. (viii) Each of the Transactions has been duly authorized by each of the Delaware Issuers, which is a party thereto. (ix) The statements set forth under the captions "Description of the Notes" and "Description of Other Indebtedness" in the Final Memorandum, insofar as such statements purport to summarize legal documents or statements of law or legal conclusions are accurate summaries in all 41 -4- material respects and the Indenture and the Securities conform in all material respects to the descriptions thereof thereunder. (x) None of the Issuers or the Subsidiaries is required to register as an "investment company" or a company "controlled by" an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended. (xi) Neither the consummation of the transactions contemplated by the Purchase Agreement nor the sale, issuance, execution or delivery of the Securities will violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. (xii) The Indenture appears on its face to be appropriately responsive in all material respects to the requirements of the TIA. (xiii) Assuming (i) the accuracy of the representations and warranties of the Company set forth in Section 2 of the Purchase Agreement and of you in Section 5 of the Purchase Agreement, (ii) the due performance by the Company of the covenants and agreements set forth in Section 6 of the Purchase Agreement and the due performance by you of the covenants and agreements set forth in Sections 5 and 6 of the Purchase Agreement, (iii) your compliance with the offering and transfer procedures and restrictions described in the Offering Memorandum, (iv) the accuracy of the representations and warranties made in accordance with the Purchase Agreement and the Offering Memorandum by purchasers to whom you initially resell Securities and (v) that purchasers to whom you initially resell Securities receive a copy of the Offering Memorandum prior to such sale, the offer, sale and delivery of the Securities to you in the manner contemplated by the Purchase Agreement and the Offering Memorandum and the initial resale of the Securities by you in the manner contemplated in the Offering Memorandum and the Purchase Agreement, do not require registration under the Act and the Indenture does not require qualification under the TIA, it being understood that we express no opinion as to any subsequent resale of any Security. In addition, we have participated in conferences with officers and other representatives of the Issuers, representatives of the independent public accountants and representatives of the Initial Purchasers at which the contents of the Memoran- 42 -5- dum were discussed and, although we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum (except as indicated in clause (ix) above) and have not made any independent check or verification thereof, on the basis of the foregoing (relying as to materiality to a large extent upon the statements of officers and other representatives of each of the Issuers) no facts have come to our attention that have caused us to believe that the Final Memorandum as of its date and as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that we express no opinion on or belief with respect to the financial statements or other financial and statistical data or information included in the Final Memorandum or on the information contained in the Final Memorandum concerning Lemmerz and the Lemmerz Subsidiaries). 43 Exhibit D-2 Form of Opinion of Daniel M. Sandberg, Esq. Opinion, dated the Closing Date and addressed to the Initial Purchasers, of Daniel M. Sandberg, Esq., General Counsel to the Company, to the effect that: (i) Each of the Issuers has been duly incorporated and is validly existing in good standing, as a corporation under the laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as described in the Final Memorandum and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except when the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect; the outstanding shares of capital stock of the Issuers and the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights and, in the case of the Subsidiary Guarantors and the Subsidiaries, except in connection with the Credit Agreement, are owned free and clear of all liens, encumbrances, equities and restrictions on transferability (other than those imposed by the Act and the state securities or "Blue Sky" laws); to the best of my knowledge, except as set forth in the Final Memorandum, no options, warrants or other rights to purchase from any Issuer or any Subsidiary or, agreements or other obligations of any Issuer or any Subsidiary to issue or other rights to cause the Company, to convert any obligation into, or exchange any securities for, shares of capital stock or ownership interests in any Issuer or any Subsidiary are outstanding. (ii) The Guarantee has been duly and validly authorized by Hayes Wheels International-Michigan, Inc. ("HWIM") and Motor Wheel Corporation ("MWC") and when the Securities are executed by the Company and authenticated by the Trustee in accordance with the provisions of the Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obliga- 44 -2- tion of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iii) The guarantee of the Exchange Notes and the Private Exchange Notes have been duly and validly authorized by HWIM and MWC and when the Exchange Notes and the Private Exchange Notes have been executed by the Company and authenticated by the Trustee in accordance with the provisions of the Registration Rights Agreement and the Indenture, and delivered to the Initial Purchasers in accordance with the terms of the Registration Rights Agreement, will have been duly executed, issued and delivered and will constitute a valid and legally binding obligation of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iv) Each of HWIM and MWC has the requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes; the Indenture has been duly and validly authorized by HWIM and MWC and, when executed and delivered by HWIM and MWC (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity. (v) Each of HWIM and MWC has the requisite corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The 45 -3- Registration Rights Agreement has been duly and validly authorized by HWIM and MWC and, when executed and delivered by HWIM and MWC, will constitute a valid and legally binding agreement of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (vi) Each of HWIM and MWC has the requisite corporate power and authority to execute, deliver and perform its obligations under the Purchase Agreement. The Purchase Agreement has been duly and validly authorized by HWIM and MWC and, when executed and delivered by HWIM and MWC, will constitute a valid and legally binding agreement of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (vii) No consent, approval, authorization or order of any governmental agency or body, or to the best of my knowledge, any court, is required for the performance of any of the Offering Documents or any of the agreements contemplated thereby or delivered in connection therewith, or the consummation of the transactions contemplated thereby, except such as may be required and have been obtained as described in the Final Memorandum or as may be required under the Act, the TIA or state securities or "Blue Sky" laws in connection with the purchase and distribution of the Securities or the exchange of the Exchange Notes and the Private Exchange Notes. (viii) None of the Issuers or the Subsidiaries is (a) in violation of its certificate of incorporation or bylaws, (b) in violation of any statute, judgment, decree, 46 -4- order, rule or regulation applicable to any of its properties or assets, which violation would, individually or in the aggregate, have a Material Adverse Effect or (c) in breach of or in default under any of the Offering Documents or any material contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or other material agreement or instrument to which it is a party or to which it is subject, which breach or default would individually or in the aggregate, have a Material Adverse Effect. (ix) The execution, delivery and performance by the Issuers, to the extent each is a party thereto, of each of the Offering Documents and the Credit Agreement and the consummation by the Issuers of the transactions contemplated thereby and the fulfillment of the terms thereof, will not violate, conflict with or constitute or result in a breach of or a default under (or an event that with notice or lapse of time, or both, would constitute a breach of or a default under) any of the terms or provisions of (a) the certificate of incorporation or bylaws of HWIM, (b) any material indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement or other material agreement or instrument to which any of the Issuers or the Subsidiaries is a party or to which any of their respective properties or assets are subject or (c) to the best of my knowledge (assuming compliance with all applicable Federal and state securities and "Blue Sky" laws) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or body applicable to any of the Issuers or the Subsidiaries or any of their respective properties or assets, which violation, conflict, breach or default would, individually or in the aggregate, have any Material Adverse Effect. (x) Except as described in the Final Memorandum, there are no legal or governmental proceedings pending or threatened to which any of the Issuers or the Subsidiaries is a party or to which the respective properties or assets of the Issuers or the Subsidiaries are subject that would be required to be described in a prospectus pursuant to the Act that are not described in the Final Memorandum, or that seek to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to the Initial Purchasers or the consummation of the transactions described in the Final Memorandum under the captions "Use of Proceeds" or "The Lemmerz Acquisition". 47 -5- (xi) Each of the Transactions has been duly authorized by HWIM to the extent it is or will be a party thereto. I have participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company, outside counsel for the Company, your counsel and your representatives at which the contents of the Memorandum and related matters were discussed and, although I am not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, I advise you that, on the basis of the foregoing (relying, with respect to Lemmerz, primarily upon (i) the representations and warranties of Lemmerz and the shareholders of Lemmerz contained in the Acquisition Agreement and (ii) the due diligence reports prepared by counsel and other representatives of the Company retained in connection with the Company's acquisition of Lemmerz (copies of which have been provided to your counsel in connection with their due diligence review of the Company); provided, however, that I have not independently investigated or verified, nor do I assume any responsibility for, the information contained in such reports), no facts have come to my attention that lead me to believe that the Final Memorandum as of its date and as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that I have not been requested to and do not make any comment with respect to the financial statements and the notes thereto and other financial and accounting information included or incorporated by reference in the Final Memorandum). EX-1.2 3 PURCHASE AGREEMENT - JULY NOTES 1 EXHIBIT 1.2 HAYES WHEELS INTERNATIONAL, INC. $150,000,000 9 1/8% Senior Subordinated Notes due 2007 PURCHASE AGREEMENT July 16, 1997 CIBC WOOD GUNDY SECURITIES CORP. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED c/o CIBC Wood Gundy Securities Corp. 425 Lexington Avenue 3rd Floor New York, New York 10017 Ladies and Gentlemen: Hayes Wheels International, Inc., a Delaware corporation (the "Company"), and each of the Company's subsidiaries listed in Exhibit A hereto (each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and, together with the Company, the "Issuers") hereby confirm their agreement with you (the "Initial Purchasers"), as set forth below. 1. The Securities. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Initial Purchasers $150,000,000 aggregate principal amount of its 9 1/8% Senior Subordinated Notes due 2007 (the "Notes"). The obligations of the Company under the Indenture (as hereinafter defined) and the Notes will be unconditionally guaranteed (the "Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated July 15, 1997, among the Company, The Bank of New York, a New York corporation, as trustee (the "Trustee"), and the Subsidiary Guarantors. The Notes and the Guarantees are hereinafter referred to collectively as the "Securities." The sale of the Securities to the Initial Purchasers (the "Offering") will be made without registration of the Securities under the Securities Act of 1933, as amended, (the "Act") and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder, in reliance upon the exemption therefrom provided by Section 4(2) of the Act. Holders of the Securities will have the benefits of a Registration Rights Agreement to be dated as of July 15, 1997 2 -2- among the Issuers and the Initial Purchasers (the "Registration Rights Agreement"). In connection with the sale of the Securities, the Company has prepared an offering memorandum dated July 16, 1997 (the "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the Offering, a description of the Company and any material developments relating to the Company occurring after the date of the most recent financial statements included therein. The Securities are being issued and sold in connection with the repayment of certain indebtedness outstanding under the Company's senior secured term loan facility (as amended, the "Amended Credit Agreement") among the Company, Canadian Imperial Bank of Commerce, as administrative agent, Merrill Capital Corporation, as documentation agent, and the other financial institutions party thereto, as lenders which will be further amended on or prior to the closing date. This Agreement, the Securities, the Exchange Notes (as defined in the Registration Rights Agreement), the Private Exchange Notes (as defined in the Registration Rights Agreement), the Registration Rights Agreement and the Indenture are herein collectively referred to as the "Offering Documents." 2. Representations and Warranties of the Issuers. The Issuers, jointly and severally, represent and warrant to and agree with the Initial Purchasers that: (a) The Memorandum, as of its date and at the Closing Date (as defined in Section 3 hereof), did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 2(a) do not apply to statements or omissions that are made in reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Company in writing by the Initial Purchasers expressly for use in the Memorandum or any amendment or supplement thereto, which information is set forth in Section 15. (b) Each of the Issuers and the Subsidiaries (as hereinafter defined) that is a corporation organized under the laws of a jurisdiction of the United States has been and at and as of the Closing Date will be duly incorpo- 3 -3- rated and each of the Issuers and each Subsidiary that is a corporation organized under the laws of a jurisdiction of the United States is and at and as of the Closing Date will be validly existing in good standing as a corporation under the laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as now conducted as described in the Memorandum, is and at and as of the Closing Date will be duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, condition (financial or other) or results of operations of any of the Issuers and the Subsidiaries, taken as a whole (any such event a "Material Adverse Effect"); each of the Issuers and the Subsidiaries that is not a corporation organized under the laws of a jurisdiction of the United States, has been and at and as of the Closing Date will be duly organized and validly existing under the laws of the jurisdiction in which it is so organized, with the requisite power and authority to own its properties and conduct its business as now conducted and as described in the Memorandum; the Company had as of the date specified therein the authorized, issued and outstanding capitalization set forth in the Memorandum; except as set forth in Exhibit B hereto and for the Subsidiary Guarantors (collectively, the "Subsidiaries"), the Company does not have any subsidiaries or own directly or indirectly any of the capital stock or other equity securities of any other person; all of the outstanding shares of capital stock of the Issuers and the Subsidiaries have been, duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights and, in the case of the Subsidiary Guarantors and the Subsidiaries, are owned free and clear of all liens, encumbrances, equities and restrictions on transferability (other than those imposed by the Act and the state securities or "Blue Sky" laws); except as set forth in the Memorandum, no options, warrants or other rights to purchase from any Issuer or any Subsidiary, agreements or other obligations of any Issuer or any Subsidiary or other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in any Issuer or any Subsidiary are outstanding. 4 -4- (c) Each of the Issuers has the required corporate power and authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes. The Securities, the Exchange Notes, the Private Exchange Notes and the guarantees to be endorsed thereon have each been duly and validly authorized by each of the Issuers for issuance and, when executed by the Issuers and authenticated by the Trustee in accordance with the provisions of the Indenture and, in the case of the Securities, delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Issuers, entitled to the benefits of the Indenture and enforceable against the Issuers in accordance with their terms except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity); each of the Issuers has all requisite corporate power and authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes, and the Indenture has been duly and validly authorized by the Issuers and is in a form to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA") and, when executed and delivered by the Issuers (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity). (d) Each of the Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The Registration Rights Agreement has been duly and validly authorized by the Issuers and, when executed and delivered by the Issuers (assuming the due authorization, execution and delivery by the Initial Purchasers), will constitute a valid and legally binding agreement of the Issuers, en- 5 -5- forceable against the Issuers in accordance with its terms except (i) that the enforcement thereof may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public policy considerations. (e) Each of the Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly and validly authorized by the Issuers and, when executed and delivered by the Issuers, will constitute a valid and legally binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (f) Except as set forth in the Memorandum, no consent, approval, authorization or order of any court or governmental agency or body is required for the performance of any of the Offering Documents by the Issuers or, to the extent each is or will be a party thereto, or for the consummation by the Issuers or, of any of the transactions contemplated thereby, except for such consents, approvals, authorizations or orders as have been obtained or made or as may be required under the Act and the TIA (with respect to the transactions contemplated by the Registration Rights Agreement) or as may be required under state securities or "Blue Sky" laws in connection with the purchase and distribution of the Securities by the Initial Purchasers; and none of the Issuers or, is (i) in violation of its certificate of incorporation or bylaws, (ii) in violation of any statute, judgment, decree, order, rule or regulation applicable to it or any of its properties or assets, which violation would, individually or in the aggregate, have a Material Adverse Effect, or (iii) in default in the performance or observance of any obliga- 6 -6- tion, agreement, covenant or condition contained in any of the Offering Documents or any other contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or agreement or instrument to which it is a party or to which it is subject, which default would, individually or in the aggregate, have a Material Adverse Effect. (g) The execution, delivery and performance by the Issuers of each of the Offering Documents to which it is a party, and the consummation by the Issuers of the transactions contemplated thereby and the fulfillment of the terms thereof, will not violate, conflict with or constitute or result in a breach of or a default under (or an event that, with notice or lapse of time, or both, would constitute a breach of or a default under) any of (a) the terms or provisions of any indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, or agreement or instrument to which any of the Issuers or the Subsidiaries is a party or to which any of their respective properties or assets are subject, which violation, conflict, breach or default would, individually or in the aggregate, have a Material Adverse Effect, (b) the certificate of incorporation or bylaws of any of the Issuers or the Subsidiaries or (c) (assuming compliance with all applicable Federal and state securities and "Blue Sky" laws) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or other body applicable to the Issuers or the Subsidiaries or any of their respective properties or assets, which violation, conflict, breach or default would, individually or in the aggregate, have a Material Adverse Effect. (h) The audited consolidated financial statements and schedules of each of the Company and Lemmerz included in the Memorandum present fairly the consolidated financial position, results of operations and cash flows of the Company and Lemmerz, at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis, except as otherwise stated therein; the unaudited consolidated financial statements and the related notes of the Company and Lemmerz included in the Memorandum present fairly the consolidated financial position, results of operations and cash flows of the Company and Lemmerz at the dates and for the periods to which they relate, subject to year-end audit adjustments, and have been prepared in accordance with generally accepted ac- 7 -7- counting principles applied on a consistent basis except as otherwise stated therein and have been prepared on a basis substantially consistent with that of the audited financial statements referred to above except as otherwise stated therein; to the best knowledge of the Company, after due inquiry, the summary and selected financial and statistical data included in the Memorandum present fairly the information shown therein and have been prepared and compiled on a basis consistent with the audited and unaudited financial statements included therein, except as otherwise stated therein; and KPMG Peat Marwick LLP and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft, which have examined certain of such financial statements and schedules as set forth in their reports included in the Memorandum, are independent public accounting firms as required by the Act. (i) (i) The pro forma financial statements and other pro forma financial information (including the notes thereto) included in the Memorandum (A) have been prepared in accordance with applicable requirements of Rule 11-02 of Regulation S-X promulgated under the Act and (B) have been properly computed on the bases described therein; (ii) the assumptions used in the preparation of the pro forma financial statements and other pro forma financial information included in the Memorandum are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (j) Except as described in the Memorandum, there is not pending or, to the best knowledge of the Issuers, threatened any action, suit, proceeding, inquiry or investigation, governmental or otherwise, to which any of the Issuers or the Subsidiaries is a party, or to which their respective properties or assets are subject, before or brought by any court, arbitrator or governmental agency or body, that, if determined adversely to the Issuers or the Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to be sold hereunder or the consummation of the transactions described in the Memorandum under the captions "Use of Proceeds." (k) The Issuers and the Subsidiaries possess adequate licenses or other rights to use all patents, trade- 8 -8- marks, service marks, trade names, copyrights and know-how (i) that are necessary to conduct their business as described in the Memorandum and (ii) the loss of which would, individually or in the aggregate, have a Material Adverse Effect. (l) None of the Issuers or the Subsidiaries has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were sustained, would, individually or in the aggregate, have a Material Adverse Effect. (m) Each of the Issuers and the Subsidiaries has obtained all licenses, permits, franchises and other governmental authorizations, the lack of which would, individually or in the aggregate, have a Material Adverse Effect. (n) Subsequent to the respective dates as of which information is given in the Memorandum and except as described therein, (i) the Issuers and the Subsidiaries have not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, in either case whether or not in the ordinary course of business, and (ii) the Issuers and the Subsidiaries have not purchased any of their respective outstanding capital stock, or declared, paid or otherwise made any dividend or distribution of any kind on any of their respective capital stock or otherwise. (o) None of the Issuers or the Subsidiaries has taken or will take any action that would cause this Agreement or the issuance or sale of the Securities to violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, in each case as in effect, or as the same may hereafter be in effect, on the Closing Date. (p) Each of the Issuers and the Subsidiaries has good and marketable title to all real property described in the Memorandum as being owned by it and good and marketable title to the leasehold estate in the real property described therein as being leased by it, free and clear of all liens, charges, encumbrances or restrictions, except, in each case, as described in the Memorandum or such as would not, individually or in the aggregate, have a Material Adverse Effect. 9 -9- (q) Each of the Issuers and the Subsidiaries has filed all necessary federal, state and foreign income and franchise tax returns, except where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect; and, other than taxes due thereon or tax deficiencies which any Issuer or Subsidiary reasonably believe that it has provided adequate reserves, has paid all taxes due thereon and there is no tax deficiency that has been asserted against any Issuer or Subsidiary that would, individually or in the aggregate, have a Material Adverse Effect. (r) (i) Immediately after the consummation of the transactions contemplated by this Agreement (including the use of proceeds from the sale of Securities on the Closing Date), the fair value and present fair saleable value of the assets of the Company will exceed the sum of its stated liabilities and identified contingent liabilities; and (ii) the Company is not, nor will it be, after giving effect to the execution, delivery and performance of the Offering Documents, to the extent it is a party thereto, and the consummation of the transactions contemplated thereby, (a) left with unreasonably small capital with which to carry on its business as it is proposed to be conducted, (b) unable to pay its debts (contingent or otherwise) as they mature or (c) insolvent. (s) Assuming the accuracy of the Initial Purchasers' representations and warranties set forth in Section 5 hereof, and the due performance by the Initial Purchasers of the covenants and agreements set forth in Section 5 hereof, the offer and sale of the Securities to the Initial Purchasers in the manner contemplated by this Agreement and the Memorandum does not require registration under the Act and the Indenture does not require qualification under the TIA. (t) No securities of the Company or any of its Subsidiaries are (i) of the same class (within the meaning of Rule 144A under the Act) as the Securities and (ii) listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or quoted in a U.S. automated interdealer quotation system. (u) None of the Issuers or the Subsidiaries, any of their respective Affiliates or any person acting on their behalf (other than the Initial Purchasers) has, engaged in 10 -10- any directed selling efforts (as that term is defined in Regulation S under the Act ("Regulation S")) with respect to the Securities; and the Issuers, the Subsidiaries, their respective Affiliates and any person acting on their behalf (other than the Initial Purchasers) have acted in accordance with the offering restrictions requirements of Regulation S. (v) Except as disclosed in the Memorandum and except as would not individually or in the aggregate have a Material Adverse Effect, (A) each of the Issuers and the Subsidiaries is in compliance with all applicable Environmental Laws, (B) each of the Issuers and the Subsidiaries has made all filings and provided all notices required under any applicable Environmental Law, and has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements, (C) there are no pending or, to the best knowledge of the Issuers, after due inquiry, threatened Environmental Claims against any of the Issuers or the Subsidiaries and (D) none of the Issuers or the Subsidiaries has knowledge of any circumstances with respect to any of their respective properties or operations that could reasonably be anticipated to form the basis of an Environmental Claim against any of them or any of their subsidiaries or any of their respective properties or operations and the business operations relating thereto which Environmental Claims would, individually or in the aggregate, have a Material Adverse Effect. For purposes of this Agreement, the following terms shall have the following meanings: "Environmental Law" means any federal, state, local or municipal statute, law, rule, regulation, ordinance, code or rule and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment binding on any of the Issuers or the Subsidiaries relating to pollution or protection of the environment or health or safety or any chemical, material or substance that is subject to regulation thereunder. "Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, written notices of responsibility, information requests, liens, written notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law. 11 -11- (w) None of the Issuers or the Subsidiaries is required to register as an "investment company" or a company "controlled by" an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (x) Except as stated in the Memorandum, none of the Issuers or the Subsidiaries or any of their directors, officers or controlling persons, has taken, directly or indirectly, any action designed, or that might reasonably be expected, to cause or result, under the Act or otherwise, in, or that has constituted, stabilization or manipulation of the price of any security of any Issuer to facilitate the sale or resale of the Securities (it being understood that no representation or warranty is made as to any actions by the Initial Purchasers). 3. Purchase, Sale and Delivery of the Securities. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Issuers agree to issue and sell to the Initial Purchasers, and each of the Initial Purchasers severally agrees to purchase from the Issuers, at 97.5% of their principal amount, the respective aggregate principal amounts of the Securities set forth opposite their respective names on Exhibit C hereto. The obligations of the Initial Purchasers under this Agreement are several and not joint. One or more certificates in definitive form for the Securities that the Initial Purchasers have agreed to purchase hereunder, and in such denomination or denominations and registered in such name or names as each Initial Purchaser requests upon notice to the Company at least 48 hours prior to the Closing Date, shall be delivered by or on behalf of the Company, against payment by or on behalf of the Initial Purchasers of the purchase price therefor by wire transfer of immediately available funds net of the overnight cost of such funds to the account of the Company previously designated by it in writing. Such delivery of and payment for the Securities shall be made at the offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, at 9:00 a.m., New York time, on July 22, 1997, or at such date as the Initial Purchasers and the Company may agree upon, such time and date of delivery against payment being herein referred to as the "Closing Date." The Company will make such certificate or certificates for the Securities available for checking and packaging by the Initial Purchasers at the offices in New York, New York of CIBC Wood Gundy Securities Corp. at least 24 hours prior to the Closing Date. 12 -12- 4. Registration Rights of Holders of Securities. The Initial Purchasers and their direct and indirect transferees of the Securities will have such rights with respect to the registration thereof under the Act and qualification of the Indenture under the TIA as are set forth in the Registration Rights Agreement. 5. Resale of Securities. Each Initial Purchaser represents and warrants to, and agrees with, the Company that (a) it is a "qualified institutional buyer" as defined in Rule 144A under the Act ("QIB"); (b) it has not and will not, directly or indirectly, solicit offers for, or offer or sell, the Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act; (c) it has not and will not, directly or indirectly, engage in any "directed selling efforts" (as defined in Regulation S under the Act); and (d) it has and will solicit offers for the Securities only from, and will offer, sell and deliver the Securities only to, (A) in the case of offers inside the United States, (i) persons whom such Initial Purchasers reasonably believe to be QIBs or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to such Initial Purchasers that each such account is a QIB to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A or (ii) a limited number of other institutional investors each of which is reasonably believed by the Initial Purchaser to be an "accredited investor" (as defined in Rule 501(a)(1)(2), (3) or (7) of the Act) that, prior to their purchase of the Securities, deliver to the Initial Purchaser a letter containing the representations and agreements set forth in Annex I to the Memorandum and (B) in the case of offers outside the United States, to persons other than U.S. Persons in compliance with Regulation S under the Act ("foreign purchasers," which terms shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)); provided, however, that, in the case of this clause (B), in purchasing such Securities such persons are deemed to have represented and agreed as provided under the caption "Notice to Investors" contained in the Memorandum. 6. Certain Covenants. The Issuers, jointly and severally, covenant and agree with the Initial Purchasers that: 13 -13- (a) None of the Issuers will amend or supplement the Memorandum or any amendment or supplement thereto of which the Initial Purchasers shall not previously have been advised and furnished a copy for a reasonable period of time prior to the proposed amendment or supplement and as to which the Initial Purchasers or counsel for the Initial Purchasers shall reasonably object. The Issuers will promptly, upon the reasonable request of the Initial Purchasers or counsel to the Initial Purchasers, make any amendments or supplements to the Memorandum that may be reasonably necessary or advisable in connection with the resale of the Securities by the Initial Purchasers. (b) The Issuers will cooperate with the Initial Purchasers in arranging for the qualification of the Securities for offering and sale under the securities or "Blue Sky" laws of such jurisdictions as the Initial Purchasers may designate and will continue such qualifications in effect for as long as may be necessary to complete the distribution of the Securities by the Initial Purchasers; provided, however, that in connection therewith none of the Issuers shall be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or to take any other action that would subject it to general service of process or to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject. (c) If, at any time prior to the completion of the distribution by the Initial Purchasers of the Securities or, if issued, the Private Exchange Notes, any event occurs or information becomes known as a result of which the Memorandum as then amended or supplemented would include any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it is necessary at any time to amend or supplement the Memorandum to comply with applicable law, the Issuers will promptly notify the Initial Purchasers thereof (who thereafter will not use such Memorandum until appropriately amended or supplemented) and will prepare, at the expense of the Issuers, an amendment or supplement to the Memorandum that corrects such statement or omission or effects such compliance. (d) The Company will, without charge, provide to each Initial Purchaser and to counsel to the Initial Pur- 14 -14- chasers as many copies of the Memorandum or any amendment or supplement thereto as the Initial Purchasers may reasonably request. (e) During the period of five years from the Closing Date, the Company will furnish to the Initial Purchasers (a) as soon as available, a copy of each report and other communication (financial or otherwise) of the Company mailed to the Trustee or the holders of the Securities, stockholders or filed with the Commission or any national securities exchange on which any class of securities of the Company may be listed and (b) from time to time such other information concerning the Company as you may reasonably request. (f) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof (other than solely by reason of a default by the Initial Purchasers of their obligations hereunder after all conditions hereunder have been satisfied in accordance herewith) or if this Agreement shall be terminated by the Initial Purchasers because of any failure or refusal on the part of the Issuers to comply with the terms or fulfill any of the conditions of this Agreement, the Company agrees to reimburse you for all reasonable out-of-pocket expenses (including fees and expenses of counsel for the Initial Purchasers) incurred by you in connection herewith. (g) The Company will apply the net proceeds from the sale of the Securities as set forth under "Use of Proceeds" in the Memorandum. (h) Prior to the Closing Date, the Company will furnish to the Initial Purchasers, as soon as they have been prepared by or are available to the Company, a copy of any unaudited interim consolidated financial statements of the Company for any period subsequent to the period covered by the most recent financial statements appearing in the Memorandum. (i) None of the Issuers or any of their respective Affiliates will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any "security" (as defined in the Act) which could be integrated with the sale of the Securities in a manner which would require the registration under the Act of the Securities. 15 -15- (j) The Issuers will not, and will not permit any of the Subsidiaries to, solicit any offer to buy or offer to sell the Securities by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act. (k) For so long as any of the Securities remain outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Act and not able to be sold in their entirety under Rule 144 under the Act (or any successor provision), the Company will make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act. (l) The Issuers will use their best efforts to (i) permit the Securities to be included for quotation on the Private Offering, Resales, and Trading through Automated Linkages Market ("PORTAL") and (ii) permit the Securities to be eligible for clearance and settlement through The Depository Trust Company ("DTC"). (m) In connection with Securities offered and sold in an offshore transaction (as defined in Regulation S), the Company will not register any transfer of such Securities not made in accordance with the provisions of Regulation S and will not, except in accordance with the provisions of Regulation S, if applicable, issue any such Securities in the form of definitive securities. 7. Expenses. Notwithstanding any termination of this Agreement (pursuant to Section 11 or otherwise), the Company agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by the Issuers of their obligations hereunder: (i) the preparation, printing or reproduction of the Memorandum, (including financial statements) and each amendment or supplement to it; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Memorandum and all amendments or supplements to it as may be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp taxes in connection with the original issuance and sale 16 -16- of the Securities and trustees' fees; (iv) the reproduction and delivery of this Agreement, the preliminary and supplemental "Blue Sky" memoranda, including filing fees and reasonable fees and disbursements of Cahill Gordon & Reindel, counsel to the Initial Purchasers, relating thereto, and all other agreements or documents reproduced and delivered in connection with the offering of the Securities; (v) the registration or qualification of the Securities for offer and sale under the securities or Blue Sky laws of the several states (including the reasonable fees, expenses and disbursements of counsel to the Initial Purchasers relating to such registration and qualification); (vi) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities; (vii) the fees and expenses of the Company's accountants and the fees and expenses of counsel (including local and special counsel) for the Issuers; (viii) fees and expenses of the Trustee including fees and expenses of its counsel; and (ix) any fees charged by investment rating agencies for the rating of the Securities. 8. Conditions of the Initial Purchasers' Obligations. The several obligations of the Initial Purchasers to purchase and pay for the Securities are subject to the accuracy of the representations and warranties contained herein, to the performance by the Issuers of their respective covenants and agreements hereunder and to the following additional conditions unless waived in writing by the Initial Purchasers: (i) None of the issuance and sale of the Securities pursuant to this Agreement or any other transactions contemplated by any of the Offering Documents or the Memorandum shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued; and there shall not have been any legal action, order, decree or other administrative proceeding instituted or threatened against any of the Issuers or against you relating to the issuance of the Securities or the Initial Purchasers' activities in connection therewith, or any other transaction contemplated by any of the Offering Documents or the Memorandum. (ii) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting the condition (financial or other), business, properties, prospects, net worth or results of operations of the Issuers and the Subsidiaries, taken as a whole, not contemplated by the Memorandum that, in your opinion, would 17 -17- materially adversely affect the market for the Securities, or (ii) any event or development relating to or involving any of the Issuers, the Subsidiaries or any of the respective officers or directors of the Issuers or the Subsidiaries that makes any statement made in the Memorandum untrue or that, in the opinion of the Issuers and their counsel or the Initial Purchasers and their counsel, requires the making of any addition to or change in the Memorandum in order to state a material fact necessary in order to make the statements made therein not misleading or to comply with law. (iii) The Initial Purchasers shall have received an opinion of counsel to the Issuers in form and substance satisfactory to the Initial Purchasers and counsel to the Initial Purchasers, dated the Closing Date, of each of (i) Skadden, Arps, Slate, Meagher & Flom LLP, substantially in the form of Exhibit D-1 hereto, and (ii) Daniel M. Sandberg, Esquire, General Counsel to the Company substantially in the form of Exhibit D-2. (iv) The Initial Purchasers shall have received an opinion, dated the Closing Date, of Cahill Gordon & Reindel, counsel to the Initial Purchasers, with respect to the sufficiency of certain legal matters relating to this Agreement and such other related matters as the Initial Purchasers may require. In rendering such opinion, Cahill Gordon & Reindel shall have received and may rely upon such certificates and other documents and information as they may reasonably request to pass upon such matters. In addition, in rendering their opinion, Cahill Gordon & Reindel may state that its opinion is limited to matters of New York, Delaware corporate and federal law. (v) The Initial Purchasers shall have received, from KPMG Peat Marwick LLP, independent public accountants for the Issuers, and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft, independent public accountants for Lemmerz Holding GmbH, a wholly-owned subsidiary of the Company ("Lemmerz"), "comfort" letters dated the date hereof and the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers and Cahill Gordon & Reindel, counsel to the Initial Purchasers. (vi) The representations and warranties of the Issuers contained in this Agreement which are qualified as to materiality shall be true and correct, and those represen- 18 -18- tations and warranties of the Issuers which are not so qualified shall be true and correct in all material respects, on and as of the Closing Date; the Issuers shall have complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date. (vii) There shall not have been any change in the capital stock of the Issuers nor any material increase in the consolidated short-term or long-term debt of the Issuers, in each case, from that set forth or contemplated in the Memorandum (or any amendment or supplement thereto) and (b) the Issuers shall not have any liabilities or obligations, contingent or otherwise (whether or not in the ordinary course of business), that are material to the Issuers, taken as a whole, other than those reflected in the Memorandum (or any amendment or supplement thereto) or contemplated by the Offering Documents. (viii) You shall have received certificates, dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company and each Subsidiary Guarantor (or such other officers as are acceptable to you), to the effect that each of the conditions to closing set forth in this Section 8 have been satisfied. (ix) The Initial Purchasers shall have received on or before the Closing Date from the Company a true and correct copy of an amendment to the Amended Credit Agreement, in a form satisfactory to the Initial Purchasers (the "Amendment"), which Amendment shall have been executed by all necessary parties thereto and shall be in full force and effect. (x) The Issuers shall have furnished or caused to be furnished to you such further certificates and documents as you shall have reasonably requested. Any certificate or document signed by any officer of an Issuer and delivered to you or to counsel for the Initial Purchasers shall be deemed a representation and warranty by such Issuer to each Initial Purchaser as to the statements made therein. All such opinions, certificates, letters, schedules, documents or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are reasonably satisfactory in all material respects to the Initial 19 -19- Purchasers and counsel to the Initial Purchasers. The Issuers shall furnish to the Initial Purchasers such conformed copies of such opinions, certificates, letters, schedules, documents and instruments in such quantities as the Initial Purchasers shall reasonably request. 9. Indemnification and Contribution. (a) Each Issuer jointly and severally agrees to indemnify and hold harmless each Initial Purchaser, and each person, if any, who controls any of the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser or such controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in (A) the Memorandum or (B) any application or other document, or any amendment or supplement thereto, executed by any Issuer or based upon written information furnished by or on behalf of any Issuer filed in any jurisdiction in order to qualify the Securities under the securities or "Blue Sky" laws thereof or filed with the Commission or any securities association or securities exchange (each an "Application"); or (ii) the omission or alleged omission to state, in the Memorandum or any amendment thereto, or any Application, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse, as incurred, each Initial Purchaser and each such controlling person for any reasonable and documented out-of-pocket legal or other expenses reasonably incurred by the Initial Purchasers or such controlling person in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, that none of the Issuers will be liable in any such case to an Initial Purchaser or any controlling person of such Initial Purchaser to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Memorandum or any amendment thereto or any Application in reliance upon and in conformity with 20 -20- written information furnished to the Issuers by or on behalf of such Initial Purchaser specifically for use therein. This indemnity agreement will be in addition to any liability that the Issuers may otherwise have to the indemnified parties. None of the Issuers will, without the prior written consent of the Initial Purchasers, which shall not be unreasonably withheld or delayed, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification by the Initial Purchasers may be sought hereunder (whether or not the Initial Purchasers or any person who controls either of the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional release (or any other release reasonably acceptable to the Initial Purchasers) of the Initial Purchasers and each such controlling person from all liability arising out of such claim, action, suit or proceeding. (b) Each Initial Purchaser will severally and not jointly indemnify and hold harmless the Issuers, their respective directors, officers and each person, if any, who controls any of the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which any of the Issuers or any such director, officer or controlling person may become subject under the Act, the Exchange Act, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Memorandum or any amendment thereto or any Application or (ii) the omission or the alleged omission to state therein a material fact required to be stated in the Memorandum or any amendment thereto, or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to any of the Issuers by or on behalf of such Initial Purchaser specifically for use therein; and, subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any reasonable and documented out-of-pocket legal or other expenses reasonably incurred by any of the Issuers or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability that the Initial Purchasers may oth- 21 -21- erwise have to the indemnified parties. The Initial Purchasers will not, without the prior written consent of the Issuers, which shall not be unreasonably withheld or delayed, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification by any of the Issuers may be sought hereunder (whether or not any of the Issuers or any person who controls the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional release or any other release reasonably acceptable to the Issuers) of any such Issuer and each such controlling person from all liability arising out of such claim, action, suit or proceeding. (c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability that it may have to any indemnified party except to the extent that such omission results in the forfeiture by the indemnifying party of substantial rights and defenses. In case any such action is brought against any indemnified party, and such indemnified party notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded, based on the advice of counsel, that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to any such indemnifying party then the indemnifying parties shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses, other than reasonable and documented 22 -22- out-of-pocket costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Initial Purchasers in the case of paragraph (a) of this Section 9 or the Issuers in the case of paragraph (b) of this Section 9, representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or actions); (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying parties; or (iii) the indemnifying party shall have failed to assume the defense or retain counsel reasonably satisfactory to the indemnified party. (d) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 9 is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), other than as a result of the proviso to Section 9(a), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Securities or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Issuers on the one hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total proceeds from the offering of the Securities (before deducting expenses other than Initial Purchasers' discounts and commissions) received by the Issuers bear to the total initial purchasers' discounts and commissions received by the Initial Purchasers. The relative fault of the parties 23 -23- shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or the Initial Purchasers on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. The Issuers and the Initial Purchasers agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Issuers on the one hand and the Initial Purchasers on the other hand were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (d). Notwithstanding any other provision of this paragraph (d), the Initial Purchasers shall not be obligated to make contributions hereunder that in the aggregate exceed the total initial purchasers' discounts and commissions received by the Initial Purchasers under this Agreement, less the aggregate amount of any damages that the Initial Purchasers have otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls any of the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Initial Purchasers, and each director of any of the Issuers, each officer and each person, if any, who controls any of the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Issuers. (e) Notwithstanding anything to the contrary in this Article 9, the indemnification and contribution provisions of the Registration Rights Agreement shall govern any claim with respect thereto. 10. Survival Clause. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Issuers, their respective officers and the Initial Purchasers set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Issuers, any of their re- 24 -24- spective officers or directors, the Initial Purchasers or any controlling person referred to in Section 9 hereof and (ii) delivery of and payment for the Securities, and shall be binding upon and shall inure to the benefit of, any successors, assigns, heirs, personal representatives of the Issuers, the Initial Purchasers and indemnified parties referred to in Section 9 hereof. The respective agreements, covenants, indemnities and other statements set forth in Sections 7 and 9 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement. 11. Termination. (a) This Agreement may be terminated in the sole discretion of the Initial Purchasers by notice to the Issuers given in the event that the Issuers shall have failed, refused or been unable to satisfy all conditions on its respective part to be performed or satisfied hereunder on or prior to the Closing Date or, if at or prior to the Closing Date: (i) any of the Issuers or the Subsidiaries shall have sustained any loss or interference with respect to their respective businesses or properties from fire, flood, hurricane, earthquake, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding, which loss or interference has had or has a material adverse effect on the business, condition (financial or other), properties, prospects or results of operations of the Issuers and the Subsidiaries taken as a whole, or there shall have been any material adverse change, or any development involving a prospective material adverse change (including without limitation a change in management or control of the Issuers), in the business, condition (financial or other), properties, prospects or results of operations of the Issuers and the Subsidiaries except as described in or contemplated by the Memorandum (exclusive of any amendment or supplement thereto); (ii) trading in securities generally on the New York or American Stock Exchange shall have been suspended or minimum or maximum prices shall have been established on any such exchange; (iii) a banking moratorium shall have been declared by New York or United States authorities; or (iv) there shall have been (A) an outbreak or escalation of hostilities between the United States and any for- 25 -25- eign power, (B) an outbreak or escalation of any other insurrection or armed conflict involving the United States or (C) any material change in the financial markets of the United States that, in the sole judgment of the Initial Purchasers, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities as contemplated by the Memorandum, as amended as of the date hereof. (b) Termination of this Agreement pursuant to this Section 11 shall be without liability of any party to any other party except as provided in Section 10 hereof. 12. Notices. All communications hereunder shall be in writing and, if sent to the Initial Purchasers, shall be mailed or delivered or telecopied and confirmed in writing to the Initial Purchasers c/o CIBC Wood Gundy Securities Corp., 425 Lexington Avenue, 3rd Floor, New York, New York 10017, Attention: Walter F. McLallen, and with a copy to Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, Attention: Roger Meltzer, Esq. If sent to the Company or any of the Subsidiary Guarantors, shall be mailed, delivered or telegraphed and confirmed in writing, to Hayes Wheels International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174, Attention: General Counsel and with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, One Rodney Square, Wilmington, Delaware 19801, Attention: Robert B. Pincus, Esq. 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers and each of the Issuers and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Issuers contained in Section 9 of this Agreement shall also be for the benefit of any person or persons who control the Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained in Section 9 of this Agreement shall also be for the benefit of the directors of the Issuers, their respective officers and any person or persons who controls any Issuer within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No 26 -26- purchaser of Securities from the Initial Purchasers will be deemed a successor because of such purchase. 14. Joint and Several Obligations. All of the obligations of the Issuers hereunder shall be joint and several obligations of each of them. 15. Information Supplied by the Initial Purchasers. The statements set forth in the first legend on the inside front cover of the Memorandum and in the penultimate and last sentence of the third paragraph and the seventh paragraph under the heading "Plan of Distribution" constitute the only information furnished by the Initial Purchasers to the Issuers for purposes of Section 2(a) hereof. 16. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof. 17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW. 18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 27 -27- If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Issuers and the Initial Purchasers. Very truly yours, HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation By: ---------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-CALIFORNIA, INC., a Delaware corporation By: ---------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-GEORGIA, INC., a Delaware corporation By: ---------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-INDIANA, INC., a Delaware corporation By: ---------------------------------------- Name: Title: 28 -28- HAYES WHEELS INTERNATIONAL-MEXICO, INC., a Delaware corporation By: ---------------------------------------- Name: Title: HAYES WHEELS INTERNATIONAL-MICHIGAN, INC., a Michigan corporation By: ---------------------------------------- Name: Title: MOTOR WHEEL CORPORATION, an Ohio corporation By: ---------------------------------------- Name: Title: MWC ACQUISITION SUB, INC., a Delaware corporation By: ---------------------------------------- Name: Title: 29 -29- The foregoing Agreement is hereby confirmed and accepted as of the date first above written. CIBC WOOD GUNDY SECURITIES CORP. By: --------------------------------------- Name: Title: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: --------------------------------------- Name: Title: 30 Exhibit A Subsidiary Guarantors Hayes Wheels International-California, Inc. Hayes Wheels International-Georgia, Inc. Hayes Wheels International-Indiana, Inc. Hayes Wheels International-Mexico, Inc. Hayes Wheels International-Michigan, Inc. Motor Wheel Corporation MWC Acquisition Sub, Inc. 31 Exhibit B Company Subsidiaries Hayes (Europe), Ltd. Hayes Wheels, S.p.A. Hayes Wheels Autokola NH, as Reliable Transportation Components Inc. Hayes Wheels International - Missouri, Inc. Hayes Wheels International - Kentuckulus, Inc. Hayes Wheels Aftermarket, Inc. Hayes Wheels Japan Limited Hayes Wheels de Espana, S.A. HWI Service Corporation Hayes Wheels Foreign Sales Corp. Motor Wheel de Mexico, S.A. de C.V. Motor Wheel Corporation of Canada, Ltd. AMW Holdings, Inc. HL Holdings BV HL Holdings de Espana HL Holding GmbH Hayes Wheels Hungary Consulting Limited Liability Company Newco No. 17 Vermogensverwaltungs GmbH (post-Acquisition) Newco No. 18 Vermogensverwaltungs GmbH (post-Acquisition) Lemmerz Holding GmbH Metaalgieterij Geisen B.V. Lemmerz Espanola S.A. Lemmerz-Werke GmbH Lemmerz-Werke Wohnungsbaugesellschaft mbH Lemmerz Service System N.V. Lemmerz Belgie N.V. Lemmerz Comerico e Participacoes SRL Lemmerz Canada Inc. PSW Prazisions-und Spezialwerkzeuge AG Lemmerz-Inci-Jany Sanayi A.S. Company Joint Venture and Other Interests Numbers in parentheses represent percent of total owned by the Company or one of its subsidiaries. Hayes Wheels de Venezuela, C.A. (49) Hayes Wheels de Mexico, S.A. de C.V. (40) Aluminum Wheel Technology, Inc. (50) Riviera Tool Company (30) Metalurgica FPS do Brasil, Ltda. (49) Continental Lemmerz (Portugal), Componentes para Automoveis, Lda. (49) 32 -2- Borlem S.A. Empreendimentos Industriais (45) Reynolds-Lemmerz Industries (25) Kalyani-Lemmerz Ltd. (25) Jantas Jant Sanayi ve Ticaret S.A. (25) Siam Lemmerz Co., Ltd. (25) Additional Information See Section 4.3(c), paragraph (ii), of the disclosure schedule provided by Lemmerz pursuant to the acquisition agreement dated as of June 6, 1997 among the Company, Cromodoro Wheels S.p.A., and the shareholders of Lemmerz (the "Acquisition Agreement") regarding certain qualifying shares held by third parties in certain Subsidiaries of Lemmerz. 33 Exhibit C
Principal Amount Initial Purchaser of Securities - ----------------- ---------------- CIBC Wood Gundy Securities Corp. $ 90,000,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated 60,000,000 Total $150,000,000 ============
34 Exhibit D-1 Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP Opinion, dated the Closing Date and addressed to the Initial Purchasers, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Issuers, to the effect that: (i) The Securities have been duly authorized by each of the Issuers other than Hayes Wheels International-Michigan, Inc. (the "Delaware Issuers") and when executed by the Delaware Issuers and authenticated by the Trustee in accordance with the provisions of the Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will have been duly executed, issued and delivered and will constitute valid and binding obligations of the Delaware Issuers, entitled to the benefits of the Indenture and enforceable against the Delaware Issuers in accordance with their terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (ii) The Exchange Notes, the Private Exchange Notes and the guarantees thereof have been duly and validly authorized by the Delaware Issuers and when executed by the Delaware Issuers and authenticated by the Trustee in accordance with the provisions of the Registration Rights Agreement and the Indenture, and delivered to the Initial Purchasers in accordance with the terms of the Registration Rights Agreement, will have been duly executed, issued and delivered and will constitute valid and binding obligations of the Delaware Issuers, entitled to the benefits of the Indenture and enforceable against the Delaware Issuers in accordance with their terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). 35 -2- (iii) Each of the Delaware Issuers has the requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes; the Indenture has been duly authorized by the Delaware Issuers and, when executed and delivered by the Delaware Issuers (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and binding agreement of the Delaware Issuers, enforceable against the Delaware Issuers in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iv) Each of the Delaware Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Delaware Issuers and, when executed and delivered by the Delaware Issuers, will constitute a valid and binding agreement of the Delaware Issuers, enforceable against the Delaware Issuers in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (v) Each of the Delaware Issuers has the requisite corporate power and authority to execute, deliver and perform its obligations under the Purchase Agreement. The Purchase Agreement has been duly authorized by the Delaware Issuers and, when executed and delivered by the Delaware Issuers, will constitute a valid and binding agreement of the Delaware Issuers, enforceable against the Delaware Issuers in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally or general principles of equity 36 -3- (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (vi) No Governmental Approval is required for the performance by the Delaware Issuers of their respective obligations under the Offering Documents or the consummation of the transactions contemplated thereby relating to the Securities. As used in such counsel's opinion, (a) the term "Applicable Laws" means only the General Corporation Law of the State of Delaware and those laws, rules and regulations of the State of New York and the United States of America which, in our experience, are normally applicable to transactions of the type contemplated by the Purchase Agreement (other than federal and state securities laws, the TIA and the rules and regulations of the National Association of Securities Dealers, Inc.) without having made any special investigation as to the applicability of any specific law, rule or regulation except as specified herein; (b) the term "Governmental Authorities" means any Delaware, New York or federal executive, legislative, judicial, administrative or regulatory body; and (c) the term "Governmental Approval" means any consent, approval, license, authorization or validation of, or filing, qualification or registration with, any Governmental Authority pursuant to Applicable Laws. (vii) The execution, delivery and performance by the Delaware Issuers of each of the Offering Documents and the consummation by the Delaware Issuers of the transactions contemplated thereby and the fulfillment of the terms thereof, will not violate or conflict with the certificate of incorporation or bylaws of any of the Delaware Issuers. (viii) The Amendment has been duly authorized by each of the Delaware Issuers, which is a party thereto. (ix) The statements set forth in the Memorandum under the captions "Description of the Notes" and "Description of Other Indebtedness," insofar as such statements constitute a summary of the terms of the documents referred to therein, fairly summarize such terms in all material respects. 37 -4- (x) None of the Issuers or the Subsidiaries is required to register as an "investment company" or a company "controlled by" an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended. (xi) Neither the consummation of the transactions contemplated by the Purchase Agreement nor the sale, issuance, execution or delivery of the Securities will violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. (xii) The Indenture appears on its face to be appropriately responsive in all material respects to the requirements of the TIA. (xiii) Assuming (i) the accuracy of the representations and warranties of the Company set forth in Section 2 of the Purchase Agreement and of you in Section 5 of the Purchase Agreement, (ii) the due performance by the Company of the covenants and agreements set forth in Section 6 of the Purchase Agreement and the due performance by you of the covenants and agreements set forth in Sections 5 and 6 of the Purchase Agreement, (iii) your compliance with the offering and transfer procedures and restrictions described in the Memorandum, (iv) the accuracy of the representations and warranties made in accordance with the Purchase Agreement and the Memorandum by purchasers to whom you initially resell Securities and (v) that purchasers to whom you initially resell Securities receive a copy of the Memorandum prior to such sale, the offer, sale and delivery of the Securities to you in the manner contemplated by the Purchase Agreement and the Memorandum and the initial resale of the Securities by you in the manner contemplated in the Memorandum and the Purchase Agreement, do not require registration under the Act and the Indenture does not require qualification under the TIA, it being understood that we express no opinion as to any subsequent resale of any Security. In addition, we have participated in conferences with officers and other representatives of the Issuers, representatives of the independent public accountants and representatives of the Initial Purchasers at which the contents of the Memorandum were discussed and, although we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Memorandum (except as indicated in clause (ix) above) and have not made any independent check or verification thereof, on the basis of the 38 -5- foregoing (relying as to materiality to a large extent upon the statements of officers and other representatives of each of the Issuers) no facts have come to our attention that have caused us to believe that the Memorandum as of its date and as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that we express no opinion on or belief with respect to the financial statements or other financial and statistical data or information included in the Memorandum or on the information contained in the Memorandum concerning Lemmerz and the subsidiaries of Lemmerz). 39 Exhibit D-2 Form of Opinion of Daniel M. Sandberg, Esq. Opinion, dated the Closing Date and addressed to the Initial Purchasers, of Daniel M. Sandberg, Esq., General Counsel to the Company, to the effect that: (i) Each of the Issuers has been duly incorporated and is validly existing in good standing, as a corporation under the laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as described in the Memorandum and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except when the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect; the outstanding shares of capital stock of the Issuers and the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights and, in the case of the Subsidiary Guarantors and the Subsidiaries, except in connection with the Amended Credit Agreement, are owned free and clear of all liens, encumbrances, equities and restrictions on transferability (other than those imposed by the Act and the state securities or "Blue Sky" laws); to the best of my knowledge, except as set forth in the Memorandum, no options, warrants or other rights to purchase from any Issuer or any Subsidiary or, agreements or other obligations of any Issuer or any Subsidiary to issue or other rights to cause the Company, to convert any obligation into, or exchange any securities for, shares of capital stock or ownership interests in any Issuer or any Subsidiary are outstanding. (ii) The Guarantee has been duly and validly authorized by Hayes Wheels International-Michigan, Inc. ("HWIM") and Motor Wheel Corporation ("MWC") and when the Securities are executed by the Company and authenticated by the Trustee in accordance with the provisions of the Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obliga- 40 -2- tion of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iii) The guarantee of the Exchange Notes and the Private Exchange Notes have been duly and validly authorized by HWIM and MWC and when the Exchange Notes and the Private Exchange Notes have been executed by the Company and authenticated by the Trustee in accordance with the provisions of the Registration Rights Agreement and the Indenture, and delivered to the Initial Purchasers in accordance with the terms of the Registration Rights Agreement, will have been duly executed, issued and delivered and will constitute a valid and legally binding obligation of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (iv) Each of HWIM and MWC has the requisite corporate power and corporate authority to execute, deliver and perform its obligations under the Indenture, the Securities, the Exchange Notes and the Private Exchange Notes; the Indenture has been duly and validly authorized by HWIM and MWC and, when executed and delivered by HWIM and MWC (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms, except that the enforcement thereof may be subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity. (v) Each of HWIM and MWC has the requisite corporate power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The 41 -3- Registration Rights Agreement has been duly and validly authorized by HWIM and MWC and, when executed and delivered by HWIM and MWC, will constitute a valid and legally binding agreement of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (vi) Each of HWIM and MWC has the requisite corporate power and authority to execute, deliver and perform its obligations under the Purchase Agreement. The Purchase Agreement has been duly and validly authorized by HWIM and MWC and, when executed and delivered by HWIM and MWC, will constitute a valid and legally binding agreement of HWIM and MWC, enforceable against HWIM and MWC in accordance with its terms except (i) that the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally or general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy considerations. (vii) No consent, approval, authorization or order of any governmental agency or body, or to the best of my knowledge, any court, is required for the performance of any of the Offering Documents or any of the agreements contemplated thereby or delivered in connection therewith, or the consummation of the transactions contemplated thereby, except such as may be required and have been obtained as described in the Memorandum or as may be required under the Act, the TIA or state securities or "Blue Sky" laws in connection with the purchase and distribution of the Securities or the exchange of the Exchange Notes and the Private Exchange Notes. (viii) None of the Issuers or the Subsidiaries is (a) in violation of its certificate of incorporation or bylaws, (b) in violation of any statute, judgment, decree, 42 -4- order, rule or regulation applicable to any of its properties or assets, which violation would, individually or in the aggregate, have a Material Adverse Effect or (c) in breach of or in default under any of the Offering Documents or any material contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or other material agreement or instrument to which it is a party or to which it is subject, which breach or default would individually or in the aggregate, have a Material Adverse Effect. (ix) The execution, delivery and performance by the Issuers, to the extent each is a party thereto, of each of the Offering Documents and the Amended Credit Agreement and the consummation by the Issuers of the transactions contemplated thereby and the fulfillment of the terms thereof, will not violate, conflict with or constitute or result in a breach of or a default under (or an event that with notice or lapse of time, or both, would constitute a breach of or a default under) any of the terms or provisions of (a) the certificate of incorporation or bylaws of HWIM, (b) any material indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement or other material agreement or instrument to which any of the Issuers or the Subsidiaries is a party or to which any of their respective properties or assets are subject or (c) to the best of my knowledge (assuming compliance with all applicable Federal and state securities and "Blue Sky" laws) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or body applicable to any of the Issuers or the Subsidiaries or any of their respective properties or assets, which violation, conflict, breach or default would, individually or in the aggregate, have any Material Adverse Effect. (x) Except as described in the Memorandum, there are no legal or governmental proceedings pending or threatened to which any of the Issuers or the Subsidiaries is a party or to which the respective properties or assets of the Issuers or the Subsidiaries are subject that would be required to be described in a prospectus pursuant to the Act that are not described in the Memorandum, or that seek to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to the Initial Purchasers or the consummation of the transactions described in the Memorandum under the captions "Use of Proceeds". 43 -5- (xi) The Amendment has been duly authorized by HWIM to the extent it is or will be a party thereto. I have participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company, outside counsel for the Company, your counsel and your representatives at which the contents of the Memorandum and related matters were discussed and, although I am not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Memorandum, I advise you that, on the basis of the foregoing [(relying, with respect to Lemmerz, primarily upon (i) the representations and warranties of Lemmerz and the shareholders of Lemmerz contained in the Acquisition Agreement and (ii) the due diligence reports prepared by counsel and other representatives of the Company retained in connection with the Company's acquisition of Lemmerz (copies of which have been provided to your counsel in connection with their due diligence review of the Company); provided, however, that I have not independently investigated or verified, nor do I assume any responsibility for, the information contained in such reports)], no facts have come to my attention that lead me to believe that the Memorandum as of its date and as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that I have not been requested to and do not make any comment with respect to the financial statements and the notes thereto and other financial and accounting information included or incorporated by reference in the Memorandum). EX-4.2 4 INDENTURE DATED 7/15/97 1 EXHIBIT 4.2 ================================================================================ HAYES WHEELS INTERNATIONAL, INC. THE GUARANTORS NAMED HEREIN, and THE BANK OF NEW YORK, as Trustee ____________________ INDENTURE Dated as of July 15, 1997 ____________________ $150,000,000 9 1/8% Senior Subordinated Notes due 2007 ================================================================================ 2 CROSS-REFERENCE TABLE
TIA Indenture Section _Section_ - ------- --------- 310(a)(1)................................................................ 7.10 (a)(2)................................................................ 7.10 (a)(3)................................................................ N.A. (a)(4)................................................................ N.A. (b)................................................................... 7.08; 7.10; 12.02 (b)(1)................................................................ 7.10 (b)(9)................................................................ 7.10 (c)................................................................... N.A. 311(a)................................................................... 7.11 (b)................................................................... 7.11 (c)................................................................... N.A. 312(a)................................................................... 2.05 (b)................................................................... 12.03 (c)................................................................... 12.03 313(a)................................................................... 7.06 (b)(1)................................................................ 7.06 (b)(2)................................................................ 7.06 (c)................................................................... 12.02 (d)................................................................... 7.06 314(a)................................................................... 4.02; 4.04 12.02 (b)................................................................... N.A. (c)(1)................................................................ 12.04; 12.05 (c)(2)................................................................ 12.04; 12.05 (c)(3)................................................................ N.A. (d)................................................................... N.A. (e)................................................................... 12.05 (f)................................................................... N.A. 315(a)................................................................... 7.01; 7.02 (b)................................................................... 7.05; 12.02 (c)................................................................... 7.01 (d)................................................................... 6.05; 7.01; 7.02 (e)................................................................... 6.11 316(a) (last sentence)................................................... 12.06 (a)(1)(A)............................................................. 6.05 (a)(1)(B)............................................................. 6.04 (a)(2)................................................................ 8.02 (b)................................................................... 6.07 (c)................................................................... 8.04 317(a)(1)................................................................ 6.08 (a)(2)................................................................ 6.09 (b)................................................................... 7.12 318(a)................................................................... 12.01
- -------------- N.A. means Not Applicable NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture. 3 TABLE OF CONTENTS
Page ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions ............................................... 1 Section 1.02. Other Definitions ......................................... 25 Section 1.03. Incorporation by Reference of Trust Indenture Act ................................. 26 Section 1.04. Rules of Construction ..................................... 27 ARTICLE 2 THE NOTES Section 2.01. Amount of Notes and Form and Dating ....................... 27 Section 2.02. Execution and Authentication .............................. 28 Section 2.03. Registrar and Paying Agent ................................ 29 Section 2.04. Paying Agent To Hold Assets in Trust ...................... 30 Section 2.05. Noteholder Lists .......................................... 30 Section 2.06. Transfer and Exchange ..................................... 30 Section 2.07. Replacement Notes ......................................... 32 Section 2.08. Outstanding Notes ......................................... 32 Section 2.09. Temporary Notes ........................................... 32 Section 2.10. Cancellation .............................................. 33 Section 2.11. Defaulted Interest ........................................ 33 Section 2.12. Deposit of Moneys ......................................... 33 Section 2.13. CUSIP Number .............................................. 34 Section 2.14. Book-Entry Provisions for Global Notes .................... 34 Section 2.15. Special Transfer Provisions ............................... 37 Section 2.16. Computation of Interest ................................... 39 ARTICLE 3 REDEMPTION Section 3.01. Notices to Trustee ........................................ 39 Section 3.02. Selection by Trustee of Notes To Be Redeemed ............. 39 Section 3.03. Notice of Redemption ...................................... 40 Section 3.04. Effect of Notice of Redemption ............................ 41 Section 3.05. Deposit of Redemption Price ............................... 41 Section 3.06. Notes Redeemed in Part .................................... 42
-i- 4 ARTICLE 4 COVENANTS
Page ---- Section 4.01. Payment of Notes .......................................... 42 Section 4.02. SEC Reports ............................................... 42 Section 4.03. Waiver of Stay, Extension or Usury Laws ................... 43 Section 4.04. Compliance Certificate .................................... 44 Section 4.05. Payment of Taxes and Other Claims ......................... 45 Section 4.06. Maintenance of Properties and Insurance ................... 45 Section 4.07. Compliance with Laws ...................................... 46 Section 4.08. Corporate Existence ....................................... 46 Section 4.09. Maintenance of Office or Agency ........................... 47 Section 4.10. Limitation on Additional Indebtedness ..................... 47 Section 4.11. Limitation on Foreign Indebtedness ........................ 49 Section 4.12. Limitation on Common Stock of Subsidiaries ................ 50 Section 4.13. Limitation on Restricted Payments ......................... 50 Section 4.14. Limitation on Other Senior Subordinated Debt............... 52 Section 4.15. Limitation on Certain Asset Sales ......................... 52 Section 4.16. Limitation on Transactions with Affiliates ................ 55 Section 4.17. Limitations on Liens ...................................... 56 Section 4.18. Limitation on Creation of Subsidiaries .................... 56 Section 4.19. Payments for Consent ...................................... 57 Section 4.20. Change of Control ......................................... 57 ARTICLE 5 SUCCESSOR CORPORATION Section 5.01. Limitation on Consolidation, Merger and Sale of Assets ......................................... 60 Section 5.02. Successor Person Substituted ............................... 61 ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default .......................................... 61 Section 6.02. Acceleration ............................................... 63 Section 6.03. Other Remedies ............................................. 64 Section 6.04. Waiver of Past Defaults and Events of Default .............. 64 Section 6.05. Control by Majority ........................................ 65
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Page ---- Section 6.06. Limitation on Suits ....................................... 65 Section 6.07. Rights of Holders To Receive Payment ...................... 66 Section 6.08. Collection Suit by Trustee ................................ 66 Section 6.09. Trustee May File Proofs of Claim .......................... 66 Section 6.10. Priorities ................................................ 67 Section 6.11. Undertaking for Costs ..................................... 67 ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee ......................................... 68 Section 7.02. Rights of Trustee ......................................... 69 Section 7.03. Individual Rights of Trustee .............................. 70 Section 7.04. Trustee's Disclaimer ...................................... 71 Section 7.05. Notice of Default ......................................... 71 Section 7.06. Reports by Trustee to Holders ............................. 71 Section 7.07. Compensation and Indemnity ................................ 71 Section 7.08. Replacement of Trustee .................................... 72 Section 7.09. Successor Trustee by Consolidation, Merger or Conversion .. 74 Section 7.10. Eligibility; Disqualification ............................. 74 Section 7.11. Preferential Collection of Claims ......................... 74 Against Company Section 7.12. Paying Agents ............................................. 74 ARTICLE 8 AMENDMENTS, SUPPLEMENTS AND WAIVERS Section 8.01. Without Consent of Holders ................................ 75 Section 8.02. With Consent of Holders ................................... 76 Section 8.03. Compliance with Trust Indenture Act ....................... 77 Section 8.04. Revocation and Effect of Consents ......................... 77 Section 8.05. Notation on or Exchange of Notes .......................... 78 Section 8.06. Trustee To Sign Amendments, etc. .......................... 78 ARTICLE 9 DISCHARGE OF INDENTURE; DEFEASANCE Section 9.01. Discharge of Indenture .................................... 79 Section 9.02. Legal Defeasance .......................................... 79 Section 9.03. Covenant Defeasance ....................................... 80 Section 9.04. Conditions to Defeasance or Covenant Defeasance ........... 80
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Page ---- Section 9.05. Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions ............ 82 Section 9.06. Reinstatement .............................................. 83 Section 9.07. Moneys Held by Paying Agent ................................ 83 Section 9.08. Moneys Held by Trustee ..................................... 84 ARTICLE 10 GUARANTEE OF NOTES Section 10.01. Guarantee ................................................ 85 Section 10.02. Execution and Delivery of Guarantees ..................... 86 Section 10.03. Limitation of Guarantee .................................. 86 Section 10.04. Additional Guarantors .................................... 87 Section 10.05. Release of Guarantor ..................................... 87 Section 10.06. Guarantee Obligations Subordinated to Guarantor Senior Indebtedness .................................... 87 Section 10.07. Payment Over of Proceeds upon Dissolution, etc., of a Guarantor .............................................. 88 Section 10.08. Suspension of Guarantee Obligations When Guarantor Senior Indebtedness in Default ................................ 90 Section 10.09. Subrogation to Rights of Holders of Guarantor Senior Indebtedness ........................................... 92 Section 10.10. Guarantee Subordination Provisions Solely To Define Relative Rights ........................................ 93 Section 10.11. Application of Certain Article 11 Provisions ............. 94 ARTICLE 11 SUBORDINATION OF NOTES Section 11.01. Notes Subordinate to Senior Indebtedness ................. 94 Section 11.02. Payment Over of Proceeds upon Dissolution, etc. .......... 94 Section 11.03. Suspension of Payment When Senior Indebtedness in Default ............................................. 96 Section 11.04. Trustee's Relation to Senior Indebtedness ................ 98 Section 11.05. Subrogation to Rights of Holders of Senior Indebtedness ........................................... 99 Section 11.06. Provisions Solely To Define Relative Rights .............. 99
-iv- 7
Page ---- Section 11.07. Trustee To Effectuate Subordination ....................... 100 Section 11.08. No Waiver of Subordination Provisions ..................... 100 Section 11.09. Notice to Trustee ......................................... 101 Section 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent ....................................... 102 Section 11.11. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of Trustee's Rights .......... 103 Section 11.12. Article Applicable to Paying Agents ....................... 103 Section 11.13. No Suspension of Remedies ................................. 103 ARTICLE 12 MISCELLANEOUS Section 12.01. Trust Indenture Act Controls .............................. 103 Section 12.02. Notices ................................................... 103 Section 12.03. Communications by Holders with Other Holders .............. 105 Section 12.04. Certificate and Opinion as to Conditions Precedent ........ 105 Section 12.05. Statements Required in Certificate and Opinion ............ 105 Section 12.06. When Treasury Notes Disregarded ........................... 106 Section 12.07. Rules by Trustee and Agents ............................... 106 Section 12.08. Business Days; Legal Holidays ............................. 106 Section 12.09. Governing Law ............................................. 107 Section 12.10. No Adverse Interpretation of Other Agreements.............. 107 Section 12.11. No Recourse Against Others ................................ 107 Section 12.12. Successors ................................................ 107 Section 12.13. Multiple Counterparts ..................................... 107 Section 12.14. Table of Contents, Headings, etc. ......................... 108 Section 12.15. Separability .............................................. 108 EXHIBITS Exhibit A. Form of Note .............................................. A-1 Exhibit B. Form of Legend for 144A Note .............................. B-1 Exhibit C. Form of Legend for Regulation S Note ...................... C-1 Exhibit D. Form of Legend for Global Note ............................ D-1 Exhibit E. Form of Certificate for Non-QIB Transfers ................. E-1 Exhibit F. Form of Certificate for Regulation S Transfers............. F-1
-V- 8 Exhibit G. Form of Guarantee ....................................... G-1
-vi- 9 INDENTURE, dated as of July 15, 1997, among HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation, as Issuer (the "Company"), the GUARANTORS (as hereinafter defined), and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Company's 9 1/8% Senior Subordinated Notes due 2007 (the "Notes"): ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. "9 1/8% Notes" means the 9 1/8% Senior Subordinated Notes due 2007 of the Company, originally issued on June 30, 1997. "9 1/8% Notes Indenture" means the Indenture, dated as of June 30, 1997, among the Company, the Guarantors and The Bank of New York, as Trustee, as such indenture may be amended, modified or supplemented from time to time. "11% Notes" means the 11% Senior Subordinated Notes due 2006 of the Company. "11% Notes Indenture" means the Indenture, dated as of July 2, 1996, among the Company, the Guarantors and Comerica Bank, as Trustee, as such indenture may be amended, modified or supplemented from time to time. "Acquired Indebtedness" means Indebtedness of a Person (including an Unrestricted Subsidiary) existing at the time such Person becomes a Restricted Subsidiary or is merged or consolidated with or into the Company or a Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person. "Adjusted EBITDA" means, for any Person, for any period, the EBITDA of such Person, plus any amounts excluded from the calculation of the Consolidated Net Income of such Person pursuant to clause (b) of the definition thereof. "Additional Interest" means additional interest on the Notes which the Company and the Guarantors, jointly and 10 -2- severally, agree to pay to the Holders pursuant to Section 4a of the Registration Rights Agreement. "Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities (including, without limitation, any guarantees of Senior Indebtedness)), but excluding liabilities under the Guarantee, of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts (after giving effect to all other fixed and contingent liabilities (including, without limitation, any guarantees of Senior Indebtedness)) and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Subsidiary under the Guarantee), excluding Indebtedness in respect of the Guarantee, as they become absolute and matured. "Affiliate" of any specified Person means any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. "Agent" means any Registrar, Paying Agent, co-registrar or agent for service of notices and demands. "Amended Credit Agreement" means the Amended Credit Agreement, to be dated on or about the Issue Date, among the Company, CIBC, as administrative agent, Merrill Lynch, as documentation agent, and the lenders from time to time parties thereto, as such agreement may be amended, modified or supplemented from time to time or deferred, renewed, extended, refunded, refinanced, restructured or replaced from time to time in whole or in part (whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the Amended Credit Agreement or other credit agreements or otherwise). 11 -3- "Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C. "Asset Sale" means the sale, transfer or other disposition in any single transaction or series of related transactions of (a) any Capital Stock of or other equity interest in any Restricted Subsidiary of the Company, (b) all or substantially all of the assets of the Company or of any Restricted Subsidiary thereof, (c) real property or (d) all or substantially all of the assets of any business, owned by the Company or any Restricted Subsidiary thereof, or a division, line of business or comparable business segment of the Company or any Restricted Subsidiary thereof; provided that Asset Sales shall not include (i) sales, leases, conveyances, transfers or other dispositions to the Company or to a Restricted Subsidiary or to any other Person if after giving effect to such sale, lease, conveyance, transfer or other disposition such other Person becomes a Restricted Subsidiary, (ii) leases, conveyances or other transfers by the Company or a Restricted Subsidiary of Property to any Person as an Investment in such Person provided that the Company or such Restricted Subsidiary receives consideration at the time of such lease, conveyance or other transfer at least equal to the fair market value of such Property and such Investment is included in clause (v) of the second paragraph of Section 4.13. "Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash received by the Company or any Restricted Subsidiary from such Asset Sale (including cash received as consideration for the assumption of liabilities incurred in connection with or in anticipation of such Asset Sale), after (a) provision for all income or other taxes measured by or resulting from such Asset Sale, (b) payment of all brokerage commissions, underwriting and other fees and expenses related to such Asset Sale, (c) provision for minority interest holders in any Restricted Subsidiary as a result of such Asset Sale and (d) deduction of appropriate amounts to be provided by the Company or a Restricted Subsidiary as a reserve, in accordance with GAAP, against any liabilities associated with the assets sold or disposed of in such Asset Sale and retained by the Company or a Restricted Subsidiary after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with the assets sold or disposed of in such Asset Sale, and (ii) promissory notes and other non-cash consideration received by the Company or any Restricted Subsidiary from such Asset Sale or other disposition upon the liquidation or conversion of such notes or non-cash consideration into cash. 12 -4- "Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value of the notes (discounted according to GAAP at the cost of indebtedness implied in the lease) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended). "Autokola" means Hayes-Wheels Autokola N.H. a.s. "Available Asset Sale Proceeds" means, with respect to any Asset Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not been applied in accordance with clause (iii)(A), (iii)(B), (iii)(C) or (iii)(D) of Section 4.15(a) and which have not been the basis for an Excess Proceeds Offer in accordance with clause (iii)(E) of such Section 4.15(a). "Board of Directors" means the board of directors of the Company or a Guarantor, as appropriate, or any committee authorized to act therefor. "Board Resolution" means a copy of a resolution certified pursuant to an Officers' Certificate to have been duly adopted by the Board of Directors of the Company or a Guarantor, as appropriate, and to be in full force and effect, and delivered to the Trustee. "Capital Stock" means, with respect to any Person, any and all shares or other equivalents (however designated) of capital stock, partnership interests or any other participation, right or other interest in the nature of an equity interest in such Person or any option, warrant or other security convertible into any of the foregoing. "Capitalized Lease Obligations" means Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of such Indebtedness shall be the capitalized amount of such obligations determined in accordance with GAAP. "Cash Equivalents" means (i) direct obligations of the United States of America or any agency thereof, or obligations guaranteed or insured by the United States of America, provided that in each case such obligations mature within one year from the date of acquisition thereof, (ii) certificates of deposit maturing within one year from the date of creation 13 -5- thereof issued by any U.S. national or state banking institution having capital, surplus and undivided profits aggregating at least $500,000,000 and rated at least A-1 by S&P and P-1 by Moody's, (iii) commercial paper with a maturity of 180 days or less issued by a corporation (except an Affiliate of the Company) organized under the laws of any state of the United States or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody's and (iv) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by an agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition; provided that the terms of such agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency and (v) tax-exempt auction rate securities and municipal preferred stock, in each case, subject to reset no more than 35 days after the date of acquisition and having a rating of at least AA by S&P or AA by Moody's. A "Change of Control" of the Company will be deemed to have occurred at such time as (i) any Person (including a Person's Affiliates and associates), other than a Permitted Holder, becomes the beneficial owner (as defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of 50% or more of the total voting power of the Company's Common Stock, (ii) any Person (including a Person's Affiliates and associates), other than a Permitted Holder, becomes the beneficial owner of more than 30% of the total voting power of the Company's Common Stock, and either (A) the Permitted Holders beneficially own, in the aggregate, a lesser percentage of the total voting power of the Common Stock of the Company than such other Person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company or [(B) JLL is the beneficial owner of less than 20% of the total voting power of the Company's Common Stock], (iii) there shall be consummated any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which the Common Stock of the Company would be converted into cash, securities or other property, other than a merger or consolidation of the Company in which the holders of the Common Stock of the Company outstanding immediately prior to the consolidation or merger hold, directly or indirectly, at least a majority of the Common Stock of the surviving corporation immediately after such consolida- 14 -6- tion or merger, or (iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company has been approved by 66 2/3% of the directors then still in office who either were directors at the beginning of such period or whose election or recommendation for election was previously so approved) cease to constitute a majority of the Board of Directors of the Company. "Chase" means Chase Equity Associates, L.P. "CIBC" means Canadian Imperial Bank of Commerce. "Common Stock" of any Person means all Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management and policies of such Person. "Company" means the party named as such in the first paragraph of this Indenture until a successor replaces such party pursuant to Article 5 of this Indenture and thereafter means the successor and any other obligor on the Notes. "Company Request" means any written request signed in the name of the Company by the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer or the Treasurer and attested to by the Secretary or any Assistant Secretary of the Company. "Consolidated Fixed Charges" means, with respect to any Person, the sum of a Person's (i) Consolidated Interest Expense, plus (ii) the product of (x) the aggregate amount of all dividends paid on Disqualified Capital Stock of the Company or on each series of preferred stock of each Subsidiary of such Person (other than dividends paid or payable in additional shares of preferred stock or to the Company or any of its Wholly-Owned Subsidiaries) times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective combined federal, state and local tax rate of such Person (expressed as a decimal), in each case, for such four-quarter period. "Consolidated Interest Expense" means, with respect to any Person, for any period and without duplication, the ag- 15 -7- gregate amount of interest which, in conformity with GAAP, would be set forth opposite the caption "interest expense" or any like caption on an income statement for such Person and its Subsidiaries on a consolidated basis (including, but not limited to, (i) imputed interest included in Capitalized Lease Obligations, (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (iii) net payments made in connection with Interest Rate Agreements, (iv) the interest portion of any deferred payment obligation, (v) amortization of discount or premium, if any, and (vi) all other non-cash interest expense (other than interest amortized to cost of sales)) plus, all net capitalized interest for such period and all interest paid under any guarantee of Indebtedness (including a guarantee of principal, interest or any combination thereof) of any Person, and minus (i) net payments received in connection with Interest Rate Agreements and (ii) amortization of deferred financing costs and expenses. "Consolidated Net Income" means, with respect to any Person, for any period, the aggregate of the net income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided, however, that there shall be excluded from Consolidated Net Income (a) the net income of any Person which under GAAP is not consolidated with the Person in question other than the amount of dividends or distributions paid to the Person in question or the Subsidiary, (b) the net income of any Subsidiary of the Person in question, other than a Domestic Subsidiary, that is subject to any restriction or limitation on the payment of dividends or the making of other distributions (other than pursuant to the Notes or this Indenture) to the extent of such restriction or limitation (provided that if any such restriction or limitation by its terms takes effect upon the occurrence of a default or an event of default, such exclusion shall become effective only upon the occurrence and during the continuance of such default or event of default), (c) the net income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition, (d) any net gain or loss resulting from a sale of Property by the Person in question or any of its Subsidiaries other than in the ordinary course of business, (e) extraordinary gains and losses, (f) non-recurring gains, non-cash non-recurring losses and charges (including restructuring charges and costs) and, in the case of the Company, cash restructuring charges for any period prior to July 31, 1998, (g) any amounts received by the Company or a Restricted Subsidiary which are used to offset Investments pursuant to the terms of clause (ii) of the definition of "Net In- 16 -8- vestments," and (h) in the case of clauses (d), (e) and (f), the associated tax effects during such period. "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 101 Barclay Street, Floor 21 West, New York, New York 10286. "Default" means any event that is, or with the passing of time or giving of notice or both would be, an Event of Default. "Depository" means, with respect to the notes issued in the form of one or more Global Notes, The Depository Trust Company or another Person designated as Depository by the Company, which Person must be a clearing agency registered under the Exchange Act. "Designated Senior Indebtedness," as to the Company or any Guarantor, as the case may be, means any Senior Indebtedness (a) under or in respect of the Amended Credit Agreement, or (b) which at the time of determination exceeds $25,000,000 in aggregate principal amount (or accreted value in the case of Indebtedness issued at a discount) outstanding or available under a committed facility, and (i) which is specifically designated in the instrument evidencing such Senior Indebtedness as "Designated Senior Indebtedness" by such Person and (ii) as to which the Trustee has been given written notice of such designation. "Disqualified Capital Stock" means any Capital Stock of the Company or a Restricted Subsidiary thereof which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Notes, for cash or securities constituting Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock shall be deemed to include any Preferred Stock of a Restricted Subsidiary of the Company or the Company, under which, by agreement or otherwise, such Restricted Subsidiary or the Company is obligated to pay current dividends or distributions in cash during the period prior to the maturity date of the Notes; provided, however, that Preferred Stock of the Company or any Restricted Subsidiary thereof that is issued with the benefit 17 -9- of provisions requiring a change of control offer to be made for such Preferred Stock in the event of a change of control of the Company or Restricted Subsidiary, which provisions have substantially the same effect as the provisions described in Section 4.20, shall not be deemed to be Disqualified Capital Stock solely by virtue of such provisions and, provided, further, that Capital Stock owned by the Company or any Restricted Subsidiary shall not constitute Disqualified Capital Stock. "Domestic" with respect to any Person shall mean a Person whose jurisdiction of incorporation or formation is the United States, any state thereof or the District of Columbia. "EBITDA" means, for any Person, for any period, an amount equal to (a) the sum of (i) Consolidated Net Income for such period, plus (ii) the provision for taxes for such period based on income or profits to the extent such income or profits were included in computing Consolidated Net Income and any provision for taxes utilized in computing net loss under clause (i) hereof, plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation for such period, plus (v) amortization for such period (including the amortization of deferred financing costs and expenses), plus (vi) any other non-cash items (including minority interests) reducing Consolidated Net Income for such period, plus (vii) non-recurring losses and charges (including restructuring charges and costs) whether cash or non-cash for such period to the extent not included in the calculation of Consolidated Net Income, minus (viii) all non-cash items increasing Consolidated Net Income for such period, all for such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP, except that with respect to the Company each of the foregoing items shall be determined on a consolidated basis with respect to the Company and its Restricted Subsidiaries only. "Equity Offering" means an offering by the Company of shares of its common stock (however designated and whether voting or non-voting) and any and all rights, warrants or options to acquire such common stock. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Notes" has the meaning provided in the Registration Rights Agreement. "Fixed Charge Coverage Ratio" of any Person means, with respect to any determination date, the ratio of (i) EBITDA 18 -10- for such Person's prior four full fiscal quarters for which financial results have been reported immediately preceding the determination date, to (ii) Consolidated Fixed Charges of such Person. "Foreign EBITDA" means, for any period, the aggregate of the EBITDA of each of the Company's Restricted Subsidiaries which are not Guarantors. "Foreign Interest Expense" means, for any period, the aggregate of the Consolidated Interest Expense of each of the Company's Restricted Subsidiaries which are not Guarantors. "GAAP" means generally accepted accounting principles consistently applied as in effect in the United States from time to time. "Guarantee" means the guarantee of the Obligations of the Company with respect to the Notes by each Guarantor pursuant to the terms of Article 10 hereof. "Guarantor" means (i) each of Hayes Wheels International-California, Inc., a Delaware corporation, Hayes Wheels International-Georgia, Inc., a Delaware corporation, Hayes Wheels International-Indiana, Inc., a Delaware corporation, Hayes Wheels International-Mexico, Inc., a Delaware corporation, Hayes Wheels International-Michigan, Inc., a Michigan corporation, Motor Wheel Corporation, an Ohio corporation and MWC Acquisition Sub, Inc., a Delaware corporation and (ii) each Restricted Subsidiary of the Company that hereafter becomes a Guarantor pursuant to Section 10.04, and "Guarantors" means such entities, collectively. "Guarantor Senior Indebtedness" means the principal of and premium, if any, and interest (including, without limitation, interest accruing or that would have accrued but for the filing of a bankruptcy, reorganization or other insolvency proceeding whether or not such interest constitutes an allowed claim in such proceeding) on, and any and all other fees, charges, expense reimbursement obligations, indemnities and other amounts due pursuant to the terms of all agreements, documents and instruments providing for, creating, securing, guaranteeing or evidencing or otherwise entered into in connection with, (a) Guarantor's direct incurrence of any Indebtedness or its guarantee of all Indebtedness of the Company, in each case, owed to lenders under or in respect of the Amended Credit Agreement, (b) all obligations of such Guarantor with respect to any Interest Rate Agreement, (c) all obligations of 19 -11- such Guarantor to reimburse any bank or other person in respect of amounts paid under letters of credit, acceptances or other similar instruments, (d) all other Indebtedness of such Guarantor which does not provide that it is to rank pari passu with or subordinate to the Guarantees and (e) all deferrals, renewals, extensions, refundings, refinancings and restructurings of, and amendments, modifications and supplements to, any of the Guarantor Senior Indebtedness described above. Notwithstanding anything to the contrary in the foregoing, Guarantor Senior Indebtedness will not include (i) Indebtedness of such Guarantor to any of its Subsidiaries, (ii) Indebtedness represented by the Notes, the Existing Notes, the Guarantees and the Guarantees of the Existing Notes, (iii) any Indebtedness which by the express terms of the agreement or instrument creating, evidencing or governing the same is junior or subordinate in right of payment to any item of Guarantor Senior Indebtedness, (iv) any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business or (v) Indebtedness incurred in violation of this Indenture. "Holder" or "Noteholder" means the Person in whose name a Note is registered on the Registrar's books. "incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "incurrence," "incurred," "incurrable," and "incurring" shall have meanings correlative to the foregoing); provided that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an incurrence of such Indebtedness. "Indebtedness" means (without duplication), with respect to any Person, any indebtedness at any time outstanding, secured or unsecured, contingent or otherwise, which is for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments or representing the balance deferred and unpaid of the purchase price of any Property (excluding, without limitation, any balances that constitute accounts payable or trade payables, and other accrued liabilities arising in the ordinary course of business) if and to the extent any of the foregoing 20 -12- indebtedness would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and shall also include, to the extent not otherwise included, (i) any Capitalized Lease Obligations, (ii) obligations of others secured by a Lien to which the property or assets owned or held by such Person is subject, whether or not the obligation or obligations secured thereby shall have been assumed, (iii) guarantees of obligations of other Persons which would be included within this definition for such other Persons (whether or not such items would appear upon the balance sheet of the guarantor), (iv) all obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (v) in the case of the Company, Disqualified Capital Stock and, in the case of any Restricted Subsidiary, Preferred Stock, (vi) obligations of any such Person under any Interest Rate Agreement (if and to the extent such Interest Rate Agreement obligations would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP) and (vii) Attributable Indebtedness. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided (i) that the amount outstanding at any time of any Indebtedness issued with original issue discount is the principal amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP and (ii) that Indebtedness shall not include any liability for Federal, state, local or other taxes. Notwithstanding any other provision of the foregoing definition, any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business shall not be deemed to be "Indebtedness" of the Company or any Restricted Subsidiaries for purposes of this definition. Furthermore, guarantees of (or obligations with respect to letters of credit supporting) Indebtedness and Liens securing Indebtedness otherwise included in the determination of such amount shall not also be included. "Indenture" means this Indenture as amended, restated or supplemented from time to time. "Initial Global Securities" means the Regulation S Global Security and the 144A Global Security, each of which contains a Securities Act Legend. 21 -13- "Initial Purchasers" means CIBC Wood Gundy Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. "Institutional Accredited Investor" means an institution that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities Act. "Interest Payment Date" means the stated maturity of an installment of interest on the Notes. "Interest Rate Agreement" means, for any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement designed to protect the party indicated therein against fluctuations in interest rates. "Investments" means, directly or indirectly, any advance, account receivable, loan or capital contribution to (by means of transfers of property to others, payments for property or services for the account or use of others or otherwise), the purchase of any stock, bonds, notes, debentures, partnership or joint venture interests or other securities of, the acquisition, by purchase or otherwise, of all or substantially all of the business or assets or stock or other evidence of beneficial ownership of, any Person. Investments shall exclude extensions of trade credit on commercially reasonable terms in accordance with normal trade practices. "Issue Date" means the date the Notes are first issued by the Company and authenticated by the Trustee under this Indenture. "JLL" means Joseph Littlejohn & Levy Fund II, L.P. "Lemmerz" means Lemmerz Holding GmbH, a limited liability company organized under the laws of the Federal Republic of Germany. "Lemmerz Acquisition" means the acquisition by the Company of Lemmerz pursuant to the purchase agreement dated June 6, 1997 among the Company, Cromodora Wheels S.p.A., Lemmerz and the shareholders of Lemmerz. "Lien" means, with respect to any Property of any Person, any mortgage or deed of trust, pledge, hypothecation, deposit arrangement, security interest, lien, charge, encumbrance, preference, priority, or other security agreement or 22 -14- preferential arrangement of any kind or nature whatsoever on or with respect to such Property or assets (including, without limitation, any Capitalized Lease Obligation, conditional sales, or other title retention agreement having substantially the same economic effect as any of the foregoing). "Maturity Date" means July 15, 2007. "Merrill Lynch" means Merrill Lynch Capital Corporation. "Moody's" means Moody's Investors Service, Inc. and its successors. "Motor Wheel" means Motor Wheel Corporation, a wholly owned subsidiary of the Company. "Net Cash Proceeds" means (a) in the case of any sale of Capital Stock by the Company, the aggregate net cash proceeds received by the Company, after payment of expenses, commissions, underwriting discounts and the like incurred in connection therewith, (b) in the case of any exchange, exercise, conversion or surrender of outstanding securities of any kind for or into shares of Capital Stock of the Company which is not Disqualified Capital Stock, the net cash proceeds received from the sale of such outstanding securities so exchanged, exercised, converted or surrendered (plus any additional amount required to be paid in cash by the holder to the Company upon such exchange, exercise, conversion or surrender, less any and all payments made to the holders, e.g., on account of fractional shares and less all expenses incurred by the Company in connection therewith) and (c) in the case of any issuance of any Indebtedness by the Company or any Restricted Subsidiary, the aggregate net cash proceeds received by such Person after payment of expenses, commissions, underwriting discounts and the like incurred in connection therewith. "Net Investment" means the excess of (i) the aggregate amount of all Investments in Unrestricted Subsidiaries or joint ventures made by the Company or any Restricted Subsidiary on or after the Original Issue Date (in the case of an Investment made other than in cash, the amount shall be the fair market value of such Investment as determined in good faith by the Board of Directors of the Company or such Restricted Subsidiary) over (ii) the sum of (A) the aggregate amount returned in cash on or with respect to such Investments whether through interest payments, principal payments, dividends or other distributions or payments and (B) the Net Cash Proceeds received by 23 -15- the Company or any Restricted Subsidiary or joint ventures from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company); provided, however, that with respect to all Investments made in any Unrestricted Subsidiary or joint ventures the sum of clauses (A) and (B) above with respect to such Investments shall not exceed the aggregate amount of all such Investments made in such Unrestricted Subsidiary. "Nomura" means Nomura Holding America, Inc. "Non-Payment Event of Default" means any event (other than a Payment Default) the occurrence of which entitles one or more Persons to accelerate the maturity of any Designated Senior Indebtedness. "Non-U.S. Person" means a Person who is not a U.S. person, as defined in Regulation S. "Notes" means the 9 1/8% Senior Subordinated Notes due 2007 issued by the Company, including, without limitation, the Private Exchange Notes, if any, and the Exchange Notes, treated as a single class of securities, as amended or supplemented from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture. "Obligations" means, with respect to any Indebtedness, any principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other expenses payable under the documentation governing such Indebtedness. "Offering" means the offering of the Notes as described in the Offering Memorandum. "Offering Memorandum" means the Offering Memorandum dated July 16, 1997 pursuant to which the Notes issued on the Issue Date were offered. "Officer" means the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer or the Secretary of the Company or a Guarantor, or any other officer designated by the Board of Directors, as the case may be. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chief Executive Officer, the President or any Vice President, and the Chief Financial 24 -16- Officer or any Treasurer of such Person that shall comply with applicable provisions of this Indenture. "Opinion of Counsel" means a written opinion from legal counsel which counsel is reasonably acceptable to the Trustee. "Original Issue Date" means July 2, 1996. "Original Credit Agreement" means the Credit Agreement, dated as of July 2, 1996, among the Company, CIBC, as administrative agent, Merrill Lynch, as documentation agent, and the lenders from time to time parties thereto. "Payment Default" means any default, whether or not any requirement for the giving of notice, the lapse of time or both, or any other condition to such default becoming an Event of Default has occurred, in the payment of principal of (or premium, if any) or interest on or any other amount payable in connection with Designated Senior Indebtedness. "Permitted Holders" means (i) JLL or any other fund controlled by Joseph Littlejohn & Levy, (ii) TSG, (iii) Argosy, (iv) Nomura and (v) Chase. "Permitted Indebtedness" means: (i) Indebtedness of the Company or any Domestic Restricted Subsidiary arising under or in respect of the Amended Credit Agreement in an aggregate amount (the "Permitted Credit Agreement Amount") not to exceed (A) $590,500,000 (which gives effect to the concurrent repayment of amounts outstanding under the Credit Agreement on the Issue Date), less (B) any mandatory prepayments actually made thereunder (to the extent, in the case of payments of revolving credit Indebtedness, that the corresponding commitments have been permanently reduced) or scheduled payments actually made thereunder, in each case, after consummation of the Lemmerz Acquisition; (ii) Indebtedness under the Notes and the Guarantees; (iii) Indebtedness not covered by any other clause of this definition which is outstanding on the Issue Date; (iv) Indebtedness incurred to finance the working capital requirements of the Western European operations of the Company's Restricted Subsidiaries pursuant to commit- 25 -17- ments outstanding on the Issue Date in an aggregate amount not to exceed $10,000,000 (or, to the extent non-U.S. dollar denominated, the U.S. dollar equivalent thereof); (v) Indebtedness of Autokola not to exceed $35,000,000 in principal amount in the aggregate which is incurred after the Issue Date as a result of it becoming a Subsidiary of the Company; (vi) Indebtedness of the Company to any Domestic Restricted Subsidiary which is a Wholly-Owned Subsidiary and Indebtedness of any Restricted Subsidiary to the Company or another Restricted Subsidiary provided that in the case of Indebtedness of a Domestic Restricted Subsidiary such Indebtedness is owed to another Domestic Restricted Subsidiary; (vii) Purchase Money Indebtedness and Capitalized Lease Obligations incurred to acquire property in the ordinary course of business which Indebtedness and Capitalized Lease Obligations do not in the aggregate exceed 5% of the Company's consolidated total assets as of the Company's most recent quarterly balance sheet; (viii) Interest Rate Agreements; (ix) additional Indebtedness of the Company and its Restricted Subsidiaries not to exceed $50,000,000 in aggregate principal amount outstanding at any time; (x) Refinancing Indebtedness; (xi) Indebtedness incurred in accordance with Section 4.11; and (xii) Indebtedness of the Company or its Subsidiaries which is denominated in a currency other than U.S. dollars, provided that (a) the U.S. dollar equivalent thereof on the date of incurrence (together with the U.S. dollar equivalent on such date of all other Indebtedness incurred under this clause (xii)) shall not exceed $80,000,000, and (b) on the last Business Day of each month, the sum of (1) the U.S. dollar equivalent of all Indebtedness outstanding under this clause (xii), and (2) the outstanding principal amount of Indebtedness under the Amended Credit Agreement, including reimbursement obligations in respect of letters of credit (in each case after giving effect to any currency hedging arrangements applicable thereto to which the 26 -18- Company or a Subsidiary of the Company is a party), shall not exceed the Permitted Credit Agreement Amount. "Permitted Investments" means, for any Person, Investments made on or after the date of this Indenture consisting of: (i) Investments by the Company, or by a Restricted Subsidiary thereof, in the Company or a Restricted Subsidiary; (ii) Temporary Cash Investments; (iii) Investments by the Company, or by a Restricted Subsidiary thereof, in a Person, if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary; (iv) reasonable and customary loans made to employees not to exceed $1,000,000 in the aggregate at any one time outstanding; (v) an Investment that is made by the Company or a Restricted Subsidiary thereof in the form of any stock, bonds, notes, debentures, partnership or joint venture interests or other securities that are issued by a third party to the Company or Restricted Subsidiary solely as partial consideration for the consummation of an Asset Sale; (vi) Investments in Unrestricted Subsidiaries and joint ventures permitted under subclause (v) of the second paragraph of Section 4.13; (vii) Investments received in connection with the bankruptcy or reorganization of Persons having obligations in favor of the Company or its Subsidiaries (which obligations were incurred in the ordinary course), in settlement of such obligations; and (viii) Investments paid for in Common Stock of the Company. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, 27 -19- unincorporated organization or government (including any agency or political subdivision thereof). "Physical Notes" means certificated Notes in registered form in substantially the form set forth in Exhibit A. "Preferred Stock" means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to dividends, distributions or liquidation proceeds of such Person over the holders of other Capital Stock issued by such Person. "Private Exchange" has the meaning set forth in the Registration Rights Agreement. "Private Exchange Notes" has the meaning set forth in the Registration Rights Agreement. "Private Placement Legend" means the legend initially set forth on the Rule 144A Notes in the form set forth in Exhibit B. "Property" of any Person means all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP. "Purchase Agreement" means the Purchase Agreement dated as of July 16, 1997 by and among the Company, the Guarantors and the Initial Purchasers. "Purchase Money Indebtedness" means any Indebtedness incurred in the ordinary course of business by a Person to finance the cost (including the cost of construction) of an item of Property, the principal amount of which Indebtedness does not exceed the sum of (i) 100% of such cost and (ii) reasonable fees and expenses of such Person incurred in connection therewith. "Qualified Institutional Buyer" or "QIB" shall have the meaning specified in Rule 144A promulgated under the Securities Act. "Redemption Date" when used with respect to any Note to be redeemed means the date fixed for such redemption pursuant to this Indenture. 28 -20- "Refinancing Indebtedness" means Indebtedness that refunds, refinances or extends any Indebtedness of the Company or its Subsidiaries outstanding on the Issue Date or other Indebtedness permitted to be incurred by the Company or its Restricted Subsidiaries pursuant to the terms of this Indenture, but only to the extent that (i) the Refinancing Indebtedness is subordinated to the Notes to at least the same extent as the Indebtedness being refunded, refinanced or extended, if at all, (ii) the Refinancing Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness being refunded, refinanced or extended, or (b) after the maturity date of the Notes, (iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notes has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the weighted average life to maturity of the portion of the Indebtedness being refunded, refinanced or extended that is scheduled to mature on or prior to the maturity date of the Notes, (iv) such Refinancing Indebtedness is in an aggregate principal amount that is equal to or less than the sum of (a) the aggregate principal amount then outstanding under the Indebtedness being refunded, refinanced or extended, (b) the amount of accrued and unpaid interest, if any, and any necessary premiums (including the amount of any premium reasonably determined by the Company or the applicable Restricted Subsidiary as necessary to accomplish such refunding, refinancing or extension) on such Indebtedness being refunded, refinanced or extended and (c) the amount of customary fees, expenses and costs related to the incurrence of such Refinancing Indebtedness, (v) such Refinancing Indebtedness is incurred by the same Person that initially incurred the Indebtedness being refunded, refinanced or extended, except that the Company may incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of any Wholly-Owned Subsidiary of the Company; provided, however, that any non-Domestic Restricted Subsidiary may incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of the Company arising under or in respect of the Amended Credit Agreement in an aggregate amount not to exceed $20,000,000 outstanding at any time; and provided, further, that with respect to such Refinancing Indebtedness referred to in the previous provision, clauses (ii) and (iii) shall not apply, and (vi) if such Indebtedness was incurred pursuant to Section 4.11(a) and does not contain any restriction or limitation on the payment of dividends or the making of other distributions then the Refinancing Indebtedness shall not contain any such limitation or restriction. 29 -21- "Registration Rights Agreement" means the Registration Rights Agreement dated as of the Issue Date among the Company, the Guarantors and the Initial Purchasers, as amended from time to time. "Regulation S" means Regulation S promulgated under the Securities Act. "Responsible Officer" when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Note" has the same meaning as "Restricted Security" set forth in Rule 144(a)(3) promulgated under the Securities Act; provided, that the Trustee shall be entitled to request and conclusively rely upon an Opinion of Counsel with respect to whether any Note is a Restricted Note. "Restricted Payment" means any of the following: (i) the declaration or payment of any dividend or any other distribution or payment on Capital Stock of the Company or any Restricted Subsidiary of the Company or any payment made to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company or any Restricted Subsidiary of the Company (other than (x) dividends or distributions payable solely in Capital Stock (other than Disqualified Capital Stock) or in options, warrants or other rights to purchase Capital Stock (other than Disqualified Capital Stock), and (y) in the case of Restricted Subsidiaries of the Company, dividends or distributions payable to the Company or to a Wholly-Owned Subsidiary of the Company), (ii) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any of its Restricted Subsidiaries (other than Capital Stock owned by the Company or a Wholly-Owned Subsidiary of the Company, excluding Disqualified Capital Stock), (iii) the purchase, defeasance, repurchase, redemption or other acquisition or retirement for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment of, or the making of any principal payment on, any Indebtedness which is subordinated in right of payment to the Notes other than subordinated Indebtedness acquired in anticipation of satisfying a scheduled sinking fund obligation, principal installment 30 -22- or final maturity (in each case due within one year of the date of acquisition), (iv) the making of any Investment or guarantee of any Investment in any Person other than a Permitted Investment, (v) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary on the basis of the Net Investment by the Company therein and (vi) forgiveness of any Indebtedness of an Affiliate of the Company to the Company or a Restricted Subsidiary. For purposes of determining the amount expended for Restricted Payments, cash distributed or invested shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value determined in good faith by the Board of Directors of the Company. "Restricted Subsidiary" means a Subsidiary of the Company other than an Unrestricted Subsidiary. The Board of Directors of the Company may designate any Unrestricted Subsidiary or any Person that is to become a Subsidiary as a Restricted Subsidiary if immediately after giving effect to such action (and treating any Acquired Indebtedness as having been incurred at the time of such action), the Company could have incurred at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10. "Rule 144" means Rule 144 promulgated under the Securities Act. "Rule 144A" means Rule 144A promulgated under the Securities Act. "Sale and Lease-Back Transaction" means any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of the Company of any real or tangible personal Property, which Property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person in contemplation of such leasing. "S&P" means Standard & Poor's Corporation and its successors. "SEC" means the United States Securities and Exchange Commission as constituted from time to time or any successor performing substantially the same functions. "Securities Act" means the Securities Act of 1933, as amended. "Senior Indebtedness" means the principal of and premium, if any, and interest (including, without limitation, in- 31 -23- terest accruing or that would have accrued but for the filing of a bankruptcy, reorganization or other insolvency proceeding whether or not such interest constitutes an allowed claim in such proceeding) on, and any and all other fees, charges, expense reimbursement obligations, indemnities and other amounts due pursuant to the terms of all agreements, documents and instruments providing for, creating, securing, guaranteeing or evidencing or otherwise entered into in connection with (a) all obligations, whether outstanding on the Issue Date or thereafter incurred, of the Company owed to lenders under or in respect of the Amended Credit Agreement, (b) all obligations of the Company with respect to any Interest Rate Agreement, (c) all obligations of the Company to reimburse any bank or other person in respect of amounts paid under letters of credit, acceptances or other similar instruments, (d) all other Indebtedness of the Company which does not provide that it is to rank pari passu with or subordinate to the Notes and (e) all deferrals, renewals, extensions, refundings, refinancings and restructurings of, and amendments, modifications and supplements to, any of the Senior Indebtedness described above. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness will not include (i) Indebtedness of the Company to any of its Subsidiaries, (ii) Indebtedness represented by the Notes, the 11% Notes, the 9 1/8% Notes, and, in each case, the guarantees thereof, (iii) any Indebtedness which by the express terms of the agreement or instrument creating, evidencing or governing the same is junior or subordinate in right of payment to any item of Senior Indebtedness, (iv) any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business, or (v) Indebtedness incurred in violation of this Indenture. "Subsidiary" of any specified Person means any corporation, partnership, joint venture, association or other business entity, whether now existing or hereafter organized or acquired, (i) in the case of a corporation, of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, officers or trustees thereof is held by such first-named Person or any of its Subsidiaries; or (ii) in the case of a partnership, joint venture, association or other business entity, with respect to which such first-named Person or any of its Subsidiaries has the power to direct or cause the direction of the management and policies of such entity by contract or otherwise or if in accordance with GAAP such entity is consolidated with the first-named Person for financial statement purposes. 32 -24- "Temporary Cash Investments" means (i) Investments in marketable, direct obligations issued or guaranteed by the United States of America, or of any governmental agency or political subdivision thereof, maturing within 365 days of the date of purchase; (ii) Investments in demand deposits or certificates of deposit issued by a bank organized under the laws of the United States of America or any state thereof or the District of Columbia, in each case having capital, surplus and undivided profits totaling more than $500,000,000 and rated at least A by S&P and A-2 by Moody's, maturing within 365 days of purchase; (iii) Investments in commercial paper, maturing not more than 180 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any Investment therein is made of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P; (iv) in the case of any non-Domestic Restricted Subsidiary, Investments: (a) in direct obligations of the sovereign nation (or any agency thereof) in which such non-Domestic Restricted Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof) or (b) of the type and maturity described in clauses (i) through (iii) above of foreign obligors, which Investments or obligors (of the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies; or (v) Investments not exceeding 365 days in duration in money market funds that invest substantially all of such funds' assets in the Investments described in the preceding clauses (i) and (iv). "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section Section 77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in Section 8.03 hereof). "Trust Officer" means any officer or assistant officer of the Trustee assigned by the Trustee to administer trust accounts. "Trustee" means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture and thereafter means the successor. "TSG" means TSG Capital Fund II, L.P. "Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted Subsidiary and (b) any Subsidiary of the Com- 33 -25- pany which is classified after the Issue Date as an Unrestricted Subsidiary by a resolution adopted by the Board of Directors of the Company; provided that a Subsidiary organized or acquired after the Issue Date may be so classified as an Unrestricted Subsidiary only if such classification is in compliance with Section 4.13 hereof. The Trustee shall be given prompt written notice by the Company of each resolution adopted by the Board of Directors of the Company under this provision, together with a copy of each such resolution adopted. "U.S. Government Obligations" means direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which obligation or guarantee the full faith and credit of the United States of America is pledged. "Western Europe" means, with respect to any jurisdictional matter, any of the twelve current member states of the European Community and Switzerland, Norway, Sweden, Finland, Austria and the Czech Republic (and "Western European" shall have a meaning correlative to the foregoing). "Wholly-Owned Subsidiary" means any Restricted Subsidiary all of the outstanding voting securities (other than directors' qualifying shares or similar requirements of law in respect of non-Domestic Subsidiaries and other than shares of Lemmerz representing not more than .01% of the voting securities thereof) of which are owned, directly or indirectly, by the Company. Section 1.02. Other Definitions. The definitions of the following terms may be found in the sections indicated as follows:
Term Defined in Section - ---- ------------------ "Acquisition" ......................................... 4.10 "Affiliate Transaction" ............................... 4.16 "Bankruptcy Law" ...................................... 6.01 "Business Day" ........................................ 12.08 "Change of Control Offer".............................. 4.20 "Change of Control Payment Date" ...................... 4.20 "Change of Control Purchase Price" .................... 4.20 "Covenant Defeasance" ................................. 9.03 "Custodian" ........................................... 6.01 "Event of Default" .................................... 6.01 "Excess Proceeds Offer"................................ 4.15
34 -26- "Guarantee Payment Blockage Period".......... 10.08 "Guarantor Representative ................... 10.08 "Initial Blockage Period" ................... 11.03 "Initial Guarantee Blockage Period" ......... 10.08 "Legal Defeasance" .......................... 9.02 "Legal Holiday" ............................. 12.08 "Offer Period" .............................. 4.15 "Other Notes" ............................... 2.01 "Paying Agent" .............................. 2.03 "Payment Blockage Period" ................... 11.03 "Purchase Date" ............................. 4.15 "Registrar" ................................. 2.03 "Regulation S Notes ......................... 2.01 "Reinvestment Date" ......................... 4.15 "Representative" ............................ 11.03 "Restricted Global Notes" ................... 2.42 "Rule 144A Notes" ........................... 2.01 Section 1.03. Incorporation by Reference of Trust Indenture Act. -----------------------------------
Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated herein in order for this Indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Notes. "indenture securityholder" means a Noteholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor on the indenture securities" means the Company, the Guarantors or any other obligor on the Notes or the Guarantees. All other terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings therein assigned to them. 35 -27- Section 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it herein, whether defined expressly or by reference; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; and (5) words used herein implying any gender shall apply to every gender. ARTICLE 2 THE NOTES Section 2.01. Amount of Notes and Form and Dating. The Trustee shall, upon receipt of a Company Request, authenticate Notes for original issue on the Issue Date in the aggregate principal amount of $150,000,000. Each such written order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated and the title of the Notes of the series (which shall distinguish the Notes of the series from Notes of any other series). All Notes issued on the Issue Date shall be identical in all respects. The aggregate principal amount of Notes outstanding at any time may not exceed $150,000,000 except as provided in Section 2.08. Upon receipt of a Company Request and an Officers' Certificate certifying that a registration statement relating to an exchange offer specified in the Registration Rights Agreement is effective and that, if necessary, the conditions precedent to a Private Exchange thereunder have been met, the Trustee shall authenticate an additional series of Notes in an aggregate principal amount not to exceed $150,000,000 for issuance in exchange for the Notes tendered for exchange pursuant to such exchange offer registered under the Securities Act and, if necessary, pursuant to a Private Exchange. Exchange Notes or Private Exchange Notes may have such distinctive series designations and such changes in the form thereof as are specified in the Company Request. 36 -28- The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A which is incorporated in and made part of this Indenture. The Notes may have notations, legends or endorsements required by law, rule or usage. The Company may use "CUSIP" numbers in issuing the Notes. The Company shall approve the form of the Notes. Without limiting the generality of the foregoing, Notes offered and sold to Qualified Institutional Buyers in reliance on Rule 144A ("Rule 144A Notes") shall bear the Private Placement Legend and include the form of assignment set forth in Exhibit C-1, Notes offered and sold in offshore transactions in reliance on Regulation S ("Regulation S Notes") shall bear the Private Placement Legend and include the form of assignment set forth in Exhibit C-2, and Notes offered and sold to Institutional Accredited Investors in transactions exempt from registration under the Securities Act not made in reliance on Rule 144A or Regulation S ("Other Notes") may be represented by the Restricted Global Note or, if such an investor may not hold an interest in the Restricted Global Note, a Physical Note in each case bearing the Private Placement Legend. Each Note shall be dated the date of its authentication. The terms and provisions contained in the Notes and the Guarantee shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Section 2.02. Execution and Authentication. The Notes shall be executed on behalf of the Company by two Officers of the Company or an Officer and an Assistant Secretary of the Company. Such signature may be either manual or facsimile. The Company's seal shall be impressed, affixed, imprinted or reproduced on the Notes and may be in facsimile form. If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless. A Note shall not be valid until the Trustee manually signs the certificate of authentication on the Note. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture. 37 -29- The Trustee or an authenticating agent shall authenticate Notes for original issue in the aggregate principal amount of $150,000,000 upon a Company Request. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof. The Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 and integral multiples thereof. The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same right as an Agent to deal with the Company or an Affiliate. Section 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar"), an office or agency located in the Borough of Manhattan, City of New York, State of New York where Notes may be presented for payment ("Paying Agent") and an office or agency where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. Neither the Company nor any Affiliate may act as Paying Agent. The Company may change any Paying Agent, Registrar or co-registrar without notice to any Noteholder. The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee in writing of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or agent for service of notices and demands, or fails to give the foregoing notice, the Trustee shall act as such. The Company initially appoints the Trustee as Registrar, Paying Agent and agent for service of notices and demands in connection with the Notes. 38 -30- Section 2.04. Paying Agent To Hold Assets in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that, subject to Articles 10 and 11, each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets held by the Paying Agent for the payment of principal of, or interest on, the Notes (whether such assets have been distributed to it by the Company or any other obligor on the Notes), and the Company and the Paying Agent shall notify the Trustee in writing of any Default by the Company (or any other obligor on the Notes) in making any such payment. The Company at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any Payment Default, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon distribution to the Trustee of all assets that shall have been delivered by the Company to the Paying Agent, the Paying Agent shall have no further liability for such assets. Section 2.05. Noteholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Noteholders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee as of each Record Date and at least seven Business Days before each related Interest Payment Date, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Noteholders. Section 2.06. Transfer and Exchange. Subject to Sections 2.14 and 2.15, when a Note is presented to the Registrar with a request to register the transfer thereof, the Registrar shall register the transfer as requested if the requirements of applicable law are met and, when Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other authorized denominations, the Registrar shall make the exchange as requested provided that every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly exe- 39 -31- cuted by the Holder thereof or his attorney duly authorized in writing. To permit transfers and exchanges, upon surrender of any Note for registration of transfer at the office or agency maintained pursuant to Section 2.03 hereof, the Company shall execute and the Trustee shall authenticate Notes (and the Subsidiary Guarantors shall execute the guarantee thereon) at the Registrar's written request. Any exchange or transfer shall be without charge, except that the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation to a transfer or exchange, but this provision shall not apply to any exchange pursuant to Sections 2.09, 3.06 or 8.05 hereof. The Trustee shall not be required to register transfers of Notes or to exchange Notes for a period of 15 days before selection of any Notes to be redeemed. The Trustee shall not be required to exchange or register transfers of any Notes called or being called for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. Any Holder of the Global Note shall, by acceptance of such Global Note, agree that transfers of the beneficial interests in such Global Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Global Note shall be required to be reflected in a book entry. Each Holder of a Note agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Note in violation of any provision of this Indenture and/or applicable United States federal or state securities law. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository Participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 40 -32- Section 2.07. Replacement Notes. If a mutilated Note is surrendered to the Trustee or if the Holder of a Note presents evidence to the satisfaction of the Company and the Trustee that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note (and the Guarantors shall execute a guarantee thereon) if the Trustee's requirements are met. An indemnity bond must be supplied by such Holder that is sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced. The Company may charge such Holder for its reasonable, out-of-pocket expenses in replacing a Note, including reasonable fees and expenses of counsel. Every replacement Note is an additional obligation of the Company. Section 2.08. Outstanding Notes. Notes outstanding at any time are all Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, and those described in this Section 2.08 as not outstanding. If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding until the Company and the Trustee receive proof satisfactory to each of them that the replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07. If a Paying Agent holds on a Redemption Date or Maturity Date money sufficient to pay the principal of, premium, if any, and accrued interest on Notes payable on that date and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue. Subject to Section 12.06, a Note does not cease to be outstanding solely because the Company or an Affiliate holds the Note. Section 2.09. Temporary Notes. Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall, upon receipt of a 41 -33- Company Request, authenticate temporary Notes. Temporary Notes shall be substantially in the form, and shall carry all rights, of definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes presented to it. Section 2.10. Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, shall cancel and at the written request of the Company, shall dispose of all Notes surrendered for transfer, exchange, payment or cancellation, provided, however, that in no event shall the Trustee be required to destroy any such Notes. If the Company or any Guarantor shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation or pursuant to this Section 2.10. Section 2.11. Defaulted Interest. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted amounts, plus any interest payable on defaulted amounts pursuant to Section 4.01 hereof, to the persons who are Noteholders on a subsequent special record date, which date shall be the fifteenth day next preceding the date fixed by the Company for the payment of defaulted interest or the next succeeding Business Day if such date is not a Business Day. At least 15 days before the special record date, the Company shall mail or cause to be mailed to each Noteholder, with a copy to the Trustee, a notice that states the special record date, the payment date, and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid. Section 2.12. Deposit of Moneys. Prior to 10:00 a.m., New York City time, on each Interest Payment Date and on the Maturity Date, the Company shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date or on the Maturity Date, as the case 42 -34- may be, in a timely manner which permits the Trustee to remit payment to the Holders on such Interest Payment Date or on the Maturity Date, as the case may be. Section 2.13. CUSIP Number. The Company in issuing the Notes may use one or more "CUSIP" numbers, and if so, the Trustee shall use the CUSIP number(s) in notices of redemption or exchange as a convenience to Holders, provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number(s) printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. Section 2.14. Book-Entry Provisions for Global Notes. (a) Rule 144A Notes and Other Notes which may be held in global form, other than Regulation S Notes, initially shall be represented by one or more notes in registered, global form without interest coupons (collectively, the "Restricted Global Note"). Regulation S Notes initially shall be represented by one or more notes in registered, global form without interest coupons (collectively, the "Regulation S Global Note," and, together with the Restricted Global Note, the "Global Notes"). The Global Notes initially shall (i) be registered in the name of The Depository Trust Company ("DTC") or the nominee of DTC, in each case for credit to an account of an Agent Member (as defined below) (or, in the case of the Regulation S Global Notes, of Morgan Guaranty Trust Company, as operator of the Euroclear System ("Euroclear") and Cedel Bank, Societe Anonyme ("CEDEL")), (ii) be delivered to the Trustee as custodian for DTC and (iii) bear legends as set forth in Exhibit D. Members of, or direct or indirect participants in, DTC ("Agent Members") shall have no rights under this Indenture with respect to any Global Note held by DTC, or the Trustee as its custodian, or under the Global Notes, and DTC may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note. 43 -35- (b) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to DTC, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Physical Notes upon receipt by the Trustee of written instructions from DTC or its nominee on behalf of any beneficial owner and in accordance with the rules and procedures of DTC and the provisions of Section 2.15. In addition, a Global Note shall be exchangeable for Physical Notes if (i) DTC (x) notifies the Company that it is unwilling or unable to continue as depository for such Global Note and the Company thereupon fails to appoint a successor depository or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of such Physical Notes or (iii) there shall have occurred and be continuing a Default or an Event of Default with respect to the Notes. In all cases, Physical Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures). (c) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Note to beneficial owners pursuant to paragraph (b), the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Company shall execute, and the Trustee shall upon receipt of a written order from the Company authenticate and make available for delivery, one or more Physical Notes of like tenor and amount. (d) In connection with the transfer of Global Notes as an entirety to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver or make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in the Global Notes, an equal aggregate principal amount of Physical Notes of authorized denominations. (e) Any Physical Note constituting a Restricted Note delivered in exchange for an interest in a Global Note pursuant to paragraph (b) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.15, bear the Private 44 -36- Placement Legend or, in the case of the Regulation S Global Note, the legend set forth in Exhibit C, in each case, unless the Company determines otherwise in compliance with applicable law. (f) On or prior to the 40th-day after the later of the commencement of the offering of the Notes represented by the Regulation S Global Note and the issue date of such Notes (such period through and including such 40th day, the "Restricted Period"), a beneficial interest in a Regulation S Global Note may be transferred to a Person who takes delivery in the form of an interest in the corresponding Restricted Global Note only upon receipt by the Trustee of a written certification from the transferor to the effect that such transfer is being made (i)(a) to a Person whom the transferor reasonably believes is a Qualified Institutional Buyer in a transaction meeting the requirements of Rule 144A or (b) pursuant to another exemption from the registration requirements under the Securities Act which is accompanied by an opinion of counsel regarding the availability of such exemption and (ii) in accordance with all applicable securities laws of any state of the United States or any other jurisdiction. (g) Beneficial interests in the Restricted Global Note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the Trustee a written certificate to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if such transfer occurs prior to the expiration of the Restricted Period, the interest transferred will be held immediately thereafter through Euroclear or CEDEL. (h) Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in another Global Note shall, upon transfer, cease to be an interest in such Global Note and become an interest in such other Global Note and, accordingly, shall thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest. (i) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes. 45 -37- Section 2.15. Special Transfer Provisions. (a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Note constituting a Restricted Note to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person: (i) the Registrar shall register the transfer of any Note constituting a Restricted Note, whether or not such Note bears the Private Placement Legend, if (x) the requested transfer is after the Issue Date plus two years or such other date as such Note shall be freely transferable under Rule 144 as certified in an Officers' Certificate or (y)(1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit E hereto or (2) in the case of a transfer to a Non-U.S. Person (including a QIB), the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit F hereto; provided that in the case of a transfer of a Note bearing the Private Placement Legend for a Note not bearing the Private Placement Legend, the Registrar has received an Officers' Certificate authorizing such transfer; and (ii) if the proposed transferor is an Agent Member holding a beneficial interest in a Global Note, upon receipt by the Registrar of (x) the certificate, if any, required by paragraph (i) above and (y) instructions given in accordance with the Depository's and the Registrar's procedures, whereupon the Registrar shall reflect on its books and records the date and (if the transfer does not involve a transfer of outstanding Physical Notes) a decrease or increase, as the case may be, in the principal amount of a Global Note in an amount equal to the principal amount of the beneficial interest in a Global Note to be transferred. (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed registration of transfer of a Note constituting a Restricted Note to a QIB (excluding transfers to Non-U.S. Persons): 46 -38- (i) the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on such Holder's Note stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on such Holder's Note stating, or has otherwise advised the Company and the Registrar in writing, that it is purchasing the Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; and (ii) if the proposed transferee is an Agent Member, and the Notes to be transferred consist of Physical Notes which after transfer are to be evidenced by an interest in the Global Note, upon receipt by the Registrar of instructions given in accordance with the Depository's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note in an amount equal to the principal amount of the Physical Notes to be transferred, and the Trustee shall cancel the Physical Notes so transferred. (c) Private Placement Legend. Upon the registration of transfer, exchange or replacement of Notes not bearing the Private Placement Legend, the Registrar shall deliver Notes that do not bear the Private Placement Legend. Upon the registration of transfer, exchange or replacement of Notes bearing the Private Placement Legend, the Registrar shall deliver only Notes that bear the Private Placement Legend unless (i) it has received the Officers' Certificate required by paragraph (a)(i)(y) of this Section 2.15, (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Note has been sold pursuant to an effective registration statement under the Securities Act and the Regis- 47 -39- trar has received an Officers' Certificate from the Company to such effect. (d) General. By its acceptance of any Note bearing the Private Placement Legend, each Holder of such Note acknowledges the restrictions on transfer of such Note set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Note only as provided in this Indenture. The Registrar shall retain for a period of two years copies of all letters, notices and other written communications received pursuant to Section 2.14 or this Section 2.15. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable notice to the Registrar. Section 2.16. Computation of Interest. Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months. ARTICLE 3 REDEMPTION Section 3.01. Notices to Trustee. If the Company elects to redeem Notes pursuant to Paragraph 5 of the Notes, it shall notify the Trustee of the Redemption Date and the principal amount of Notes to be redeemed at least 30 days (unless a shorter notice shall be satisfactory to the Trustee) but not more than 60 days before the Redemption Date. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. Section 3.02. Selection by Trustee of Notes To Be Redeemed. If fewer than all of the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro rata, by lot or by any other method that the Trustee considers fair and appropriate and, if such Notes are listed on any securities exchange, by a method that complies with the requirements of such exchange. 48 -40- The Trustee shall make the selection from the Notes outstanding and not previously called for redemption and shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may select for redemption portions (equal to $1,000 or integral multiples thereof) of the principal amount of Notes that have denominations larger than $1,000. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. Section 3.03. Notice of Redemption. At least 30 days, and no more than 60 days, before a Redemption Date, the Company shall mail, or cause to be mailed, a notice of redemption by first-class mail to each Holder of Notes to be redeemed at his or her last address as the same appears on the registry books maintained by the Registrar pursuant to Section 2.03 hereof. The notice shall identify the Notes to be redeemed (including the CUSIP number(s) thereof) and shall state: (1) the Redemption Date; (2) the redemption price; (3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date and upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued; (4) the name and address of the Paying Agent; (5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (6) that, unless (a) the Company defaults in making the redemption payment or (b) such redemption payment is prohibited pursuant to Article 10 or 11 hereof or otherwise, interest on the Notes called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Notes is to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed; 49 -41- (7) the paragraph of the Notes pursuant to which the Notes called for redemption are being redeemed; and (8) if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption. At the Company's written request delivered at least 45 days prior to the Redemption Date, the Trustee shall give the notice of redemption in the Company's name and at the Company's sole expense; provided, however, that the Company shall have delivered to the Trustee, at least 30 days prior to the Redemption Date, a Company Request requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. Section 3.04. Effect of Notice of Redemption. Once the notice of redemption described in Section 3.03 is mailed, Notes called for redemption become due and payable on the Redemption Date and at the redemption price, plus interest, if any, accrued to the Redemption Date. Upon surrender to the Trustee or Paying Agent, such Notes shall be paid at the redemption price, plus accrued interest, if any, to the Redemption Date unless prohibited by Article 10 or 11, provided that if the Redemption Date is after a regular interest payment record date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Section 3.05. Deposit of Redemption Price. On or prior to 10:00 A.M., New York City time, on each Redemption Date, the Company shall deposit with the Paying Agent in immediately available funds money sufficient to pay the redemption price of and accrued interest, if any, on all Notes to be redeemed on that date other than Notes or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation. On and after any Redemption Date, if money sufficient to pay the redemption price of and accrued interest on Notes called for redemption shall have been made available in accordance with the preceding paragraph, the Notes called for redemption will cease to accrue interest and the only right of 50 -42- the Holders of such Notes will be to receive payment of the redemption price of and, subject to the first proviso in Section 3.04, accrued and unpaid interest on such Notes to the Redemption Date. If any Note called for redemption shall not be so paid, interest will be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Note and any interest not paid on such unpaid principal, in each case, at the rate and in the manner provided in the Notes. Section 3.06. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, upon the Company's written request, the Trustee shall authenticate for a Holder, at the expense of the Company, a new Note equal in principal amount to the unredeemed portion of the Note surrendered. ARTICLE 4 COVENANTS Section 4.01. Payment of Notes. The Company shall pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds, as of 10:00 A.M., New York City time on that date money designated for and sufficient to pay such installment and is not prohibited from paying such money to the Holders pursuant to the terms of this Indenture. The Company shall pay interest on overdue principal, and overdue interest, to the extent lawful, at the rate specified in the Notes. Section 4.02. SEC Reports. The Company will deliver to the Trustee within 15 days after the filing of the same with the SEC, copies of the quarterly and annual reports and of the information documents and other reports, if any, which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act. The Company will also comply with the other provisions of TIA Section 314(a). Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Ex- 51 -43- change Act, the Company will file with the SEC, to the extent permitted, and provide the Trustee and Holders of Notes with such quarterly and annual reports and such information, documents and other reports specified in Section 13 and 15(d) of the Exchange Act. In such event, the Company shall also, upon request, provide to any Holder of Notes or any prospective transferee of any such Holder any information concerning the Company (including financial statements) necessary in order to permit such Holder to sell or transfer Notes in compliance with Rule 144A under the Securities Act; provided, however, that the Company shall not be required to furnish such information in connection with any request made on or after the date which is two years from the later of (i) the date such Note (or any predecessor Note) was acquired from the Company or (ii) the date such Note (or any predecessor Note) was last acquired from an "affiliate" of the Company within the meaning of Rule 144 under the Securities Act. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). Section 4.03. Waiver of Stay, Extension or Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, and/or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 52 -44- Section 4.04. Compliance Certificate. (a) The Company shall deliver to the Trustee, within 100 days after the end of each fiscal year and on or before 50 days after the end of the first, second and third quarters of each fiscal year, an Officers' Certificate which complies with TIA Section 314(a)(4) stating that a review of the activities of the Company and its Subsidiaries during such fiscal year or fiscal quarter, as the case may be, has been made under the supervision of the signing Officers with a view to determining whether each has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge each has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all or such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action each is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.02 above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that the Company has violated any provisions of this Article 4 or Article 5 hereof of this Indenture or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly for any failure to obtain knowledge of any such violation. (c) (i) If any Default or Event of Default has occurred and is continuing or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a claimed Default under this Indenture or the Notes, the Company shall deliver to the Trustee an Officers' Certificate specifying such event, no- 53 -45- tice or other action within five Business Days of its becoming aware of such occurrence. Section 4.05. Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all taxes, assessments and governmental charges (including withholding taxes and any penalties, interest and additions to taxes) levied or imposed upon it or any of its Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of it or any of its Subsidiaries; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim if the amount, applicability or validity thereof is being contested in good faith by appropriate proceedings and an adequate reserve has been established therefor to the extent required by GAAP. Section 4.06. Maintenance of Properties and Insurance. (a) The Company shall cause all properties used or useful to the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in its judgment may be necessary, so that the business carried on in connection therewith may be properly and advantageously conducted at all times unless the failure to so maintain such properties (together with all other such failures) would not have a material adverse effect on the financial condition or results of operations of the Company and its Subsidiaries, taken as a whole; provided, however, that nothing in this Section 4.06 shall prevent the Company or any Subsidiary from discontinuing the operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is in the good faith judgment of the Board of Directors of the Company or the Subsidiary concerned, as the case may be, desirable in the conduct of the business of the Company or such Subsidiary, as the case may be, and is not disadvantageous in any material respect to the Holders. (b) The Company shall provide or cause to be provided, for itself and each of its Subsidiaries, insurance (including appropriate self-insurance) against loss or damage of 54 -46- the kinds that, in the reasonable, good faith opinion of the Company are adequate and appropriate for the conduct of the business of the Company and such Subsidiaries in a prudent manner, with reputable insurers or with the government of the United States of America or an agency or instrumentality thereof, in such amounts, with such deductibles, and by such methods as shall be customary, in the good faith judgment of the Company, for corporations similarly situated in the industry, unless the failure to provide such insurance (together with all other such failures) would not have a material adverse effect on the financial condition or results of operations of the Company and its Subsidiaries, taken as a whole. Section 4.07. Compliance with Laws. The Company shall, and shall cause each of its Subsidiaries to, comply with all applicable statutes, rules, regulations, orders and restrictions of the United States of America, all states and municipalities thereof, and of any governmental department, commission, board, regulatory authority, bureau, agency and instrumentality of the foregoing, in respect of the conduct of its businesses and the ownership of its properties, except for such noncompliances as would not in the aggregate have a material adverse effect on the business or financial condition of the Company and its Subsidiaries, taken as a whole. Section 4.08. Corporate Existence. Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each Restricted Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders. 55 -47- Section 4.09. Maintenance of Office or Agency. The Company shall maintain an office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee as set forth in Section 12.02. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company shall give prompt written notice to the Trustee of such designation or rescission and of any change in the location of any such other office or agency. The Company hereby initially designates the Corporate Trust Office of the Trustee set forth in Section 12.02 as such office of the Company. Section 4.10. Limitation on Additional Indebtedness. (a) The Company shall not, and shall not permit any Restricted Subsidiary of the Company to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness. (b) Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), if (i) after giving effect to the incurrence of such Indebtedness and the receipt and application of the proceeds thereof, the Company's Fixed Charge Coverage Ratio (determined on a pro forma basis for the last four fiscal quarters of the Company for which financial statements are available at the date of determination in accordance with the further provisions of this clause (b)) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter and (ii) no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such In- 56 -48- debtedness. For purposes of computing the Fixed Charge Coverage Ratio, (A) if the Indebtedness which is the subject of a determination under this provision is Acquired Indebtedness, or Indebtedness incurred in connection with the simultaneous acquisition (by way of merger, consolidation or otherwise) of any Person, business, property or assets (an "Acquisition"), then such ratio shall be determined by giving effect to (on a pro forma basis, as if the transaction had occurred at the beginning of the four-quarter period used to make such calculation) to both the incurrence or assumption of such Acquired Indebtedness or such other Indebtedness and the inclusion in the Company's EBITDA of the EBITDA of the acquired Person, business, property or assets, (B) if any Indebtedness outstanding or to be incurred (x) bears a floating rate of interest, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account on a pro forma basis any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term as at the date of determination in excess of 12 months), (y) bears, at the option of the Company or a Restricted Subsidiary, a fixed or floating rate of interest, the interest expense on such Indebtedness shall be computed by applying, at the option of the Company or such Restricted Subsidiary, either a fixed or floating rate and (z) was incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period, (C) for any quarter prior to July 2, 1996 included in the calculation of such ratio, such calculation shall be made on a pro forma basis, giving effect to the acquisition by the Company of Motor Wheel, the issuance of the Notes, the incurrence of Indebtedness under the Original Credit Agreement and the use of the net proceeds therefrom as if the same had occurred at the beginning of the four-quarter period used to make such calculation, (D) for any quarter included in the calculation of such ratio prior to the date that any Asset Sale was consummated, or that any Indebtedness was incurred, or that any Acquisition was effected, by the Company or any of its Subsidiaries, such calculation shall be made on a pro forma basis, giving effect to each Asset Sale, incurrence of Indebtedness or Acquisition, as the case may be, and the use of any proceeds therefrom, as if the same had occurred at the beginning of the four quarter period used to make such calculation and (E) the Fixed Charge Coverage Ratio shall not take into account Permitted Indebtedness that is incurred at the same time as Indebtedness under this paragraph. 57 -49- Section 4.11. Limitation on Foreign Indebtedness. (a) The Company shall not permit any Restricted Subsidiary of the Company which is not a Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness set forth in clauses (i) through (x) and (xii) of the definition thereof unless (i) the Indebtedness is incurred, denominated and payable in the local currencies of the jurisdictions of the operations of the Restricted Subsidiary incurring such Indebtedness or of the business or the location of assets being acquired with the proceeds of such Indebtedness; provided, however, that any Indebtedness permitted to be incurred in a Western European currency pursuant to this clause (i) may be incurred in any Western European currency; provided, further, that any Restricted Subsidiary whose operations are located in Mexico can also incur Indebtedness denominated and payable in U.S. dollars, (ii) after giving effect to the incurrence of such Indebtedness and the receipt of the application of the proceeds thereof, (A) if, as a result of the incurrence of such Indebtedness such Restricted Subsidiary will become subject to any restriction or limitation on the payment of dividends or the making of other distributions, (I) the ratio of Foreign EBITDA to Foreign Interest Expense (determined on a pro forma basis for the last four fiscal quarters for which financial statements are available at the date of determination) is greater than 3.0 to 1 and (II) the ratio of the Company's Adjusted EBITDA to Consolidated Fixed Charges (determined on a pro forma basis for the last four fiscal quarters of the Company for which financial statements are available at the date of determination) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter and (B) in any other case, the Company's Fixed Charge Coverage Ratio (determined on a pro forma basis for the last four fiscal quarters of the Company for which financial statements are available at the date of determination) is greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter, and (iii) no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness. (b) In the event that any Indebtedness incurred pursuant to clause (ii)(B) of the foregoing paragraph (a) is proposed to be amended, modified or otherwise supplemented such that the payment of dividends or the making of other distributions becomes subject in any manner to any restriction or limitation, the Company will not permit the Restricted Subsidiary 58 -50- to so amend, modify or supplement such Indebtedness unless such Indebtedness could be incurred pursuant to the terms of clause (ii)(A) of the foregoing paragraph (a). (c) All calculations required under paragraphs (a) and (b) hereof shall be made in a manner consistent with the calculations required under paragraph (b) of Section 4.10. Section 4.12. Limitation on Common Stock of Subsidiaries. The Company shall not (i) sell, pledge, hypothecate or otherwise convey or dispose of any Common Stock of a Restricted Subsidiary (other than under or in respect of the Amended Credit Agreement or under the terms of any Designated Senior Indebtedness and other than pledges of the Capital Stock of Restricted Subsidiaries that are not Guarantors securing Indebtedness of such Restricted Subsidiaries that are not Guarantors) or (ii) permit any of its Subsidiaries to issue any Common Stock, other than to the Company or a Wholly-Owned Subsidiary of the Company. The foregoing restrictions shall not apply to an Asset Sale made in compliance with Section 4.15. Section 4.13. Limitation on Restricted Payments. The Company shall not make, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless: (a) no Default or Event of Default shall have occurred and be continuing at the time of or immediately after giving effect to such Restricted Payment; (b) immediately after giving pro forma effect to such Restricted Payment, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 4.10; and (c) immediately after giving effect to such Restricted Payment, the aggregate of all Restricted Payments declared or made after July 2, 1996 does not exceed the sum of (1) $5,000,000, plus (2) 50% of the Company's Consolidated Net Income (or in the event that such Consolidated Net Income shall be a deficit, minus 100% of such deficit) after July 2, 1996, plus (3) 100% of the aggregate Net Cash Proceeds from the issue or sale, after July 2, 1996, of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Sub- 59 -51- sidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be. For purposes of determining under this clause (c) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value. The provisions of this Section 4.13 shall not prohibit (i) the payment of any distribution within 60 days after the date of declaration thereof, if at such date of declaration such payment would comply with the provisions of this Indenture, (ii) the retirement of any shares of Capital Stock of the Company or Indebtedness which is subordinated in right of payment to the Notes by conversion into, or by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of, the Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Capital Stock of the Company (other than Disqualified Capital Stock), (iii) the redemption, repayment or retirement of Indebtedness of the Company subordinated in right of payment to the Notes in exchange for, by conversion into, or out of the Net Cash Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (other than any Indebtedness owed to a Subsidiary) of the Company that is contractually subordinated in right of payment to the Notes to at least the same extent as the Indebtedness being redeemed, repaid or retired, (iv) the retirement of any shares of Disqualified Capital Stock by conversion into, or by exchange for, shares of Disqualified Capital Stock, or out of the Net Cash Proceeds of the substantially concurrent issuance or sale (other than to a Subsidiary of the Company) of other shares of Disqualified Capital Stock, or (v) the making of Investments in Unrestricted Subsidiaries and joint ventures, provided that the Net Investment therein made since July 2, 1996 shall not exceed an aggregate of $25,000,000 and (vi) the making of Investments funded with the transfer of excess fixed assets no longer necessary in the conduct of the business of the Company and its Subsidiaries in an aggregate amount not to exceed $15,000,000; provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to July 2, 1996, the amount of Net Investments made pursuant to clauses (v) and (vi) shall be included in the calculation. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' 60 -52- Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.13 were computed, which calculations may be based upon the Company's latest available financial statements, and that no Default or Event of Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any Restricted Payments. Section 4.14. Limitation on Other Senior Subordinated Debt. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any Indebtedness (other than the Notes and the Guarantees, as the case may be) that is both (i) subordinate in right of payment to any Senior Indebtedness of the Company or its Restricted Subsidiaries, as the case may be, and (ii) senior in right of payment to the Notes and the Guarantees, as the case may be. For purposes of this Section 4.14, Indebtedness is deemed to be senior in right of payment to the Notes and the Guarantees, as the case may be, if it is not explicitly subordinate in right of payment to Senior Indebtedness at least to the same extent as the Notes and the Guarantees, as the case may be, are subordinate to Senior Indebtedness. Section 4.15. Limitation on Certain Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or its Restricted Subsidiaries, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the fair market value thereof (as determined in good faith by the Company's Board of Directors, and evidenced by a Board Resolution); (ii) not less than 75% of the consideration received by the Company or its Subsidiaries, as the case may be, is in the form of cash or Temporary Cash Investments other than in the case where the Company or a Restricted Subsidiary is exchanging assets held by the Company or such Restricted Subsidiary for assets held by another Person; provided that any Investment received in such exchange would be permitted under clause (B) below; and (iii) the Asset Sale Proceeds received by the Company or such Restricted Subsidiary are applied (A) first, to the extent the Company elects, or is required, to prepay, repay or purchase any then existing Senior Indebtedness of the Company or any Restricted Subsidiary within 180 days following the receipt of the Asset Sale Proceeds from any Asset Sale, provided that any such repayment shall result in a permanent reduction of the 61 -53- commitments, if any, thereunder in an amount equal to the principal amount so repaid; (B) second, to repurchase the 11% Notes within 270 days following the receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuant to the offer to repurchase required under the terms of the 11% Notes Indenture; (C) third, to repurchase 9 1/8% Notes within 270 days following the receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuant to the offer to repurchase required under the terms of the 9 1/8% Indenture; (D) fourth, to the extent of the balance of Asset Sale Proceeds after application as described in clauses (A) and (B) above, to the extent the Company elects, to an investment in assets used or useful in businesses similar or reasonably related to the business of the Company or Restricted Subsidiary as conducted on the Issue Date (either directly or indirectly through the purchase of Capital Stock or other securities of a Person holding such assets), provided that such investment occurs or the Company or a Restricted Subsidiary enters into contractual commitments to make such investment, subject only to customary conditions (other than the obtaining of financing), on or prior to the 181st day following receipt of such Asset Sale Proceeds (the "Reinvestment Date") and Asset Sale Proceeds contractually committed are so applied within 270 days following the receipt of such Asset Sale Proceeds; and (E) fifth, if on the Reinvestment Date with respect to any Asset Sale, the Available Asset Sale Proceeds exceed $10,000,000, the Company shall apply an amount equal to such Available Asset Sale Proceeds to an offer to repurchase the Notes, at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (an "Excess Proceeds Offer"). If an Excess Proceeds Offer is not fully subscribed, the Company may retain the portion of the Available Asset Sale Proceeds not required to repurchase Notes. (b) If the Company is required to make an Excess Proceeds Offer, the Company shall mail, within 30 days following the Reinvestment Date, a notice to the Holders with a copy to the Trustee which shall include, among other things, the instructions, determined by the Company, that each Holder must follow in order to have such Notes repurchased and the calculations used in determining the amount of Available Asset Sale Proceeds to be applied to the repurchase of such Notes. The notice, which shall govern the terms of the Excess Proceeds Offer, shall also state: (1) that the Excess Proceeds Offer is being made pursuant to this Section 4.15 and that the Excess Proceeds Offer shall remain open for a period of 20 Business Days 62 -54- following its commencement or such longer period as may be required by law (the "Offer Period"); (2) that such Holders have the right to require the Company to apply the Available Asset Sale Proceeds to repurchase such Notes at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase; (3) the purchase price and the purchase date (the "Purchase Date") which shall be no earlier than 30 days and not later than 60 days from the date such notice is mailed; (4) that any Note not tendered or accepted for payment will continue to accrue interest; (5) that any Note accepted for payment pursuant to the Excess Proceeds Offer shall cease to accrue interest on and after the Purchase Date; (6) that Holders electing to have a Note purchased pursuant to any Excess Proceeds Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three Business Days before the Purchase Date; (7) that Holders will be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have the Note purchased; (8) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Available Asset Sale Proceeds, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and 63 -55- (9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, Notes or portions thereof tendered pursuant to the Excess Proceeds Offer, deposit with the Paying Agent U.S. legal tender sufficient to pay the purchase price plus accrued interest, if any, on the Notes to be purchased and deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.15. The Paying Agent shall promptly (but in any case not later than three days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Note tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon the receipt of a written request from the Company, shall authenticate and mail or make available for delivery such new Note to such Holder equal in principal amount to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Excess Proceeds Offer on the Purchase Date. If an Excess Proceeds Offer is not fully subscribed, the Company may retain that portion of the Available Asset Sale Proceeds not required to repurchase Notes. Section 4.16. Limitation on Transactions with Affiliates. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or suffer to exist any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate (including entities in which the Company or any of its Restricted Subsidiaries own a minority interest) or holder of 10% or more of the Company's Common Stock (an "Affiliate Transaction") or extend, renew, waive or otherwise modify the terms of any Affiliate Transaction entered into prior to the Issue Date unless (i) such Affiliate Transaction is between or among the Company and/or its Wholly-Owned Subsidiaries; or (ii) the terms of such Affiliate Transaction are fair and reasonable to the Company or such Restricted Subsidiary, as the case may be, and the terms of such Affiliate Transaction are at least as favorable as the terms which could be obtained 64 -56- by the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on an arm's-length basis between unaffiliated parties. In any Affiliate Transaction involving an amount or having a value in excess of $2,000,000 which is not permitted under clause (i) above, the Company must obtain a resolution of the Board of Directors certifying that such Affiliate Transaction complies with clause (ii) above. In transactions with a value in excess of $10,000,000 which are not permitted under clause (i) above, the Company or such Restricted Subsidiary must obtain a written opinion as to the fairness of such a transaction from an independent investment banking firm. (b) The foregoing provisions of this Section 4.16 will not apply to (i) any Restricted Payment that is not prohibited by Section 4.13, (ii) reasonable and customary fees paid by the Company or its Restricted Subsidiaries to their respective directors or (iii) customary investment banking, underwriting, placement agent or financial advisor fees paid in connection with services rendered to the Company or its Subsidiaries. Section 4.17. Limitations on Liens. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur or otherwise cause or suffer to exist or become effective any Liens of any kind upon any Property of the Company or any Restricted Subsidiary, now owned or hereafter acquired, which secures Indebtedness pari passu with or subordinated to the Notes unless (i) if such Lien secures Indebtedness which is pari passu with the Notes, then the Notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligation is no longer secured by a Lien or (ii) if such Lien secures Indebtedness which is subordinated to the Notes, any such Lien shall be subordinated to a Lien granted to the Holders of the Notes in the same collateral as that securing such Lien to the same extent as such subordinated Indebtedness is subordinated to the Notes. Section 4.18. Limitation on Creation of Subsidiaries. The Company shall not create or acquire, nor permit any of its Restricted Subsidiaries to create or acquire, any Subsidiary other than (i) a Restricted Subsidiary existing as of the date of this Indenture, (ii) a Restricted Subsidiary conducting a business similar or reasonably related to the 65 -57- business of the Company and its Subsidiaries as conducted on the Issue Date, or (iii) an Unrestricted Subsidiary; provided, however, that each Restricted Subsidiary which is a Domestic Subsidiary acquired or created pursuant to clause (ii) shall have executed a guarantee, satisfactory in form and substance to the Trustee (and with such documentation relating thereto as the Trustee shall require, including, without limitation, a supplement or amendment to this Indenture and opinions of counsel as to the enforceability of such guarantee), pursuant to which such Restricted Subsidiary shall become a Guarantor. Neither the Company nor any of the Guarantors will transfer any assets to a Domestic Restricted Subsidiary which is not a Guarantor unless such Restricted Subsidiary simultaneously with such transfer executes a guarantee satisfactory in form and substance to the Trustee (together with the documentation referred to in the preceding sentence) pursuant to which such Restricted Subsidiary shall become a Guarantor. Section 4.19. Payments for Consent. Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. Section 4.20. Change of Control. (a) Within 20 days of the occurrence of a Change of Control, the Company shall notify the Trustee in writing of such occurrence and shall make an offer to purchase (the "Change of Control Offer") the outstanding Notes at a purchase price equal to 101% of the principal amount thereof plus any accrued and unpaid interest thereon to the Change of Control Payment Date (such purchase price being hereinafter referred to as the "Change of Control Purchase Price") in accordance with the procedures set forth in this Section 4.20. (b) Within 20 days of the occurrence of a Change of Control, the Company also shall (i) cause a notice of the Change of Control Offer to be sent at least once to the Dow Jones News Service or similar business news service in the United States and (ii) send by first-class mail, postage pre- 66 -58- paid, to the Trustee and to each Holder of the Notes, at the address appearing in the register maintained by the Registrar of the Notes, a notice stating: (i) that the Change of Control Offer is being made pursuant to this Section 4.20 and that all Notes tendered will be accepted for payment, and otherwise subject to the terms and conditions set forth herein; (ii) the Change of Control Purchase Price and the purchase date (which shall be a Business Day no earlier than 20 business days from the date such notice is mailed (the "Change of Control Payment Date")); (iii) that any Note not tendered will continue to accrue interest; (iv) that, unless the Company defaults in the payment of the Change of Control Purchase Price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (v) that Holders accepting the offer to have their Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Change of Control Payment Date; (vi) that Holders will be entitled to withdraw their acceptance if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased; (vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, provided that each Note purchased and each such new Note issued shall be in an original principal amount in denominations of $1,000 and integral multiples thereof; 67 -59- (viii) any other procedures that a Holder must follow to accept a Change of Control Offer or effect withdrawal of such acceptance; and (ix) the name and address of the Paying Agent. On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Trustee Notes so accepted together with an Officers' Certificate stating the Notes or portions thereof tendered to the Company. The Paying Agent shall promptly mail to each Holder of Notes so accepted payment in an amount equal to the purchase price for such Notes, and the Company shall execute and issue, and the Trustee shall, upon the receipt of a written request from the Company, promptly authenticate and make available for delivery to such Holder, a new Note equal in principal amount to any unpurchased portion of the Notes surrendered; provided that each such new Note shall be issued in an original principal amount in denominations of $1,000 and integral multiples thereof. (c) If the Amended Credit Agreement is in effect, or any amounts are owing thereunder or in respect thereof, at the time of the occurrence of a Change of Control, prior to the mailing of the notice to Holders described in the preceding paragraph (b), but in any event within 30 days following any Change of Control, the Company covenants to (A) repay in full all obligations under or in respect of the Amended Credit Agreement or offer to repay in full all obligations under or in respect of the Amended Credit Agreement and repay the obligations under or in respect of the Amended Credit Agreement of each lender who has accepted such offer or (B) obtain the requisite consent under the Amended Credit Agreement to permit the repurchase of the Notes as described above. The Company must first comply with the covenant described in the preceding sentence before it shall be required to purchase Notes in the event of a Change of Control; provided that the Company's failure to comply with the covenant described in the preceding sentence constitutes an Event of Default described in Section 6.01(3) if not cured within 60 days after the notice required by that section. (d) (i) If the Company or any Subsidiary thereof has issued any outstanding (A) Indebtedness that is subordinated in right of payment to the Notes or (B) Preferred Stock, and the 68 -60- Company or such Subsidiary is required to repurchase, or make an offer to repurchase, such Indebtedness, or redeem, or make an offer to redeem, such Preferred Stock, in the event of a Change of Control or to make a distribution with respect to such subordinated Indebtedness or Preferred Stock in the event of a change of control, the Company shall not consummate any such offer or distribution with respect to such subordinated Indebtedness or Preferred Stock until such time as the Company shall have paid the Change of Control Purchase Price in full to the Holders of Notes that have accepted the Company's Change of Control Offer and shall otherwise have consummated the Change of Control Offer made to Holders of the Notes and (ii) the Company will not issue Indebtedness that is subordinated in right of payment to the Notes or Preferred Stock with change of control provisions requiring the payment of such Indebtedness or Preferred Stock prior to the payment of the Notes in the event of a Change in Control under this Indenture. In the event that a Change of Control occurs and the Holders of Notes exercise their right to require the Company to purchase Notes, if such purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act at that time, the Company will comply with the requirements of Rule 14e-1 as then in effect with respect to such repurchase. ARTICLE 5 SUCCESSOR CORPORATION Section 5.01. Limitation on Consolidation, Merger and Sale of Assets. (a) The Company shall not and shall not permit any Guarantor to consolidate with, merge with or into, or transfer all or substantially all of its assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any Person unless: (i) the Company or the Guarantor, as the case may be, shall be the continuing Person, or the Person (if other than the Company or the Guarantor) formed by such consolidation or into which the Company or the Guarantor, as the case may be, is merged or to which the properties and assets of the Company or the Guarantor, as the case may be, are transferred shall be a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of the Company or the Guarantor, as the case may be, 69 -61- under the Notes and this Indenture, and the obligations under this Indenture shall remain in full force and effect; (ii) immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (iii) immediately after giving effect to such transaction on a pro forma basis the Company or such Person could incur at least $1.00 additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10 hereof, provided that a Person that is a Guarantor may merge into the Company or another Person that is a Guarantor on the Issue Date without complying with this clause (iii). (b) In connection with any consolidation, merger or transfer of assets contemplated by this Section 5.01, the Company shall deliver or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and the supplemental indenture in respect thereto comply with this Section 5.01 and that all conditions precedent herein provided for relating to such transaction or transactions have been complied with. Section 5.02. Successor Person Substituted. Upon any consolidation or merger, or any transfer of all or substantially all of the assets of the Company or any Guarantor in accordance with Section 5.01 above, the successor corporation formed by such consolidation or into which the Company is merged or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Guarantor under this Indenture with the same effect as if such successor corporation had been named as the Company or such Guarantor herein, and thereafter the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Notes. ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default. An "Event of Default" occurs if (1) there is a default in the payment of any principal of, or premium, if any, on the Notes when the same becomes due and payable at maturity, upon acceleration, re- 70 -62- demption or otherwise, whether or not such payment is prohibited by the provisions of Article 11 hereof; (2) there is a default in the payment of any interest on any Note when the same becomes due and payable and the Default continues for a period of 30 days, whether or not such payment is prohibited by the provisions of Article 11 hereof; (3) the Company or any Guarantor defaults in the observance or performance of any other covenant in the Notes or this Indenture for 60 days after written notice from the Trustee or the Holders of not less than 25% in the aggregate principal amount of the Notes then outstanding; (4) there is a default in the payment at final maturity of principal in an aggregate amount of $10,000,000 or more with respect to any Indebtedness of the Company or any Restricted Subsidiary thereof which default shall not be cured, waived or postponed pursuant to an agreement with the holders of such Indebtedness within 60 days after written notice, or the acceleration of any such Indebtedness aggregating $10,000,000 or more which acceleration shall not be rescinded or annulled within 20 days after written notice to the Company of such Default by the Trustee or any Holder; (5) a court of competent jurisdiction enters a final judgment or judgments which can no longer be appealed for the payment of money in excess of $10,000,000 against the Company or any Restricted Subsidiary thereof and such judgment remains undischarged, for a period of 60 consecutive days during which a stay of enforcement of such judgment shall not be in effect; (6) the Company or any Restricted Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, 71 -63- (D) makes a general assignment for the benefit of its creditors, or (E) generally is not paying its debts as they become due; or (7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Restricted Subsidiary in an involuntary case, (B) appoints a Custodian of the Company or any Restricted Subsidiary or for all or substantially all of the property of the Company or any Restricted Subsidiary, or (C) orders the liquidation of the Company or any Restricted Subsidiary, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. The Trustee may withhold notice to the Holders of the Notes of any Default (except in payment of principal or premium, if any, or interest on the Notes) if the Trustee considers it to be in the best interest of the Holders of the Notes to do so. Section 6.02. Acceleration. If an Event of Default (other than an Event of Default arising under Section 6.01(6) or (7) with respect to the Company) occurs and is continuing, the Trustee by notice to the Company, or the Holders of not less than 25% in aggregate principal amount of the Notes then outstanding may by written notice to the Company and the Trustee declare to be immediately due and payable the entire principal amount of all the Notes then outstanding plus accrued but unpaid interest to the date of accelera- 72 -64- tion and (i) such amounts shall become immediately due and payable or (ii) if there are any amounts outstanding under or in respect of the Credit Agreement, such amounts shall become due and payable upon the first to occur of an acceleration under or in respect of the Credit Agreement or five Business Days after receipt by the Company and the Representative of notice of the acceleration of the Notes; provided, however, that after such acceleration but before a judgment or decree based on such acceleration is obtained by the Trustee, the Holders of a majority in aggregate principal amount of the outstanding Notes may rescind and annul such acceleration and its consequences if (i) all existing Events of Default, other than the nonpayment of accelerated principal, premium, if any, or interest that has become due solely because of the acceleration, have been cured or waived, (ii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid and (iii) if the rescission would not conflict with any judgment or decree. No such rescission shall affect any subsequent Default or impair any right consequent thereto. In case an Event of Default specified in Section 6.01(6) or (7) with respect to the Company occurs, such principal, premium, if any, and interest amount with respect to all of the Notes shall be due and payable immediately without any declaration or other act on the part of the Trustee or the Holders of the Notes. Section 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Noteholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law. Section 6.04. Waiver of Past Defaults and Events of Default. Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of a majority in principal amount of the Notes then outstanding have the right to waive any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes. Upon any such waiver, such Default shall 73 -65- cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. Section 6.05. Control by Majority. The Holders of a majority in principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee by this Indenture. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly prejudicial to the rights of another Noteholder or that may involve the Trustee in personal liability; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 6.06. Limitation on Suits. Subject to Section 6.07 below, a Noteholder may not institute any proceeding or pursue any remedy with respect to this Indenture or the Notes unless: (1) the Holder gives to the Trustee written notice of a continuing Event of Default; (2) the Holders of at least 25% in aggregate principal amount of the Notes then outstanding make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or expense to be incurred in compliance with such request; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Holders of a majority in aggregate principal amount of the Notes then outstanding. 74 -66- A Noteholder may not use this Indenture to prejudice the rights of another Noteholder or to obtain a preference or priority over another Noteholder. Section 6.07. Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, or premium, if any, and interest of the Note on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder. Section 6.08. Collection Suit by Trustee. If an Event of Default in payment of principal, premium or interest specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or the Guarantors (or any other obligor on the Notes) for the whole amount of unpaid principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate then borne by the Notes, and such further amounts as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Noteholders allowed in any judicial proceedings relative to the Company or the Guarantors (or any other obligor upon the Notes), any of their respective creditors or any of their respective property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings and any custodian in any such judicial proceeding is hereby authorized by each Noteholder to make such payments to the Trustee, and in the event that the Trustee shall consent to the 75 -67- making of such payments directly to the Noteholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Noteholder in any such proceedings. Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order: FIRST: to the Trustee for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred and all advances made, by the Trustee and the costs and expense of collection; SECOND: to Noteholders for amounts due and unpaid on the Notes for principal, premium, if any, and interest as to each, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes; and THIRD: to the Company or, to the extent the Trustee collects any amount from any Guarantor, to such Guarantor. The Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section 6.10. Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a 76 -68- suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in principal amount of the Notes then outstanding. ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the same circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (1) The duties of the Trustee shall be determined solely by the express provisions of this Indenture and the TIA and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no covenants or obligations shall be implied in this Indenture against the Trustee. (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section 7.01. 77 -69- (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Sections 6.02 and 6.05 hereof. (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any liability. The Trustee shall be under no obligation to exercise any of its rights or powers under the Indenture unless adequate indemnity satisfactory to it against such risk or liability has been assured to it. (e) Whether or not therein expressly so provided, paragraphs (a), (b), (c) and (d) of this Section 7.01 shall govern every provision of this Indenture that in any way relates to the Trustee. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company or any Guarantor. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by the law. Section 7.02. Rights of Trustee. Subject to Section 7.01 hereof: (1) The Trustee may conclusively rely on and shall be protected in acting or refraining from acting upon any document reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (2) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of Section 12.05 hereof. The Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion. 78 -70- (3) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed by it with due care. (4) The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers. (5) The Trustee may consult with counsel of its selection, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (6) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. (7) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for or otherwise deal with the Company or any Guarantor, or any Affiliates thereof, with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11 hereof. 79 -71- Section 7.04. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of the proceeds from the sale of Notes or any money paid to the Company or upon the Company's direction pursuant to the terms of this Indenture, it shall not be responsible for the use or application of money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement in the Notes other than its certificate of authentication. Section 7.05. Notice of Default. If a Default or an Event of Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Noteholder notice of the Default or the Event of Default, as the case may be, within 90 days after it occurs. Except in the case of a Default or an Event of Default in payment of the principal of, or premium, if any, or interest on any Note the Trustee may withhold the notice if and so long as the board of directors of the Trustee, the executive committee or any trust committee of such board and/or its Trust Officers in good faith determine(s) that withholding the notice is in the interests of the Noteholders. Section 7.06. Reports by Trustee to Holders. Within 60 days after May 15 of any year, commencing the May 15 following the date of this Indenture, the Trustee shall mail to each Noteholder a brief report dated as of such May 15 that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the report date, no report need be transmitted). The Trustee also shall comply with TIA Section Section 313(b) and 313(c). A copy of each report at the time of its mailing to Noteholders shall be filed with the SEC and each stock exchange, if any, on which the Notes are listed. The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange and the Trustee shall comply with TIA Section 313(d). Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time such compensation for its services as the Trustee and the Company shall from time to time agree in writing. The Trus- 80 -72- tee's compensation shall not be limited by any provision of law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, expenses and advances incurred or made by it in connection with its duties under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify each of the Trustee and any predecessor Trustee for, and hold it harmless against, any and all damages, claims, loss or liability incurred by it in connection with the acceptance or performance of its duties under this Indenture including the reasonable costs and expenses of enforcing this Indenture against the Company and the Guarantors and defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Trustee shall notify the Company promptly of any claim asserted against the Trustee for which it may seek indemnity. However, the failure by the Trustee to so notify the Company shall not relieve the Company of its obligations. Notwithstanding the foregoing, the Company and the Guarantors need not reimburse the Trustee for any expense or indemnify it against any loss or liability incurred by the Trustee through its negligence or bad faith. To secure the payment obligations of the Company and the Guarantors in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee except such money or property held in trust to pay principal of and interest on particular Notes. Such lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. For purposes of this Section 7.07, the term "Trustee" shall include any trustee appointed pursuant to Article 9. The obligation of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. Section 7.08. Replacement of Trustee. The Trustee may resign by so notifying the Company in writing. The Holders of a majority in principal amount of the 81 -73- outstanding Notes may remove the Trustee by notifying the removed Trustee in writing and may appoint a successor Trustee with the Company's written consent which consent shall not be unreasonably withheld. The Company may remove the Trustee at its election if: (1) the Trustee fails to comply with Section 7.10 hereof; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly notify each Holder of such event and shall promptly appoint a successor Trustee. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the outstanding Notes may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10 hereof, any Noteholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately following such delivery, the retiring Trustee shall, subject to its rights under Section 7.07 hereof, transfer all property held by it as Trustee to the successor Trustee (provided all sums owing to the Trustee hereunder have been paid and subject to the lien provided for in Section 7.07 hereof), the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Noteholder. 82 -74- Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the obligations of the Company and the Guarantors under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. Section 7.09. Successor Trustee by Consolidation, Merger or Conversion. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another corporation, subject to Section 7.10 hereof, the successor corporation without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5) in every respect. The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b), including the provision in Section 310(b)(1). Section 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311 (b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. Section 7.12. Paying Agents. The Company shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.12: (A) that it will hold all sums held by it as agent for the payment of principal of, or premium, if any, or interest on, the Notes (whether such sums have been paid to it by the Company or by any obligor on the Notes) in trust for the benefit of Holders of the Notes or the Trustee; (B) that it will at any time during the continuance of any Event of Default, upon written request from the 83 -75- Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and (C) that it will give the Trustee written notice within three (3) Business Days of any failure of the Company (or by any obligor on the Notes) in the payment of any installment of the principal of, premium, if any, or interest on, the Notes when the same shall be due and payable. ARTICLE 8 AMENDMENTS, SUPPLEMENTS AND WAIVERS Section 8.01. Without Consent of Holders. The Company and the Guarantors, when authorized by a Board Resolution of each of them, and the Trustee may amend or supplement this Indenture or the Notes without notice to or consent of any Noteholder: (1) to comply with Section 5.01 hereof; (2) to provide for uncertificated Notes in addition to or in place of certificated Notes; (3) to comply with any requirements of the SEC under the TIA; (4) to cure any ambiguity, defect or inconsistency, or to make any other change that does not materially and adversely affect the rights of any Noteholder; or (5) to make any other change that does not, in the opinion of the Trustee, adversely affect in any material respect the rights of any Noteholders hereunder. The Trustee is hereby authorized to join with the Company and the Guarantors in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects its own rights, duties or immunities under this Indenture. 84 -76- Section 8.02. With Consent of Holders. The Company, the Guarantors, when authorized by a Board Resolution of each of them, and the Trustee may amend or supplement this Indenture or the Notes with the written consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes without notice to any Noteholder. The Holders of not less than a majority in aggregate principal amount of the outstanding Notes may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes without notice to any Noteholder. Subject to Section 8.04, without the consent of each Noteholder affected, however, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04, may not: (1) reduce the amount of Notes whose Holders must consent to an amendment, supplement or waiver to this Indenture or the Notes; (2) reduce the rate of or change the time for payment of interest on any Note; (3) reduce the principal of or premium on or change the stated maturity of any Note; (4) make any Note payable in money other than that stated in the Note or change the place of payment from New York, New York; (5) change the amount or time of any payment required by the Notes or reduce the premium payable upon any redemption of the Notes in accordance with Paragraph 6 of the Notes, or change the time before which no such redemption may be made; (6) waive a default in the payment of the principal of, or interest on, or redemption payment with respect to, any Note; (7) make any changes in Sections 6.04 or 6.07 hereof or this sentence of Section 8.02; or (8) affect the ranking of the Notes or the Guarantees in a manner adverse to the Holders. After an amendment, supplement or waiver under this Section 8.02 becomes effective, the Company shall mail to the 85 -77- Holders a notice briefly describing the amendment, supplement or waiver. Upon the request of the Company, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the consent of the Noteholders as aforesaid and upon receipt by the Trustee of the documents described in Section 8.06 hereof, the Trustee shall join with the Company and the Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. Section 8.03. Compliance with Trust Indenture Act. Every amendment to or supplement of this Indenture or the Notes shall comply with the TIA as then in effect. Section 8.04. Revocation and Effect of Consents. Until an amendment, supplement, waiver or other action becomes effective, a consent to it by a Holder of a Note is a continuing consent conclusive and binding upon such Holder and every subsequent Holder of the same Note or portion thereof, and of any Note issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Note. Any such Holder or subsequent Holder, however, may revoke the consent as to his Note or portion of a Note, if the Trustee receives the notice of revocation before the date the amendment, supplement, waiver or other action becomes effective. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver which record date shall be at least 30 days prior to the first solicitation of such consent. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amend- 86 -78- ment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date. After an amendment, supplement, waiver or other action becomes effective, it shall bind every Noteholder, unless it makes a change described in any of clauses (1) through (8) of Section 8.02 hereof. In that case the amendment, supplement, waiver or other action shall bind each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder. Section 8.05. Notation on or Exchange of Notes. If an amendment, supplement, or waiver changes the terms of a Note, the Trustee may request the Holder of the Note to deliver it to the Trustee. In such case, the Trustee shall place an appropriate notation on the Note about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new security that reflects the changed terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment supplement or waiver. Section 8.06. Trustee To Sign Amendments, etc. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 8 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, supplement or waiver the Trustee shall be entitled to receive and, subject to Section 7.01 hereof, shall be fully protected in relying upon an Officers' Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company and the Guarantors in accordance with its terms. The Company or any Guarantor may not 87 -79- sign an amendment or supplement until the Board of Directors of the Company or such Guarantor, as appropriate, approves it. ARTICLE 9 DISCHARGE OF INDENTURE; DEFEASANCE Section 9.01. Discharge of Indenture. The Company and the Guarantors may terminate their obligations under the Notes, the Guarantees and this Indenture, except the obligations referred to in the last paragraph of this Section 9.01, if there shall have been cancelled by the Trustee or delivered to the Trustee for cancellation all Notes theretofore authenticated and delivered (other than any Notes that are asserted to have been destroyed, lost or stolen and that shall have been replaced as provided in Section 2.07 hereof) and the Company has paid all sums payable by it hereunder or deposited all required sums with the Trustee. After such delivery the Trustee upon request shall acknowledge in writing the discharge of the Company's and the Guarantors' obligations under the Notes, the Guarantees and this Indenture except for those surviving obligations specified below. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company in Sections 7.07, 9.05 and 9.06 hereof shall survive. Section 9.02. Legal Defeasance. The Company may at its option, by Board Resolution, be discharged from its obligations with respect to the Notes and the Guarantors discharged from their obligations under the Guarantees on the date the conditions set forth in Section 9.04 below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Notes and to have satisfied all its other obligations under such Notes and this Indenture insofar as such Notes are concerned (and the Trustee, at the expense of the Company, shall, subject to Section 9.06 hereof, execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of outstanding Notes to receive solely from the trust funds described in Section 9.04 hereof and as more fully set forth in such Section, 88 -80- payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due, (B) the Company's obligations with respect to such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 4.09 hereof, (C) the rights, powers, trusts, duties, and immunities of the Trustee hereunder (including claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof) and (D) this Article 9. Subject to compliance with this Article 9, the Company may exercise its option under this Section 9.02 with respect to the Notes notwithstanding the prior exercise of its option under Section 9.03 below with respect to the Notes. Section 9.03. Covenant Defeasance. At the option of the Company, pursuant to a Board Resolution, the Company and the Guarantors shall be released from their respective obligations under Sections 4.02 through 4.08 and Sections 4.10 through 4.20 hereof, inclusive, and clause (a)(iii) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 9.04 hereof are satisfied (hereinafter, "Covenant Defeasance"). For this purpose, such Covenant Defeasance means that the Company and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section or portion thereof, whether directly or indirectly by reason of any reference elsewhere herein to any such specified Section or portion thereof or by reason of any reference in any such specified Section or portion thereof to any other provision herein or in any other document, but the remainder of this Indenture and the Notes shall be unaffected thereby. Section 9.04. Conditions to Defeasance or Covenant Defeasance. The following shall be the conditions to application of Section 9.02 or Section 9.03 hereof to the outstanding Notes: (1) the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 7.10 hereof who shall agree to comply with the provisions of this Article 9 applicable to it) as funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Notes, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment 89 -81- of principal and interest in respect thereof in accordance with their terms will provide, not later than the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally-recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of, premium, if any, and accrued interest on the outstanding Notes at the maturity date of such principal, premium, if any, or interest, or on dates for payment and redemption of such principal, premium, if any, and interest selected in accordance with the terms of this Indenture and of the Notes; (2) no Event of Default or Default with respect to the Notes shall have occurred and be continuing on the date of such deposit, or shall have occurred and be continuing at any time during the period ending on the 91st day after the date of such deposit or, if longer, ending on the day following the expiration of the longest preference period under any Bankruptcy Law applicable to the Company in respect of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period); (3) such Legal Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest for purposes of the TIA with respect to any securities of the Company; (4) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute default under any other agreement or instrument to which the Company is a party or by which it is bound; (5) the Company shall have delivered to the Trustee an Opinion of Counsel stating that, as a result of such Legal Defeasance or Covenant Defeasance, neither the trust nor the Trustee will be required to register as an investment company under the Investment Company Act of 1940, as amended; (6) in the case of an election under Section 9.02 above, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the effect that or (ii) there 90 -82- has been a change in any applicable Federal income tax law with the effect that, and such opinion shall confirm that, the Holders of the outstanding Notes or persons in their positions will not recognize income, gain or loss for Federal income tax purposes solely as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner, including as a result of prepayment, and at the same times as would have been the case if such Legal Defeasance had not occurred; (7) in the case of an election under Section 9.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the outstanding Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (8) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to either the Legal Defeasance under Section 9.02 above or the Covenant Defeasance under Section 9.03 hereof (as the case may be) have been complied with; (9) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit under clause (1) was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and (10) the Company shall have paid or duly provided for payment under terms mutually satisfactory to the Company and the Trustee all amounts then due to the Trustee pursuant to Section 7.07 hereof. Section 9.05. Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions. All money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 9.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent as the Trus- 91 -83- tee may determine, to the Holders of such Notes, of all sums due and to become due thereon in respect of principal, premium, if any, and accrued interest, but such money need not be segregated from other funds except to the extent required by law. The Company and the Guarantors shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 9.04 hereof or the principal, premium, if any, and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article 9 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 9.04 hereof which, in the opinion of a nationally-recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, is or are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Section 9.06. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and each Guarantor's obligations under this Indenture, the Notes and the Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article 9 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 9.01 hereof; provided, however, that if the Company or the Guarantors have made any payment of principal of, premium, if any, or accrued interest on any Notes because of the reinstatement of their obligations, the Company or the Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. Section 9.07. Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under 92 -84- the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee, or if sufficient moneys have been deposited pursuant to Section 9.01 hereof, to the Company (or, if such moneys had been deposited by the Guarantors, to such Guarantors), and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. Section 9.08. Moneys Held by Trustee. Any moneys deposited with the Trustee or any Paying Agent or then held by the Company or the Guarantors in trust for the payment of the principal of, or premium, if any, or interest on any Note that are not applied but remain unclaimed by the Holder of such Note for two years after the date upon which the principal of, or premium, if any, or interest on such Note shall have respectively become due and payable shall be repaid to the Company (or, if appropriate, the Guarantors) upon Company Request, or if such moneys are then held by the Company or the Guarantors in trust, such moneys shall be released from such trust; and the Holder of such Note entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company and the Guarantors for the payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or any such Paying Agent, before being required to make any such repayment, may, at the expense of the Company and the Guarantors, either mail to each Noteholder affected, at the address shown in the register of the Notes maintained by the Registrar pursuant to Section 2.03 hereof, or cause to be published once a week for two successive weeks, in a newspaper published in the English language, customarily published each Business Day and of general circulation in the City of New York, New York, a notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such moneys then remaining will be repaid to the Company. After payment to the Company or the Guarantors or the release of any money held in trust by the Company or any Guarantors, as the case may be, Noteholders entitled to the money must look only to the Company and the Guarantors for payment as general creditors unless applicable abandoned property law designates another person. 93 -85- ARTICLE 10 GUARANTEE OF NOTES Section 10.01. Guarantee. Subject to the provisions of this Article 10, each Guarantor hereby jointly and severally unconditionally guarantees to each Holder and to the Trustee, on behalf of the Holders, (i) the due and punctual payment of the principal of, and premium, if any, and interest on each Note, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of, and premium, if any, and interest on the Notes, to the extent lawful, and the due and punctual performance of all other Obligations of the Company to the Holders or the Trustee all in accordance with the terms of such Note and this Indenture, and (ii) in the case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise. Each Guarantor hereby agrees that its obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any such Note or this Indenture, any failure to enforce the provisions of any such Note or this Indenture, any waiver, modification or indulgence granted to the Company with respect thereto by the Holder of such Note or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or such Guarantor. Each Guarantor hereby waives diligence, presentment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any such Note or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to any such Note except by payment in full of the principal thereof, premium if any, and interest thereon and as provided in Section 9.01 hereof. Each Guarantor further agrees that, as between such Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (ii) in the event of any declaration of accelera 94 -86- - -tion of such Obligations as provided in Article 6 hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Guarantee. In addition, without limiting the foregoing provisions, upon the effectiveness of an acceleration under Article 6 hereof, the Trustee shall promptly make a demand for payment on the Notes under the Guarantee provided for in this Article 10 and not discharged. The Guarantee set forth in this Section 10.01 shall not be valid or become obligatory for any purpose with respect to a Note until the certificate of authentication on such Note shall have been signed by or on behalf of the Trustee. Section 10.02. Execution and Delivery of Guarantees. To evidence the Guarantee set forth in this Article 10, each Guarantor hereby agrees that a notation of such Guarantee shall be placed on each Note authenticated and made available for delivery by the Trustee and that this Guarantee shall be executed on behalf of each Guarantor by the manual or facsimile signature of an Officer of each Guarantor. Each Guarantor hereby agrees that the Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. If an Officer of a Guarantor whose signature is on the Guarantee no longer holds that office at the time the Trustee authenticates the Note on which the Guarantee is endorsed, the Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of each Guarantor. Section 10.03. Limitation of Guarantee. The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, without limitation, any guarantees of Senior Indebtedness) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under this Indenture, result in 95 -87- the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Guarantor that makes a payment or distribution under a Guarantee shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. Section 10.04. Additional Guarantors. The Company covenants and agrees that it will cause any Person which becomes obligated to guarantee the Notes, pursuant to the terms of Section 4.18 hereof, to execute a guarantee satisfactory in form and substance to the Trustee pursuant to which such Restricted Subsidiary shall guarantee the obligations of the Company under the Notes and this Indenture in accordance with this Article 10 with the same effect and to the same extent as if such Person had been named herein as a Guarantor. Section 10.05. Release of Guarantor. A Guarantor shall be released from all of its obligations under its Guarantee if: (i) the Guarantor has sold all or substantially all of its assets or the Company and its Restricted Subsidiaries have sold all of the Capital Stock of the Guarantor owned by them, in each case in a transaction in compliance with Sections 4.15 and 5.01 hereof; or (ii) the Guarantor merges with or into or consolidates with, or transfers all or substantially all of its assets to, the Company or another Guarantor in a transaction in compliance with Section 5.01 hereof; and in each such case, the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to such transactions have been complied with. Section 10.06. Guarantee Obligations Subordinated to Guarantor Senior Indebtedness. Each Guarantor covenants and agrees, and each Holder of Notes, by its acceptance thereof, likewise covenants and agrees, that to the extent and in the manner hereinafter set forth in this Article 10, the Indebtedness represented by the Guarantee and the payment of the principal of, premium, if any, 96 -88- and interest on the Notes pursuant to the Guarantee by such Guarantor are hereby expressly made subordinate and subject in right of payment as provided in this Article 10 to the prior payment in full in cash or Cash Equivalents or, as acceptable to the holders of Guarantor Senior Indebtedness of such Guarantor, in any other manner, of all Guarantor Senior Indebtedness of such Guarantor. This Section 10.06 and the following Sections 10.07 through 10.11 shall constitute a continuing offer to all Persons who, in reliance upon such provisions, become holders of or continue to hold Guarantor Senior Indebtedness of any Guarantor; and such provisions are made for the benefit of the holders of Guarantor Senior Indebtedness of each Guarantor; and such holders are made obligees hereunder and they or each of them may enforce such provisions. Section 10.07. Payment Over of Proceeds upon Dissolution, etc., of a Guarantor. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to any Guarantor or to its creditors, as such, or to its assets, whether voluntary or involuntary, or (b) any liquidation, dissolution or other winding-up of any Guarantor, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (c) any general assignment for the benefit of creditors or any other marshaling of assets or liabilities of any Guarantor, then and in any such event: (1) the holders of all Guarantor Senior Indebtedness of such Guarantor shall be entitled to receive payment in full in cash or Cash Equivalents or, as acceptable to the holders of such Guarantor Senior Indebtedness, in any other manner, of all amounts due on or in respect of all such Guarantor Senior Indebtedness, or provision shall be made for such payment, before the Holders of the Notes are entitled to receive, pursuant to the Guarantee of such Guarantor, any payment or distribution of any kind or character by such Guarantor on account of any of its Obligations on its Guarantee; and (2) any payment or distribution of assets of such Guarantor of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the Holders or the Trustee would be entitled but for the subordination provisions of this Article 10 shall be paid by 97 -89- the liquidating trustee or agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Guarantor Senior Indebtedness of such Guarantor or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Guarantor Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Guarantor Senior Indebtedness held or represented by each, to the extent necessary to make payment in full in cash, Cash Equivalents or, as acceptable to the Holders of such Guarantor Senior Indebtedness of such Guarantor, in any other manner, of all such Guarantor Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Guarantor Senior Indebtedness; and (3) in the event that, notwithstanding the foregoing provisions of this Section 10.07, the Trustee or the Holder of any Note shall have received any payment or distribution of assets of such Guarantor of any kind or character, whether in cash, property or securities, including, without limitation, by way of set-off or otherwise, in respect of any of its Obligations on its Guarantee before all Guarantor Senior Indebtedness of such Guarantor is paid in full or payment thereof provided for, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of such Guarantor for application to the payment of all such Guarantor Senior Indebtedness remaining unpaid, to the extent necessary to pay all of such Guarantor Senior Indebtedness in full in cash, Cash Equivalents or, as acceptable to the holders of such Guarantor Senior Indebtedness, any other manner, after giving effect to any concurrent payment or distribution to or for the holders of such Guarantor Senior Indebtedness. The consolidation of a Guarantor with, or the merger of a Guarantor with or into, another Person or the liquidation or dissolution of a Guarantor following the conveyance, transfer or lease of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article 5 hereof shall not be deemed a dissolution, winding-up, liquidation, reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of 98 -90- such Guarantor for the purposes of this Article 10 if the Person formed by such consolidation or the surviving entity of such merger or the Person which acquires by conveyance, transfer or lease such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions set forth in such Article 5 hereof. Section 10.08. Suspension of Guarantee Obligations When Guarantor Senior Indebtedness in Default. (a) Unless Section 10.07 hereof shall be applicable, after the occurrence of a Payment Default with respect to any Designated Senior Indebtedness which constitutes Guarantor Senior Indebtedness, no payment or distribution of any assets or securities of a Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor) of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of such Guarantor being subordinated to its Obligations on its Guarantee) may be made by or on behalf of such Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor), including, without limitation, by way of set-off or otherwise, for or on account of its Obligations on its Guarantee, and neither the Trustee nor any holder or owner of any Notes shall take or receive from any Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor), directly or indirectly in any manner, payment in respect of all or any portion of its Obligations on its Guarantee following the delivery by the representative of the holders of , for so long as there shall exist any Designated Senior Indebtedness under or in respect of the Credit Agreement, the holders of Designated Senior Indebtedness under or in respect of the Credit Agreement or, thereafter, the holders of Designated Senior Indebtedness which constitutes Guarantor Senior Indebtedness (in either such case, the "Guarantor Representative") to the Trustee of written notice of (i) the occurrence of a Payment Default on Designated Senior Indebtedness or (ii) the occurrence of a Non-Payment Event of Default on such Designated Senior Indebtedness and the acceleration of the maturity of Designated Senior Indebtedness in accordance with its terms, and in any such event, such prohibition shall continue until such Payment Default is cured, waived in writing or ceases to exist or such acceleration has been rescinded or otherwise cured. At such time as the prohibition set forth in the preceding sentence shall no longer be in effect, subject to the provisions of the following paragraph (b), such Guarantor shall 99 -91- resume making any and all required payments in respect of its Obligations under its Guarantee. (b) Unless Section 10.07 hereof shall be applicable, upon the occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness guaranteed by a Guarantor (which guarantee constitutes Guarantor Senior Indebtedness of such Guarantor), no payment or distribution of any assets of such Guarantor of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of such Guarantor being subordinated to its Obligations on its Guarantee) shall be made by such Guarantor, including, without limitation, by way of set-off or otherwise, on account of any of its Obligations on its Guarantee, and neither the Trustee nor any holder or owner of any Notes shall take or receive from any Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor), directly or indirectly in any manner, payment in respect of all or any portion of its Obligations on its Guarantee for a period (the "Guarantee Payment Blockage Period") commencing on the date of receipt by the Trustee of written notice from the Guarantor Representative of such Non-Payment Event of Default, unless and until (subject to any blockage of payments that may then be in effect under the preceding paragraph (a)) the earliest to occur of the following events: (x) more than 179 days shall have elapsed since the date of receipt of such written notice by the Trustee, (y) such Non-Payment Event of Default shall have been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness shall have been discharged or paid in full in cash or Cash Equivalents or (z) such Guarantee Payment Blockage Period shall have been terminated by written notice to such Guarantor or the Trustee from the Guarantor Representative initiating such Guarantee Payment Blockage Period, or the holders of at least a majority in principal amount of such issue of Designated Senior Indebtedness, after which, in the case of clause (x), (y) or (z), such Guarantor shall resume making any and all required payments in respect of its Obligations on its Guarantee. Notwithstanding any other provisions of this Indenture, no Non-Payment Event of Default with respect to Designated Senior Indebtedness which existed or was continuing on the date of the commencement of any Guarantee Payment Blockage Period initiated by the Guarantor Representative shall be, or be made, the basis for the commencement of a second Guarantee Payment Blockage Period initiated by the Guarantor Representative unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days. In no event shall a Guarantee Payment Blockage Period extend beyond 179 days from the date of the receipt by the Trustee of the notice referred to in this Section 10.08(b) or, in the event of a Non-Payment Event of Default which formed the basis for a Payment Blockage Period under Section 11.03(b) hereof, 179 100 -92- days from the date of the receipt by the Trustee of the notice referred to in Section 11.03(b) (the "Initial Guarantee Blockage Period"). Any number of additional Guarantee Payment Blockage Periods may be commenced during the Initial Guarantee Blockage Period; provided, however, that no such additional Guarantee Payment Blockage Period shall extend beyond the Initial Guarantee Blockage Period. After the expiration of the Initial Guarantee Blockage Period, no Guarantee Payment Blockage Period may be commenced under this Section 10.08(b) and no Payment Blockage Period may be commenced under Section 11.03(b) hereof until at least 180 consecutive days have elapsed from the last day of the Initial Guarantee Blockage Period. (c) In the event that, notwithstanding the foregoing, the Trustee or the Holder of any Note shall have received any payment from a Guarantor prohibited by the foregoing provisions of this Section 10.08, then and in such event such payment shall be paid over and delivered forthwith to the Guarantor Representative initiating the Guarantee Payment Blockage Period, in trust for distribution to the holders of Guarantor Senior Indebtedness or, if no amounts are then due in respect of Guarantor Senior Indebtedness, promptly returned to the Guarantor, or as a court of competent jurisdiction shall direct. Section 10.09. Subrogation to Rights of Holders of Guarantor Senior Indebtedness. Upon the payment in full of all amounts payable under or in respect of all Guarantor Senior Indebtedness of a Guarantor, the Holders shall be subrogated to the rights of the holders of such Guarantor Senior Indebtedness to receive payments and distributions of cash, property and securities of such Guarantor made on such Guarantor Senior Indebtedness until all amounts due to be paid under the Guarantee shall be paid in full. For the purposes of such subrogation, no payments or distributions to holders of Guarantor Senior Indebtedness of any cash, property or securities to which Holders of the Notes or the Trustee would be entitled except for the provisions of this Article 10, and no payments over pursuant to the provisions of this Article 10 to holders of Guarantor Senior Indebtedness by Holders of the Notes or the Trustee, shall, as among each Guarantor, its creditors other than holders of Guarantor Senior Indebtedness and the Holders of the Notes, be deemed to 101 -93- be a payment or distribution by such Guarantor to or on account of such Guarantor Senior Indebtedness. If any payment or distribution to which the Holders would otherwise have been entitled but for the provisions of this Article 10 shall have been applied, pursuant to the provisions of this Article 10, to the payment of all amounts payable under Guarantor Senior Indebtedness, then and in such case, the Holders shall be entitled to receive from the holders of such Guarantor Senior Indebtedness at the time outstanding any payments or distributions received by such holders of Guarantor Senior Indebtedness in excess of the amount sufficient to pay all amounts payable under or in respect of such Guarantor Senior Indebtedness in full in cash or Cash Equivalents. Section 10.10. Guarantee Subordination Provisions Solely To Define Relative Rights. The subordination provisions of this Article 10 are and are intended solely for the purpose of defining the relative rights of the Holders of the Notes on the one hand and the holders of Guarantor Senior Indebtedness on the other hand. Nothing contained in this Article 10 or elsewhere in this Indenture or in the Notes is intended to or shall (a) impair, as among each Guarantor, its creditors other than holders of its Guarantor Senior Indebtedness and the Holders of the Notes, the obligation of such Guarantor, which is absolute and unconditional, to make payments to the Holders in respect of its Obligations on its Guarantee in accordance with its terms; or (b) affect the relative rights against such Guarantor of the Holders of the Notes and creditors of such Guarantor other than the holders of the Guarantor Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Note from exercising all remedies otherwise permitted by applicable law upon a Default or an Event of Default under this Indenture, subject to the rights, if any, under this Article 10 of the holders of Guarantor Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or other winding-up, assignment for the benefit of creditors or other marshaling of assets and liabilities of the Company referred to in Section 10.07 hereof, to receive, pursuant to and in accordance with such Section, cash, property and securities otherwise payable or deliverable to the Trustee or such Holder, or (2) under the conditions specified in Section 10.08 hereof, to prevent any payment prohibited by such Section or enforce their rights pursuant to Section 10.08(c) hereof. The failure by any Guarantor to make a payment in respect of its obligations on its Guarantee by reason of any pro- 102 -94- vision of this Article 10 shall not be construed as preventing the occurrence of a Default or an Event of Default hereunder. Section 10.11. Application of Certain Article 11 Provisions. The provisions of Sections 11.04, 11.07, 11.08, 11.09, 11.10, 11.12 and 11.13 hereof shall apply, mutatis mutandis, to each Guarantor and their respective holders of Guarantor Senior Indebtedness and the rights, duties and obligations set forth therein shall govern the rights, duties and obligations of each Guarantor, the holders of Guarantor Senior Indebtedness, the Holders and the Trustee with respect to the Guarantee and all references therein to Article 11 hereof shall mean this Article 10. ARTICLE 11 SUBORDINATION OF NOTES Section 11.01. Notes Subordinate to Senior Indebtedness. The Company covenants and agrees, and each Holder of Notes, by its acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 11, the Indebtedness represented by the Notes and the payment of the principal of, premium, if any, and interest on the Notes are hereby expressly made subordinate and subject in right of payment as provided in this Article 11 to the prior payment in full in cash or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in any other manner, of all Senior Indebtedness. This Article 11 shall constitute a continuing offer to all Persons who, in reliance upon such provisions, become holders of or continue to hold Senior Indebtedness; and such provisions are made for the benefit of the holders of Senior Indebtedness; and such holders are made obligees hereunder and they or each of them may enforce such provisions. Section 11.02. Payment Over of Proceeds upon Dissolution, etc. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its 103 -95- assets, whether voluntary or involuntary or (b) any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any general assignment for the benefit of creditors or any other marshaling of assets or liabilities of the Company, then and in any such event: (1) the holders of Senior Indebtedness shall be entitled to receive payment in full in cash or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in any other manner, of all amounts due on or in respect of all Senior Indebtedness, or provision shall be made for such payment, before the Holders of the Notes are entitled to receive any payment or distribution of any kind or character on account of principal of, premium, if any, or interest on the Notes; and (2) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the Holders or the Trustee would be entitled but for the provisions of this Article 11 shall be paid by the liquidating trustee or agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full in cash, Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in any other manner, of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor, to the holders of such Senior Indebtedness; and (3) in the event that, notwithstanding the foregoing provisions of this Section 11.02, the Trustee or the Holder of any Note shall have received any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including, without limitation, by way of set-off or otherwise, in respect of principal of, premium, if any, and interest on the Notes before all Senior Indebtedness is paid in full or payment thereof provided for, then and in such event such payment or distribution shall be paid over or deliv- 104 -96- ered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full in cash, Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, any other manner, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of Senior Indebtedness. The consolidation of the Company with, or the merger of the Company with or into, another Person or the liquidation or dissolution of the Company following the conveyance, transfer or lease of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article 5 hereof shall not be deemed a dissolution, winding-up, liquidation, reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of the Company for the purposes of this Article 11 if the Person formed by such consolidation or the surviving entity of such merger or the Person which acquires by conveyance, transfer or lease such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions set forth in such Article 5 hereof. Section 11.03. Suspension of Payment When Senior Indebtedness in Default. (a) Unless Section 11.02 hereof shall be applicable, after the occurrence of a Payment Default no payment or distribution of any assets or securities of the Company or any Restricted Subsidiary of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes by the Company) may be made by or on behalf of the Company or any Restricted Subsidiary, including, without limitation, by way of set-off or otherwise, for or on account of principal of, premium, if any, or interest on the Notes, or for or on account of the purchase, redemption or other acquisition of the Notes, and neither the Trustee nor any holder or owner of any Notes shall take or receive from the Company or any Restricted Subsidiary, directly or indirectly in any manner, payment in respect of all or any portion of Notes following the delivery by the representative of , for so long as there shall exist any Designated Senior Indebtedness under 105 -97- or in respect of the Credit Agreement, the holders of Designated Senior Indebtedness under or in respect of the Credit Agreement or, thereafter, the holders of Designated Senior Indebtedness (in either such case, the "Representative") to the Trustee of written notice of (i) the occurrence of a Payment Default or Designated Senior Indebtedness or (ii) the occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness and the acceleration of the maturity of Designated Senior Indebtedness in accordance with its terms, and in any such event, such prohibition shall continue until such Payment Default is cured, waived in writing or ceases to exist or such acceleration has been rescinded or otherwise cured. At such time as the prohibition set forth in the preceding sentence shall no longer be in effect, subject to the provisions of the following paragraph (b), the Company shall resume making any and all required payments in respect of the Notes, including any missed payments. (b) Unless Section 11.02 hereof shall be applicable, upon the occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness, no payment or distribution of any assets or securities of the Company of any kind or character (including, without limitation, cash, property and any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes by the Company) shall be made by or on behalf of the Company, including, without limitation, by way of set-off or otherwise, on account of any principal of, premium, if any, or interest on the Notes or on account of the purchase, redemption, defeasance or other acquisition of Notes, and neither the Trustee nor any holder or owner of any Notes shall take or receive from the Company, directly or indirectly in any manner, payment in respect of all or any portion of the Notes, for a period ("Payment Blockage Period") commencing on the date of receipt by the Trustee of written notice from the Representative of such Non-Payment Event of Default unless and until (subject to any blockage of payments that may then be in effect under the preceding paragraph (a)) the earliest to occur of the following events: (x) more than 179 days shall have elapsed since the date of receipt of such written notice by the Trustee, (y) such Non-Payment Event of Default shall have been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness shall have been discharged or paid in full in cash or Cash Equivalents or (z) such Payment Blockage Period shall have been terminated by written notice to the Company or the Trustee from the Representative initiating such Payment Blockage Period, or the holders of at least a majority in principal 106 -98- amount of such issue of Designated Senior Indebtedness, after which, in the case of clause (x), (y) or (z), the Company shall resume making any and all required payments in respect of the Notes, including any missed payments. Notwithstanding any other provisions of this Indenture, no Non-Payment Event of Default with respect to Designated Senior Indebtedness which existed or was continuing on the date of the commencement of any Payment Blockage Period initiated by the Representative shall be, or be made, the basis for the commencement of a second Payment Blockage Period initiated by the Representative unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days. In no event shall a Payment Blockage Period extend beyond 179 days from the date of the receipt by the Trustee of the notice referred to in this Section 11.03(b) (the "Initial Blockage Period"). Any number of additional Payment Blockage Periods may be commenced during the Initial Blockage Period; provided, however, that no such additional Payment Blockage Period shall extend beyond the Initial Blockage Period. After the expiration of the Initial Blockage Period, no Payment Blockage Period may be commenced under this Section 11.03(b) and no Guarantee Payment Blockage Period may be commenced under Section 10.08(b) hereof until at least 180 consecutive days have elapsed from the last day of the Initial Blockage Period. (c) In the event that, notwithstanding the foregoing, the Trustee or the Holder of any Note shall have received any payment prohibited by the foregoing provisions of this Section 11.03, then and in such event such payment shall be paid over and delivered forthwith to the Representative initiating the Payment Blockage Period, in trust for distribution to the holders of Senior Indebtedness or, if no amounts are then due in respect of Senior Indebtedness, promptly returned to the Company, or otherwise as a court of competent jurisdiction shall direct. Section 11.04. Trustee's Relation to Senior Indebtedness. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 11, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall not be liable to any holder of Senior Indebtedness if it shall mistakenly pay over or de- 107 -99- liver to Holders, the Company or any other Person moneys or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this Article 11 or otherwise. Section 11.05. Subrogation to Rights of Holders of Senior Indebtedness. Upon the payment in full of all Senior Indebtedness, the Holders of the Notes shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of, premium, if any and interest on the Notes shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the Holders of the Notes or the Trustee would be entitled except for the provisions of this Article 11, and no payments over pursuant to the provisions of this Article 11 to the holders of Senior Indebtedness by Holders of the Notes or the Trustee, shall, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Notes, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness. If any payment or distribution to which the Holders would otherwise have been entitled but for the provisions of this Article 11 shall have been applied, pursuant to the provisions of this Article 11, to the payment of all amounts payable under the Senior Indebtedness of the Company, then and in such case the Holders shall be entitled to receive from the holders of such Senior Indebtedness at the time outstanding any payments or distributions received by such holders of such Senior Indebtedness in excess of the amount sufficient to pay all amounts payable under or in respect of such Senior Indebtedness in full in cash or Cash Equivalents. Section 11.06. Provisions Solely To Define Relative Rights. The provisions of this Article 11 are and are intended solely for the purpose of defining the relative rights of the Holders of the Notes on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Notes is intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Notes, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Notes 108 -100- the principal of, premium, if any, and interest on the Notes as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the Holders of the Notes and creditors of the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Note from exercising all remedies otherwise permitted by applicable law upon a Default or an Event of Default under this Indenture, subject to the rights, if any, under this Article 11 of the holders of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or other winding-up, assignment for the benefit of creditors or other marshaling of assets and liabilities of the Company referred to in Section 11.02 hereof, to receive, pursuant to and in accordance with such Section, cash, property and securities otherwise payable or deliverable to the Trustee or such Holder, or (2) under the conditions specified in Section 11.03, to prevent any payment prohibited by such Section or enforce their rights pursuant to Section 11.03(c) hereof. The failure to make a payment on account of principal of, premium, if any, or interest on the Notes by reason of any provision of this Article 11 shall not be construed as preventing the occurrence of a Default or an Event of Default hereunder. Section 11.07. Trustee To Effectuate Subordination. Each Holder of a Note by his acceptance thereof authorizes and directs the Trustee on his behalf to take, in the Trustee's sole discretion, such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of the Company whether in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely filing of a claim for the unpaid balance of the indebtedness of the Company owing to such Holder in the form required in such proceedings and the causing of such claim to be approved. If the Trustee does not file such a claim prior to 30 days before the expiration of the time to file such a claim, the holders of Senior Indebtedness, or any Representative, may file such a claim on behalf of Holders of the Notes. Section 11.08. No Waiver of Subordination Provisions. (a) No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided 109 -101- shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. (b) Without limiting the generality of subsection (a) of this Section 11.08, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Notes, without incurring responsibility to the Holders of the Notes and without impairing or releasing the subordination provided in this Article 11 or the obligations hereunder of the Holders of the Notes to the holders of Senior Indebtedness, do any one or more of the following: (1) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any Person liable in any manner for the collection or payment of Senior Indebtedness; and (4) exercise or refrain from exercising any rights against the Company and any other Person; provided, however, that in no event shall any such actions limit the right of the Trustee or the Holders of the Notes to take any action to accelerate the maturity of the Notes pursuant to Article 6 hereof or to pursue any rights or remedies hereunder or under applicable laws if the taking of such action does not otherwise violate the terms of this Indenture. Section 11.09. Notice to Trustee. (a) The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee at its Corporate Trust Office in respect of the Notes. Notwithstanding the provisions of this Article 11 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Notes, unless and until the Trustee shall have received written notice thereof from the Company or a holder of Senior Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of this Section 11.09, shall be entitled in all respects to assume that no such facts exist. 110 -102- (b) Subject to the provisions of Section 7.01 hereof, the Trustee shall be entitled to rely on the delivery to it of a written notice to the Trustee and the Company by a Person representing itself to be a holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor); provided, however, that failure to give such notice to the Company shall not affect in any way the right of the Trustee to rely on such notice. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article 11, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 11, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article 11, the Trustee, subject to the provisions of Section 7.01 hereof, and the Holders shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 11. 111 -103- Section 11.11. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of Trustee's Rights. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 11 with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 11 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. Section 11.12. Article Applicable to Paying Agents. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article 11 shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article 11 in addition to or in place of the Trustee. Section 11.13. No Suspension of Remedies. Nothing contained in this Article 11 shall limit the right of the Trustee or the Holders of Notes to take any action to accelerate the maturity of the Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or under applicable law, subject to the rights, if any, under this Article 11 of the holders, from time to time, of Senior Indebtedness. ARTICLE 12 MISCELLANEOUS Section 12.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. Section 12.02. Notices. Any notice or communication shall be given in writing and delivered in person, sent by facsimile, delivered by com- 112 -104- mercial courier service or mailed by first-class mail, postage prepaid, addressed as follows: If to the Company or any Guarantor: Hayes Wheels International, Inc. 38481 Huron River Drive Romulus, Michigan 48174 Attention: Chief Financial Officer Copy to: Skadden, Arps, Slate, Meagher & Flom One Rodney Square Wilmington, Delaware 19801 Attention: Robert B. Pincus, Esq. If to the Trustee: The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Attention: Denise Leonard Fax Number: (212) 815-5915 The Company, the Guarantors or the Trustee by written notice to the others may designate additional or different addresses for subsequent notices or communications. Any notice or communication to the Company, the Trustee, or the Guarantors shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is acknowledged, if telecopied; and five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee). Any notice or communication mailed to a Noteholder shall be mailed to him by first-class mail, postage prepaid, at his address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders. If a notice or communication to a Noteholder is mailed in the manner provided above, it shall be deemed duly given, whether or not the addressee receives it. 113 -105- In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice. Section 12.03. Communications by Holders with Other Holders. Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or the Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or any Guarantor to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate (which shall include the statements set forth in Section 12.05 below) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel (which shall include the statements set forth in Section 12.05 below) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. Section 12.05. Statements Required in Certificate and Opinion. Each certificate and opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements 114 -106- or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, it or he has made such examination or investigation as is necessary to enable it or him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with. Section 12.06. When Treasury Notes Disregarded. In determining whether the Holders of the required aggregate principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Guarantor or any other obligor on the Notes or by any Affiliate of any of them shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to the Notes and that the pledgee is not the Company, a Guarantor or any other obligor upon the Notes or any Affiliate of any of them. Section 12.07. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at meetings of Noteholders. The Registrar and Paying Agent may make reasonable rules for their functions. Section 12.08. Business Days; Legal Holidays. A "Business Day" is a day that is not a Legal Holiday. A "Legal Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day on which banking institutions are not required to be open in the State of New York. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. 115 -107- Section 12.09. Governing Law. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES. Section 12.10. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan, security or debt agreement of the Company or any Subsidiary thereof. No such indenture, loan, security or debt agreement may be used to interpret this Indenture. Section 12.11. No Recourse Against Others. A director, officer, employee, stockholder or incorporator, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creations. Each Noteholder by accepting a Note waives and releases all such liability. Such waiver and release are part of the consideration for the issuance of the Notes. Section 12.12. Successors. All agreements of the Company and the Guarantors in this Indenture and the Notes shall bind their respective successors. All agreements of the Trustee, any additional trustee and any Paying Agents in this Indenture shall bind its successor. Section 12.13. Multiple Counterparts. The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement. 116 -108- Section 12.14. Table of Contents, Headings, etc. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. Section 12.15. Separability. Each provision of this Indenture shall be considered separable and if for any reason any provision which is not essential to the effectuation of the basic purpose of this Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 117 -109- IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed, and the Company's corporate seal to be hereunto affixed and attested, all as of the date and year first written above. HAYES WHEELS INTERNATIONAL, INC. By: -------------------------------- Name: Title: ATTEST: - ------------------------- Name: Title: Guarantors: HAYES WHEELS INTERNATIONAL CALIFORNIA, INC. HAYES WHEELS INTERNATIONAL GEORGIA, INC. HAYES WHEELS INTERNATIONAL INDIANA, INC. HAYES WHEELS INTERNATIONAL MEXICO, INC. HAYES WHEELS INTERNATIONAL MICHIGAN, INC. MOTOR WHEEL CORPORATION MWC ACQUISITION SUB, INC. By: -------------------------------- Name: Title: ATTEST: - --------------------------- Name: Title: 118 -110- THE BANK OF NEW YORK as Trustee By: ---------------------------- Name: Title: 119 EXHIBIT A [FORM OF FACE OF NOTE] CUSIP HAYES WHEELS INTERNATIONAL, INC. No. [ ] $ 9 1/8% SENIOR SUBORDINATED NOTE DUE 2007 HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the "Company", which term includes any successor corporation), for value received, promises to pay to or registered assigns the principal sum of $ dollars on July 15, 2007. Interest Payment Dates: January 15 and July 15, commencing January 15, 1998 Record Dates: January 1 and July 1. Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place. A-1 120 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers. HAYES WHEELS INTERNATIONAL, INC. By: ------------------------------ Title: By: ------------------------------ Title: Certificate of Authentication This is one of the 9 1/8% Senior Subordinated Notes due 2007 referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, as Trustee By: -------------------------- Authorized Signatory A-2 121 [FORM OF REVERSE OF NOTE] HAYES WHEELS INTERNATIONAL, INC. 9 1/8% SENIOR SUBORDINATED NOTE DUE 2007 1. Interest. Hayes Wheels International, Inc., a Delaware corporation (the "Company"), promises to pay, interest on the principal amount set forth on the face hereof at a rate of 9 1/8% per annum. Interest hereon will accrue from and including the most recent date to which interest has been paid or, if no interest has been paid, from and including July 15, 1997 to but excluding the date on which interest is paid. Interest shall be payable in arrears on each January 15 and July 15 commencing January 15, 1998. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and on overdue interest (to the full extent permitted by law) at a rate equal to the rate of interest otherwise payable on the Notes. 2. Method of Payment. The Company will pay interest hereon (except defaulted interest) to the Persons who are registered holders (the "Holders") at the close of business on January 1 or July 1 next preceding the interest payment date (whether or not a Business Day). Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Interest may be paid by check mailed to the Holder entitled thereto at the address indicated on the register maintained by the Registrar for the Notes. 3. Paying Agent and Registrar. Initially, The Bank of New York (the "Trustee") will act as a Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to the Holders. Neither the Company nor any of its Affiliates may act as Paying Agent or Registrar. 4. Indenture. The Company issued the Notes under an Indenture dated as of July 15, 1997 (the "Indenture") among the Company, the Guarantors (as defined in the Indenture) and the Trustee. This is one of an issue of Notes of the Company issued, or to be issued, under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Section Section 77aaa-77bbbb), as amended from time to time. The Notes are subject to all such terms, and Holders are A-3 122 referred to the Indenture and such Act for a statement of them. Capitalized and certain other terms used herein and not otherwise defined have the meanings set forth in the Indenture. The Notes are obligations of the Company limited in aggregate principal amount to $150.0 million. 5. Optional Redemption. The Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after July 15, 2002 upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount), set forth below, together, in each case, with accrued and unpaid interest to the Redemption Date, if redeemed during the twelve month period beginning on July 15 of each year listed below:
Year Redemption Price ---- ---------------- 2002 ............................................. 104.563% 2003 ............................................. 103.042% 2004 ............................................. 101.521% 2005 and thereafter .............................. 100.000%
Notwithstanding the foregoing, the Company may redeem in the aggregate up to 35% of the original principal amount of Notes at any time and from time to time on or prior to July 15, 2000 at a redemption price equal to 109.125% of the aggregate principal amount so redeemed, plus accrued and unpaid interest thereon to the Redemption Date with the Net Proceeds of one or more Equity Offerings; provided, that at least $97.5 million of the principal amount of Notes originally issued remains outstanding immediately after the occurrence of any such redemption and that any such redemption occurs within 60 days following the closing of any such Equity Offering. 6. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at his registered address. On and after the Redemption Date, unless the Company defaults in making the redemption payment, interest ceases to accrue on Notes or portions thereof called for redemption. 7. Offers to Purchase. The Indenture provides that upon the occurrence of a Change of Control or an Asset Sale and subject to further limitations contained therein, the Company shall make an offer to purchase outstanding Notes in accordance with the procedures set forth in the Indenture. A-4 123 8. Registration Rights. Pursuant to a Registration Rights Agreement among the Company, the Guarantors and the Initial Purchasers, the Company will be obligated to consummate an exchange offer pursuant to which the Holders shall have the right to exchange this Note for notes of a separate series issued under the Indenture (or a trust indenture substantially identical to the Indenture in accordance with the terms of the Registration Rights Agreement) which have been registered under the Securities Act, in like principal amount and having identical terms in all material respects as the Notes. The Holders shall be entitled to receive certain additional interest payments in the event such exchange offer is not consummated and upon certain other conditions, all pursuant to and in accordance with the terms of the Registration Rights Agreement. 9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay to it any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes or portion of a Note selected for redemption, or register the transfer of or exchange any Notes for a period of 15 days before a mailing of notice of redemption. 10. Persons Deemed Owners. The registered Holder of this Note may be treated as the owner of this Note for all purposes. 11. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee will pay the money back to the Company at its written request. After that, Holders entitled to the money must look to the Company for payment as general creditors unless an "abandoned property" law designates another Person. 12. Amendment, Supplement, Waiver, Etc. The Company, the Guarantors and the Trustee (if a party thereto) may, without the consent of the Holders of any outstanding Notes, amend, waive or supplement the Indenture or the Notes for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, maintaining the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, and making any change that does not materially and adversely affect the rights of any Holder. Other amendments and modifications of the Indenture or the Notes may A-5 124 be made by the Company, the Guarantors and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of the outstanding Notes, subject to certain exceptions requiring the consent of the Holders of the particular Notes to be affected. 13. Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things: (i) incur additional Indebtedness; (ii) pay dividends and make distributions; (iii) issue stock of subsidiaries; (iv) make certain investments; (v) repurchase stock; (vi) create liens; (vii) enter into transactions with affiliates; (viii) merge or consolidate the Company or the Guarantors; and (ix) transfer or sell assets. Such limitations are subject to a number of important qualifications and exceptions. Pursuant to Section 4.04 of the Indenture, the Company must annually report to the Trustee on compliance with such limitations. 14. Successor Corporation. When a successor corporation assumes all the obligations of its predecessor under the Notes and the Indenture and the transaction complies with the terms of Article 5 of the Indenture, the predecessor corporation will, except as provided in Article 5, be released from those obligations. 15. Defaults and Remedies. Events of Default are set forth in the Indenture. Subject to certain limitations in the Indenture, if an Event of Default (other than an Event of Default specified in Section 6.01(6) or (7) of the Indenture with respect to the Company) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding Notes may, by written notice to the Trustee and the Company, and the Trustee upon the request of the Holders of not less than 25% in aggregate principal amount of the outstanding Notes shall, declare all principal of and accrued interest on all Notes to be immediately due and payable and (i) such amounts shall become immediately due and payable or (ii) if there are any amounts outstanding under or in respect of the Amended Credit Agreement, such amounts shall become due and payable upon the first to occur of an acceleration of amounts outstanding under or in respect of the Amended Credit Agreement or five Business Days after receipt by the Company and the representative of the holders of Indebtedness under or in respect of the Amended Credit Agreement, of notice of the acceleration of the Notes. If an Event of Default specified in Section 6.01(6) or (7) of the Indenture occurs with respect to the Company, the principal amount of and inter- A-6 125 est on, all Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company and each Guarantor must furnish an annual compliance certificate to the Trustee. 16. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 17. No Recourse Against Others. No director, officer, employee incorporator or stockholder, of the Company or any Guarantor shall have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture or the Guarantees or for a claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 18. Discharge. The Company's obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the Notes or upon the irrevocable deposit with the Trustee of United States dollars sufficient to pay when due principal of and interest on the Notes to maturity or redemption, as the case may be. 19. Guarantees. The Note will be entitled to the benefits of certain Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders. 20. Authentication. This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note. A-7 126 21. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS NOTE WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. The Trustee, the Company, the Guarantor and the Holders agree to submit to the jurisdiction of the courts of the State of New York in any action or proceeding arising out of or relating to the Indenture or the Notes. 22. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 23. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and Registration Rights Agreement. Requests may be made to: HAYES WHEELS INTERNATIONAL, INC. 38481 Huron River Drive Romulus, Michigan 48174 Attention: Chief Financial Officer A-8 127 ASSIGNMENT I or we assign and transfer this Note to: (Insert assignee's social security or tax I.D. number) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ (Print or type name, address and zip code of assignee) and irrevocably appoint: ______________________________________________________________________ ______________________________________________________________________ Agent to transfer this Note on the books of the Company. The Agent may substitute another to act for him. Date: ___________ Signature: _______________________________ (Sign exactly as your name appears on the face of this Note) Signature Guarantee: A-9 128 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have all or any part of this Note purchased by the Company pursuant to Section 4.15 or Section 4.20 of the Indenture, check the appropriate box: Section 4.15 Section 4.20 If you want to have only part of the Note purchased by the Company pursuant to Section 4.15 or Section 4.20 of the Indenture, state the amount you elect to have purchased: $____________________ (multiple of $1,000) Date: ________________ Your Signature: _____________________________ (Sign exactly as your name appears on the face of this Note) _________________________ Signature Guaranteed A-10 129 EXHIBIT B [FORM OF PRIVATE PLACEMENT LEGEND] THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE ACT. B-1 130 EXHIBIT C-1 [FORM OF ASSIGNMENT FOR 144A NOTE] I or we assign and transfer this Note to: (Insert assignee's social security or tax I.D. number) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ (Print or type name, address and zip code of assignee) and irrevocably appoint: ________________________________________________________________________ ________________________________________________________________________ Agent to transfer this Note on the books of the Company. The Agent may substitute another to act for him. [Check One] [ ] (a) this Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder. or [ ] (b) this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture. If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.15 of the Indenture shall have been satisfied. Date:__________________ Your Signature:______________________ ________________________________ (Sign exactly as your name appears on the other side of this Note) Signature Guarantee: ________________________________ C-1-1 131 TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: __________________ ____________________________ NOTICE: To be executed by an executive officer C-1-2 132 EXHIBIT C-2 [FORM OF ASSIGNMENT FOR REGULATION S NOTE] I or we assign and transfer this Note to: (Insert assignee's social security or tax I.D. number) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ (Print or type name, address and zip code of assignee) and irrevocably appoint: ________________________________________________________________________ ________________________________________________________________________ Agent to transfer this Note on the books of the Company. The Agent may substitute another to act for him. [Check One] [ ] (a) this Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder. or [ ] (b) this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture. If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.15 of the Indenture shall have been satisfied. Date: __________________ Your Signature: ________________ _________________________________ (Sign exactly as your name appears on the other side of this Note) Signature Guarantee: ____________________________________ C-2-1 133 TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: __________________ ________________________ NOTICE: To be executed by an executive officer C-2-2 134 EXHIBIT D [FORM OF LEGEND FOR GLOBAL NOTE] Any Global Note authenticated and delivered hereunder shall bear a legend (which would be in addition to any other legends required in the case of a Restricted Note) in substantially the following form: THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. D-1 135 EXHIBIT E Form of Certificate to Be Delivered in Connection with Transfers to Non-QIB Accredited Investors ___________, ____ [Trustee] [Address] Attention: Re: Hayes Wheels International, Inc. (the "Company") 9 1/8% Senior Notes due 2007 (the "Notes") Dear Sirs: In connection with our proposed purchase of Notes, we confirm that: 1. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Indenture dated as of July 15, 1997 relating to the Notes and we agree to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "Securities Act"). 2. We understand that the Notes have not been registered under the Securities Act or any other applicable securities laws, have not been and will not be qualified for sale under the securities laws of any non-U.S. jurisdiction, and that the Notes may not be offered, sold, pledged or otherwise transferred except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Notes, we will do so only (i) to the Company or any subsidiary thereof, (ii) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined in Rule 144A), (iii) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you a signed letter containing certain representations and E-1 136 agreements relating to the restrictions on transfer of the Notes, (iv) outside the United States to foreign purchasers in offshore transactions meeting the requirements of Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein. 3. We understand that, on any proposed resale of any Notes, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting each are able to bear the economic risk of our or their investment, as the case may be. 5. We are acquiring the Notes purchased by us for our account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, [Name of Transferee] By: ____________________ Authorized Signature E-2 137 EXHIBIT F Form of Certificate to Be Delivered in Connection with Transfers Pursuant to Regulation S __________, ____ [Trustee] [Address] Attention: Re: Hayes Wheels International, Inc. (the "Company") 9 1/8% Senior Notes due 2007 (the "Notes") Dear Sirs: In connection with our proposed sale of $__________ aggregate principal amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that: (1) the offer of the Notes was not made to a U.S. person or to a person in the United States; (2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States; (3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; F-1 138 (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (5) we have advised the transferee of the transfer restrictions applicable to the Notes. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By: __________________________ Authorized Signature F-2 139 EXHIBIT G [FORM OF GUARANTEE] Each of the undersigned (the "Guarantors") hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture dated as of July 15, 1997 by and among Hayes Wheels International, Inc., as issuer, the Guarantors, as guarantors, and The Bank of New York, as Trustee (as amended, restated or supplemented from time to time, the "Indenture"), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal, premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Noteholders or the Trustee, all in accordance with the terms set forth in Article 10 of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Noteholders and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms and limitations of this Guarantee. HAYES WHEELS INTERNATIONAL- CALIFORNIA, INC. HAYES WHEELS INTERNATIONAL- GEORGIA, INC. HAYES WHEELS INTERNATIONAL- INDIANA, INC. HAYES WHEELS INTERNATIONAL- MEXICO, INC. HAYES WHEELS INTERNATIONAL- MICHIGAN, INC. MOTOR WHEEL CORPORATION MWC ACQUISITION SUB, INC. By: ___________________________ Name: Title: EX-4.3 5 REGISTRATION RIGHTS AGMT. - JUNE NOTES 1 EXHIBIT 4.3 - -------------------------------------------------------------------------------- REGISTRATION RIGHTS AGREEMENT Dated as of June 30, 1997 by and among HAYES WHEELS INTERNATIONAL, INC., THE GUARANTORS named herein and THE INITIAL PURCHASERS named herein - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS Page [S] [C] Definitions........................................ 1 Exchange Offer..................................... 5 Shelf Registration................................. 9 Additional Interest................................ 10 Registration Procedures............................ 12 Registration Expenses.............................. 23 Indemnification.................................... 25 Rules 144 and 144A................................. 29 Underwritten Registrations......................... 29 Miscellaneous...................................... 30 (a) Remedies...................................... 30 (b) Enforcement................................... 30 (c) No Inconsistent Agreements.................... 30 (d) Adjustments Affecting Registrable Notes....... 30 (e) Amendments and Waivers........................ 30 (f) Notices....................................... 31 (g) Successors and Assigns........................ 32 (h) Counterparts.................................. 32 (i) Headings...................................... 32 (j) GOVERNING LAW................................. 32 (k) Severability.................................. 32 (l) Entire Agreement.............................. 32 (m) Joint and Several Obligations................. 32 (n) Notes Held by the Company or their Affiliates. 33 -i- 3 REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of June 30, 1997, by and among HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the "Company"), the Guarantors as listed on the signature pages hereto (the "Guarantors"), and CIBC WOOD GUNDY SECURITIES CORP. ("CIBC"), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BEAR, STEARNS & CO. INC., MORGAN STANLEY & CO. INC. and SALOMON BROTHERS INC, as initial purchasers (the "Initial Purchasers"). This Agreement is entered into in connection with the Purchase Agreement, dated as of June 19, 1997 among the Company, the Guarantors and the Initial Purchasers (the "Purchase Agreement") relating to the sale by the Company to the Initial Purchasers of $250,000,000 aggregate principal amount of the Company's 9 1/8% Senior Subordinated Notes due 2007 (the "Notes") and the guarantee of the Notes by the Guarantors (the "Guarantees"). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement to the Initial Purchasers and their direct and indirect transferees and assigns. The execution and delivery of this Agreement is a condition to the Initial Purchasers' obligation to purchase the Notes under the Purchase Agreement. The parties hereby agree as follows: 1. Definitions As used in this Agreement, the following terms shall have the following meanings: Additional Interest: See Section 4(a). Advice: See Section 5. Applicable Period: See Section 2(b). Closing: See the Purchase Agreement. Company: See the introductory paragraph to this Agreement. Effectiveness Date: The 120th day after the Issue Date. Effectiveness Period: See Section 3(a). 4 -2- Event Date: See Section 4(c). Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Exchange Notes: See Section 2(a). Exchange Offer: See Section 2(a). Exchange Registration Statement: See Section 2(a). Filing Date: The 60th day after the Issue Date. Guarantees: See the introductory paragraph of this Agreement. Holder: Any holder of a Registrable Note or Registrable Notes. Indemnified Person: See Section 7(c). Indemnifying Person: See Section 7(c). Indenture: The Indenture, dated as of June 30, 1997, among the Company, the Guarantors and The Bank of New York, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. Initial Purchasers: See the introductory paragraph to this Agreement. Initial Shelf Registration: See Section 3(a). Inspectors: See Section 5(o). Issue Date: The date on which the original Notes are sold to the Initial Purchasers pursuant to the Purchase Agreement. NASD: See Section 5(t). Notes: See the introductory paragraph to this Agreement. Participant: See Section 7(a). 5 -3- Participating Broker-Dealer: See Section 2(b). Person: An individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof). Private Exchange: See Section 2(b). Private Exchange Notes: See Section 2(b). Prospectus: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. Purchase Agreement: See the introductory paragraphs to this Agreement. Records: See Section 5(o). Registrable Notes: The Notes upon original issuance of the Notes and at all times subsequent thereto and, if issued, the Private Exchange Notes, until in the case of any such Notes or any such Private Exchange Notes, as the case may be, (i) a Registration Statement covering such Notes or such Private Exchange Notes has been declared effective by the SEC and such Notes or such Private Exchange Notes, as the case may be, have been exchanged and/or disposed of in accordance with such effective Registration Statement, (ii) such Notes or such Private Exchange Notes, as the case may be, are sold in compliance with Rule 144, (iii) in the case of any Note, such Note has been exchanged for an Exchange Note or Exchange Notes pursuant to an Exchange Offer or (iv) such Notes or such Private Exchange Notes, as the case may be, cease to be outstanding. Registration Default: See Section 4(a). Registration Statement: Any registration statement of the Company or the Guarantors, including, but not limited 6 -4- to, the Exchange Registration Statement, which covers any of the Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. Shelf Notice: See Section 2(c). Shelf Registration: See Section 3(b). Subsequent Shelf Registration: See Section 3(b). TIA: The Trust Indenture Act of 1939, as amended. Trustee: The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any). 7 -5- Underwritten registration or underwritten offering: A registration under the Securities Act in which securities of the Company are sold to an underwriter(s) for reoffering to the public. 2. Exchange Offer (a) Each of the Company and the Guarantors jointly and severally agrees to use its best efforts to file with the SEC as soon as practicable after the Closing, but in no event later than the Filing Date, documents pertaining to an offer to exchange (the "Exchange Offer") any and all of the Registrable Notes for a like aggregate principal amount of debt securities of the Company, guaranteed by the Guarantors, which are identical in all material respects to the Notes (the "Exchange Notes") (and which are entitled to the benefits of the Indenture or a trust indenture which is substantially identical to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA) and which, in either case, has been qualified under the TIA), except that the Exchange Notes shall have been registered pursuant to an effective registration statement under the Securities Act and will not contain terms with respect to transfer restrictions. The documents pertaining to the Exchange Offer will be filed under the Securities Act on the appropriate form (the "Exchange Registration Statement") and the Exchange Offer will comply with all applicable tender offer rules and regulations under the Exchange Act. Each of the Company and the Guarantors jointly and severally agrees to use its best efforts to (x) cause the Exchange Registration Statement to become effective under the Securities Act on or before the Effectiveness Date; (y) keep the Exchange Offer open for at least 30 days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or prior to the 150th day (or, in the event of any extension of the Exchange Offer required by applicable law, the earliest day following any such extension) following the Issue Date. Each Holder who participates in the Exchange Offer will be required to represent that any Exchange Notes received by it will be acquired in the ordinary course of its business, that at the time of the consummation of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes in violation of the provisions of the Securities Act, that such Holder is not an affiliate of any of the Company or the Guarantors within the meaning of Rule 405 promulgated under the Securities Act or if 8 -6- it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable and that is not acting on behalf of any Person who could not truthfully make the foregoing representations. Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Notes that are Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers, and the Company and the Guarantors shall have no further obligation to register Registrable Notes (other than Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers) pursuant to Section 3 of this Agreement. (b) The Company and the Guarantors shall include within the Prospectus contained in the Exchange Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of the Initial Purchasers, represent the prevailing views of the staff of the SEC. Such "Plan of Distribution" section shall also allow the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Notes. Each of the Company and the Guarantors shall use its best efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such Persons must comply with such requirements in order to resell the Exchange Notes, provided that such period shall not exceed 180 days (or such longer period if extended pursuant to the last paragraph of Section 5) (the "Applicable Period"). If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them and having, or which are reasonably likely to be determined to have, the 9 -7- status as an unsold allotment in the initial distribution, the Company and the Guarantors upon the request of such Initial Purchasers shall, simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to such Initial Purchasers, in exchange (the "Private Exchange") for the Notes held by such Initial Purchasers, a like principal amount of debt securities of the Company guaranteed by the Guarantors, that are identical in all material respects to the Exchange Notes (the "Private Exchange Notes") (and which are issued pursuant to the same indenture as the Exchange Notes) except for the placement of a restrictive legend on the Private Exchange Notes. If possible, the Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes. Interest on the Exchange Notes and Private Exchange Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or (ii) if the Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Notes, from the Issue Date. In connection with the Exchange Offer, the Company and the Guarantors shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; and (iii) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York City time, on the last business day on which the Exchange Offer shall remain open. As soon as practicable after the close of the Exchange Offer or the Private Exchange, as the case may be, the Company and the Guarantors shall: (i) accept for exchange all Notes tendered and not validly withdrawn pursuant to the Exchange Offer or the Private Exchange; 10 -8- (ii) deliver to the Trustee for cancellation all Notes so accepted for exchange; and (iii) cause the Trustee to authenticate and deliver promptly to each Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. The Exchange Notes and the Private Exchange Notes may be issued under (i) the Indenture or (ii) an indenture substantially identical to the Indenture, which in either event will provide that (1) the Exchange Notes will not be subject to the transfer restrictions set forth in the Indenture and (2) the Private Exchange Notes will be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes will have the right to vote and give consents together on all matters presented to such holders for votes or consents as one class and that neither the Exchange Notes, the Private Exchange Notes nor the Notes will have the right to vote or consent as a separate class on any matter. (c) If (1) prior to the consummation of the Exchange Offer, the Company and the Guarantors or Holders of at least a majority in aggregate principal amount of the Registrable Notes reasonably determine in good faith that (i) the Exchange Notes would not, upon receipt, be freely transferable by such Holders which are not affiliates (within the meaning of the Securities Act) of the Company or the Guarantors without restriction under the Securities Act and without restrictions under applicable state securities laws, (ii) the interests of the Holders under this Agreement would be adversely affected by the consummation of the Exchange Offer or (iii) after conferring with counsel, the SEC is unlikely to permit the commencement of the Exchange Offer prior to the Effectiveness Date, (2) subsequent to the consummation of the Private Exchange, any holder of the Private Exchange Notes so requests or (3) the Exchange Offer is commenced and not consummated within 150 days of the Issue Date, then the Company and the Guarantors shall promptly deliver to the Holders and the Trustee written notice thereof (the "Shelf Notice") and shall file an Initial Shelf Registration pursuant to Section 3. Following the delivery of a Shelf Notice to the Holders of Registrable Notes (in the circumstances contemplated by clauses (1) and (3) of the preceding sentence), the Company and the Guarantors shall not have any further obligation to conduct the Exchange Offer or the Private Exchange under this Section 2. 11 -9- 3. Shelf Registration If a Shelf Notice is required to be delivered as contemplated by Section 2(c), then: (a) Initial Shelf Registration. The Company and the Guarantors shall prepare and file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the then existing Registrable Notes (the "Initial Shelf Registration"). If the Company and the Guarantors shall have not yet filed an Exchange Registration Statement, each of the Company and the Guarantors shall use its best efforts to file with the SEC the Initial Shelf Registration on or prior to the Filing Date. In any other instance, each of the Company and the Guarantors shall use its best efforts to file with the SEC the Initial Shelf Registration as promptly as practicable following delivery of the Shelf Notice. The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Notes for resale by such Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Company and the Guarantors shall not permit any securities other than the Registrable Notes to be included in the Initial Shelf Registration or any Subsequent Shelf Registration. Each of the Company and the Guarantors shall use its best efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act, if an Exchange Registration Statement has not yet been declared effective, on or prior to the Effectiveness Date, or, in any other instance, as soon as practicable after the filing thereof and in no event later than 90 days following delivery of the Shelf Notice, and to keep the Initial Shelf Registration continuously effective under the Securities Act until the date which is 24 months from the date on which such Initial Shelf Registration is declared effective (subject to extension pursuant to the last paragraph of Section 5 hereof), or such shorter period ending when all Registrable Notes covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration (the "Effectiveness Period"). (b) Subsequent Shelf Registrations. If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for any reason at any time prior to the termination of the Effectiveness Period, each of the Company and the Guarantors shall use its best efforts to promptly restore the effectiveness thereof, and in any event shall, within 45 days of such cessation of effectiveness, amend the Shelf Registra- 12 -10- tion in a manner reasonably expected to restore the effectiveness thereof, or file an additional "shelf" Registration Statement pursuant to Rule 415 covering all of the then existing Registrable Notes (a "Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed, each of the Company and the Guarantors shall use its best efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such Registration Statement continuously effective during the Effectiveness Period. As used herein the term "Shelf Registration" means the Initial Shelf Registration and any Subsequent Shelf Registration. (c) Supplements and Amendments. The Company and the Guarantors shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration or if required by the Securities Act. The Company and the Guarantors shall promptly supplement and amend the Shelf Registration if any such supplement or amendment is reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter(s) of such Registrable Notes. 4. Additional Interest (a) The Company and the Initial Purchasers agree that the Holders of Registrable Notes will suffer damages if the Company fails to fulfill its obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Company agrees to pay additional interest on the Notes ("Additional Interest") under the circumstances and to the extent set forth below: (i) if neither the Exchange Registration Statement nor the Initial Shelf Registration has been filed on or prior to the Filing Date; (ii) if neither the Exchange Registration Statement nor the Initial Shelf Registration has been declared effective on or prior to the Effectiveness Date; (iii) if an Initial Shelf Registration required by Section 2(c)(2) has not been filed on or prior to the date 45 days after delivery of the Shelf Notice; 13 -11- (iv) if an Initial Shelf Registration required by Section 2(c)(2) has not been declared effective on or prior to the date 90 days after the delivery of the Shelf Notice; and/or (v) if (A) the Company has not exchanged the Exchange Notes for all Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to the date 150 days after the Issue Date or (B) the Exchange Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time prior to the termination of the Effectiveness Period; (each such event referred to in clauses (i) through (v) above is a "Registration Default"). The sole remedy available to Holders of the Notes for a Registration Default will be the accrual of Additional Interest as follows: the per annum interest rate on the Notes will increase by .50% during the first 90-day period following the occurrence of a Registration Default and until it is waived or cured; and the per annum interest rate will increase by an additional .25% for each subsequent 90-day period during which the Registration Default remains uncured, up to a maximum additional interest rate of 2.0% per annum, provided, however, that only Holders of Private Exchange Notes shall be entitled to receive Additional Interest as a result of a Registration Default pursuant to clause (iii) or (iv), provided, further, that (1) upon the filing of the Exchange Registration Statement or the Initial Shelf Registration (in the case of (i) above), (2) upon the effectiveness of the Exchange Registration Statement or a Shelf Registration (in the case of (ii) above), (3) upon the filing of the Shelf Registration (in the case of (iii) above), (4) upon the effectiveness of the Shelf Registration (in the case of (iv) above), or (5) upon the exchange of Exchange Notes for all Notes tendered or the effectiveness of a Shelf Registration (in the case of (v)(A) above), or upon the subsequent effectiveness of the Exchange Registration Statement which had ceased to remain effective or the effectiveness of a Shelf Registration (in the case of (v)(B) above), or upon the subsequent effectiveness of the Shelf Registration which had ceased to remain effective (in the case of (v)(C) above), Additional Interest on the Notes as a result of such clause (i), (ii), (iii), (iv) or (v) (or the relevant subclause thereof), as the case may be, shall cease to accrue and the interest rate on the Notes will revert to the interest rate originally borne by the Notes. 14 -12- (b) Notwithstanding the foregoing, no Additional Interest will be payable with respect to a Registration Default described in clause (v)(C) above, if pending a material corporate transaction, the Company issues a notice that the Registration Statement, or the prospectus contained therein, is unusable, or such notice is required under applicable securities laws to be issued by the Company, and the aggregate number of days in any consecutive twelve month period for which the Registration Statement, or the Prospectus contained therein, is unusable pursuant to all such notices has not exceeded 75 days in the aggregate. (c) The Company and the Guarantors shall notify the Trustee within one business day after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Any amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash semi-annually on each January 15 and July 15 (to the Holders of record on the January 1 and July 1 immediately preceding such dates), commencing with the first such date occurring after any such Additional Interest commences to accrue and until such Registration Default is cured, by depositing with the Trustee, in trust for the benefit of such Holders, immediately available funds in sums sufficient to pay such Additional Interest. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Notes, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 5. Registration Procedures In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Company and the Guarantors shall effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company and the Guarantors shall: Prepare and file with the SEC, as provided herein, a Registration Statement or Registration Statements as prescribed by Section 2 or 3, and use their respective best efforts to cause each such Registration Statement to become effective and remain effective as pro- 15 -13- vided herein, provided that, if (1) such filing is pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company and the Guarantors shall, if requested, furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement and each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriter(s), if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (to the extent practicable, at least 5 business days prior to such filing). The Company and the Guarantors shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document, if the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or such Participating Broker-Dealer, as the case may be, their counsel, or the managing underwriter(s), if any, reasonably object to information concerning the Holders or such Participating Broker-Dealer contained therein. Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be; cause the related Prospectus to be supplemented by any prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus; the Company and the Guarantors shall be deemed not to have used their best efforts to keep a Registration Statement effective during the Applicable Period if any of them voluntarily takes any action that would result in 16 -14- selling Holders of the Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such Exchange Notes during that period unless such action is required by applicable law or unless the Company and the Guarantors comply with this Agreement, including without limitation, the provisions of clauses 5(c)(v) and (vi) below. If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriter(s), if any, promptly (but in any event within two business days), and confirm such notice in writing, (i) when a Prospectus or any prospectus supplement or post-effective amendment thereto has been filed, and, with respect to a Registration Statement or any post-effective amendment thereto, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, without charge, one conformed copy of such Registration Statement or post-effective amendment thereto including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary Prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 5(n) below cease to be true and correct, (iv) of the receipt by any of the Company or the Guarantors of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker- Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any 17 -15- event or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in, or amendments or supplements to, such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the Company's or any Guarantor's reasonable determination that a post-effective amendment to a Registration Statement would be necessary or appropriate. If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use their best efforts to obtain the withdrawal of any such order as promptly as practicable. If a Shelf Registration is filed pursuant to Section 3 and if requested by the managing underwriter(s), if any, or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter(s), if any, or such Holders reasonably request to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notifi- 18 -16- cation of the matters to be incorporated in such Prospectus supplement or post-effective amendment. If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes who so requests and to each such Participating Broker-Dealer who so requests and to counsel and the managing underwriter(s), if any, without charge, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel, and the managing underwriter or underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of preliminary Prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, each of the Company and the Guarantors hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the managing underwriter or underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto. Prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Appli- 19 -17- cable Period, to use their best efforts to register or qualify, and to cooperate with the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification of (or exemption from such registration or qualification), such Registrable Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters, if any, reasonably request in writing, provided that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Company and the Guarantors agree to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h); keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided that none of the Company or the Guarantors shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not otherwise so subject. If a Shelf Registration is filed pursuant to Section 3, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request. Use their best efforts to cause the Registrable Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies 20 -18- or authorities as may be necessary to enable the seller or sellers thereof or the managing underwriter or underwriters, if any, to consummate the disposition of such Registrable Notes, except as may be required solely as a consequence of the nature of such selling Holder's business, in which case each of the Company and the Guarantors will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals. If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi), as promptly as reasonably practicable prepare and (subject to Section 5(a)) file with the SEC, at the joint and several expense of each of the Company and the Guarantors, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Use their best efforts to cause the Registrable Notes covered by a Registration Statement or the Exchange Notes, as the case may be, to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement or the Exchange Notes, as the case may be, or the managing underwriter or underwriters, if any. Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes or Exchange Notes, as the case may be, in a form eligible for deposit with The Depository Trust Com- 21 -19- pany and (ii) provide a CUSIP number for the Registrable Notes or Exchange Notes, as the case may be. In connection with an underwritten offering of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Notes and take all such other actions as are reasonably requested by the managing underwriter(s), if any, in order to expedite or facilitate the registration or the disposition of such Registrable Notes, and in such connection, (i) make such representations and warranties to the managing underwriter or underwriters on behalf of any underwriters, with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Notes, and confirm the same if and when requested; (ii) obtain opinions of counsel to the Company and the Guarantors and updates thereof in form and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the managing underwriter or underwriters covering the matters customarily covered in opinions requested in underwritten offerings of debt securities similar to the Notes and such other matters as may be reasonably requested by the managing underwriter(s); provided, that no such opinion of outside counsel to the Company or any Guarantor which shall have rendered an opinion in connection with the sale of the Notes to the Initial Purchasers (the "Original Opinion") need cover any matter other than matters covered in the Original Opinion and such other matters concerning the Registration Statement and the application of the Securities Act to the offer and sale of the Registration Notes as may be reasonably requested by the managing underwriter or underwriters; (iii) obtain "cold comfort" letters and updates thereof in form and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other independent certified public accountants of any subsidiary of any of the Company or of any business acquired by any of the Company or the Guarantors for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the managing underwriter or underwriters on behalf of any underwriters, such letters to be in 22 -20- customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt securities similar to the Notes and such other matters as may be reasonably requested by the managing underwriter or underwriters; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to said Section. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be (collectively, the "Inspectors"), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and the Guarantors and their respective subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Company and the Guarantors and their respective subsidiaries to supply all information in each case reasonably requested by any such Inspector in connection with such Registration Statement. Records which the Company and the Guarantors determine, in good faith, to be confidential and any Records which they notify the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a material misstatement or material omission in such Registration Statement, (ii) the release of such Records is ordered pursuant 23 -21- to a subpoena or other order from a court of competent jurisdiction or (iii) the information in such Records has been made generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer or underwriter will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company or for any purpose other than in connection with such Registration Statement unless and until such is made generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give prompt notice to the Company and allow the Company to undertake appropriate action to prevent disclosure of the Records deemed confidential at their expense. Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a), as the case may be, to be qualified under the TIA not later than the effective date of the Exchange Registration Statement or the first Registration Statement relating to the Registrable Notes; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Notes, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner. Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first 24 -22- fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said 12-month periods. Upon consummation of an Exchange Offer or a Private Exchange, obtain an opinion of counsel to the Company and the Guarantors, in a form customary for underwritten offerings of debt securities similar to the Notes, addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer or the Private Exchange, as the case may be, and which includes an opinion that (i) each of the Company and the Guarantors has duly authorized, executed and delivered the Exchange Notes and Private Exchange Notes and the related indenture and (ii) each of the Exchange Notes or the Private Exchange Notes, as the case may be, and related indenture constitute a legal, valid and binding obligation of each of the Company and the Guarantors, enforceable against each of the Company and the Guarantors in accordance with its respective terms (with customary exceptions). If an Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Company and the Guarantors (or to such other Person as directed by the Company and the Guarantors) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, the Company and the Guarantors shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being canceled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be; and, in no event shall such Registrable Notes be marked as paid or otherwise satisfied. Cooperate with each seller of Registrable Notes covered by any Registration Statement and the managing underwriter(s), if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"). Use their respective best efforts to take all other reasonable steps necessary to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby. 25 -23- The Company and the Guarantors may require each seller of Registrable Notes or Participating Broker-Dealer as to which any registration is being effected to furnish to the Company and the Guarantors such information regarding such seller or Participating Broker-Dealer and the distribution of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, as the Company and the Guarantors may, from time to time, reasonably request. The Company may exclude from such registration the Registrable Notes of any seller or Participating Broker-Dealer who fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such seller not materially misleading. Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k), or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event the Company shall give any such notice, each of the Effectiveness Period and the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) or (y) the Advice. 6. Registration Expenses (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Company and the Guarantors shall be borne by the Company and the Guaran- 26 -24- tors, jointly and severally, whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions in the United States (x) where the Holders of Registrable Notes are located, in the case of the Exchange Notes, or (y) as provided in Section 5(h), in the case of Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is reasonably requested by the managing underwriter or underwriters, if any, or, in respect of Registrable Notes or Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable Period, if reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Notes included in any Registration Statement or of such Exchange Notes, as the case may be), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and fees and disbursements of special counsel for the sellers of Registrable Notes (subject to the provisions of Section 6(b)), (v) fees and disbursements of all independent certified public accountants referred to in Section 5(n)(iii) (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) rating agency fees, (vii) Securities Act liability insurance, if the Company and/or the Guarantors desire such insurance, (viii) fees and expenses of the Trustee, (ix) fees and expenses of all other Persons retained by the Company and/or the Guarantors, (x) internal expenses of the Company and the Guarantors (including, without limitation, all salaries and expenses of officers and employees of the Company and the Guarantors performing legal or accounting duties), (xi) the expense of any annual audit, (xii) the fees and expenses incurred in connection with any listing of the securities to be registered on any securities exchange and (xiii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agree- 27 -25- ments, securities sales agreements, indentures and any other documents necessary in order to comply with this Agreement. (b) In connection with any Shelf Registration hereunder, the Company and the Guarantors, jointly and severally, shall reimburse the Holders of the Registrable Notes being registered in such registration for the reasonable fees and disbursements of not more than one counsel (in addition to appropriate local counsel) chosen by the Holders of a majority in aggregate principal amount of the Registrable Notes to be included in such Registration Statement and other reasonable and documented out-of-pocket expenses of the Holders of Registrable Notes incurred in connection with the registration of the Registrable Notes. The Company and the Guarantors shall not have any obligation to pay any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities. 7. Indemnification (a) Each of the Company and the Guarantors, jointly and severally, agrees to indemnify and hold harmless each Holder of Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, the officers and directors of each such Person, and each Person, if any, who controls any such Person within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable and documented legal fees and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary Prospectus, or caused by, arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Participant furnished to the Company in writing by such Participant expressly for use therein; provided that the foregoing indemnity with respect to any preliminary Prospectus shall not inure to the benefit of any Participant (or to the benefit of an officer or director of such Participant or any 28 -26- Person controlling such Participant) from whom the Person asserting any such losses, claims, damages or liabilities purchased Registrable Notes or Exchange Notes if such untrue statement or omission or alleged untrue statement or omission made in such preliminary Prospectus is eliminated or remedied in the related Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) and a copy of the related Prospectus (as so amended or supplemented) shall have been furnished to such Participant at or prior to the sale of such Registrable or Exchange Notes, as the case may be, to such Person. (b) Each Participant will be required to agree, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors, their respective directors and officers and each Person who controls any of the Company or the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantors to each Participant and shall have the rights and duties given to the Company and the Guarantors in paragraph (c) of this Section 7 (except that if the Company and the Guarantors shall have assumed the defense thereof, such Participant shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Participant), but only with reference to information relating to such Participant furnished to the Company and the Guarantors in writing by such Participant expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary Prospectus. The liability of any Participant under this paragraph (b) shall in no event exceed the proceeds received by such Participant from sales of Registrable Notes or Exchange Notes giving rise to such obligations. (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) of this Section 7, such Person (the "Indemnified Person") shall promptly notify the Person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon request of the Indemnified Person, shall retain one counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may reasonably designate in such proceeding and shall pay the reasonable fees and expenses incurred by such counsel related to such proceeding. In any such 29 -27- proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed in writing to the contrary, (ii) the Indemnifying Person has failed to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and such Indemnified Person shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to any such Indemnifying Person. It is understood that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate law firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the Participants and such control Persons of Participants shall be designated in writing by Participants who sold a majority in interest of Registrable Notes and Exchange Notes sold by all such Participants and any such separate firm for the Company and the Guarantors, their directors, their officers and such control Persons of the Company and the Guarantors shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its prior written consent, but if settled with such consent or if there is a final judgment for the plaintiff for which the Indemnified Person is entitled to indemnification pursuant to this Agreement, the Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for reasonable fees and expenses incurred by counsel as contemplated by the third sentence of this paragraph, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided, however, that the Indemnifying Person shall not be liable for any settlement effected without its consent pursuant to this sentence if the Indemnifying Party is contesting, in good faith, the request for reimbursement. No Indemnifying Person shall, without the prior written consent of 30 -28- the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release (or any other release reasonably acceptable to the Indemnified Person) of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in paragraphs (a) and (b) of this Section 7 is unavailable to an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein (other than as a result of the proviso set forth in Section 7(a)), then each Indemnifying Person under such paragraphs, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Company and the Guarantors on the one hand and the Participants on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and the Participants on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Participants and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Participants were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Participant be required to contribute any amount in excess of the amount by which proceeds received by such Participant from sales of Registrable Notes or 31 -29- Exchange Notes exceeds the amount of any damages that such Participant has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (f) The indemnity and contribution agreements contained in this Section 7 will be in addition to any liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above. 8. Rules 144 and 144A Each of the Company and the Guarantors covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Notes, make publicly available other information of a like nature so long as necessary to permit sales pursuant to Rule 144 or Rule 144A. Each of the Company and the Guarantors further covenants that so long as any Registrable Notes remain outstanding to make available to any Holder of Registrable Notes in connection with any sale thereof, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Notes pursuant to (a) such Rule 144A, or (b) any similar rule or regulation hereafter adopted by the SEC. 9. Underwritten Registrations If any of the Registrable Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banking firm or firms that will underwrite the offering and the manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Notes included in such offering and shall be reasonably acceptable to the Company and the Guarantors. No Holder of Registrable Notes may participate in any underwritten offering hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes 32 -30- and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 10. Miscellaneous (a) Remedies. In the event of a breach by the Company or any Guarantor of any of its obligations under this Agreement, other than the occurrence of an event which requires payment of Additional Interest, each Holder of Registrable Notes, in addition to being entitled to exercise all rights provided herein, in the Indenture or, in the case of the Initial Purchasers, in the Purchase Agreement or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. Each of the Company and the Guarantors, jointly and severally, agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees, jointly and severally, that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) Enforcement. The Trustee shall be authorized to enforce the provisions of this Agreement for the ratable benefit of the Holders. (c) No Inconsistent Agreements. None of the Company or the Guarantors has entered, as of the date hereof, and the Company and the Guarantors shall not enter, after the date of this Agreement, into any agreement with respect to any of their securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. None of the Company or the Guarantors has entered or will enter into any agreement with respect to any of its securities which will grant to any Person piggy-back rights with respect to a Registration Statement required to be filed under this Agreement. (d) Adjustments Affecting Registrable Notes. Neither the Company nor the Guarantors shall, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration undertaken pursuant to this Agreement. (e) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not 33 -31- be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority of the then outstanding aggregate principal amount of Registrable Notes. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold by such Holders pursuant to such Registration Statement, provided that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. (f) Notices. All notices and other communications (including without limitation any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day courier or telecopier: (i) if to a Holder of Registrable Notes or any Participating Broker-Dealer, at the most current address given by the Trustee to the Company; and (ii) if to the Company or the Guarantors, to Hayes Wheels International, Inc., 38341 Huron River Drive, Romulus, Michigan 48174, Attention: General Counsel and with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, One Rodney Square, Wilmington, Delaware 19801, Attention: Robert B. Pincus, Esq. All such notices and communications shall be deemed to have been duly given: (i) when delivered by hand, if personally delivered; (ii) five business days after being deposited in the mail, postage prepaid, if mailed; (iii) one business day after being timely delivered to a next-day courier; and (iv) when receipt is acknowledged by the addressee, if telecopied. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee under the Indenture at the address specified in such Indenture. 34 -32- (g) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Registrable Notes. (h) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (i) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. (k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. (l) Entire Agreement. This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final expression of their agreement, and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. (m) Joint and Several Obligations. Unless otherwise stated herein, each of the obligations of the Company and the Guarantors under this Agreement shall be joint and several obligations of each of them. 35 -33- (n) Notes Held by the Company or their Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Company or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 36 -34- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation By:__________________________________ Name: Title: Guarantors: HAYES WHEELS INTERNATIONAL- CALIFORNIA, INC., a Delaware corporation By:__________________________________ Name: Title: HAYES WHEELS INTERNATIONAL-GEORGIA, INC., a Delaware corporation By:__________________________________ Name: Title: HAYES WHEELS INTERNATIONAL-INDIANA, INC., a Delaware corporation By:__________________________________ Name: Title: 37 -35- HAYES WHEELS INTERNATIONAL-MEXICO, INC., a Delaware corporation By:__________________________________ Name: Title: HAYES WHEELS INTERNATIONAL-MICHIGAN, INC., a Delaware corporation By:__________________________________ Name: Title: MOTOR WHEEL CORPORATION, an Ohio corporation By:__________________________________ Name: Title: MWC ACQUISITION SUB, INC., a Delaware corporation By:__________________________________ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date first above written. CIBC WOOD GUNDY SECURITIES CORP. By:____________________________ Name: Title: 38 -3- MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: --------------------------------- Name: Title: BEAR, STEARNS & CO. INC. By: --------------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: --------------------------------- Name: Title: SALOMON BROTHERS INC By: --------------------------------- Name: Title: EX-4.4 6 REGISTRATION RIGHTS AGMT. - JULY NOTES 1 EXHIBIT 4.4 - -------------------------------------------------------------------------------- REGISTRATION RIGHTS AGREEMENT Dated as of July 22, 1997 by and among HAYES WHEELS INTERNATIONAL, INC., THE GUARANTORS named herein and THE INITIAL PURCHASERS named herein - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
Page ---- Definitions ........................................................... 1 Exchange Offer ........................................................ 5 Shelf Registration .................................................... 9 Additional Interest ................................................... 10 Registration Procedures ............................................... 12 Registration Expenses ................................................. 23 Indemnification ....................................................... 25 Rules 144 and 144A .................................................... 29 Underwritten Registrations ............................................ 29 Miscellaneous ......................................................... 30 (a) Remedies ......................................................... 30 (b) Enforcement ...................................................... 30 (c) No Inconsistent Agreements ....................................... 30 (d) Adjustments Affecting Registrable Notes .......................... 30 (e) Amendments and Waivers ........................................... 30 (f) Notices .......................................................... 31 (g) Successors and Assigns ........................................... 32 (h) Counterparts ..................................................... 32 (i) Headings ......................................................... 32 (j) GOVERNING LAW .................................................... 32 (k) Severability ..................................................... 32 (l) Entire Agreement ................................................. 32 (m) Joint and Several Obligations .................................... 32 (n) Notes Held by the Company or their Affiliates .................... 33
-i- 3 REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of July 22, 1997, by and among HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the "Company"), the Guarantors as listed on the signature pages hereto (the "Guarantors"), and CIBC WOOD GUNDY SECURITIES CORP. ("CIBC") and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as initial purchasers (the "Initial Purchasers"). This Agreement is entered into in connection with the Purchase Agreement, dated as of July 16, 1997 among the Company, the Guarantors and the Initial Purchasers (the "Purchase Agreement") relating to the sale by the Company to the Initial Purchasers of $150,000,000 aggregate principal amount of the Company's 9 1/8% Senior Subordinated Notes due 2007 (the "Notes") and the guarantee of the Notes by the Guarantors (the "Guarantees"). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement to the Initial Purchasers and their direct and indirect transferees and assigns. The execution and delivery of this Agreement is a condition to the Initial Purchasers' obligation to purchase the Notes under the Purchase Agreement. The parties hereby agree as follows: 1. Definitions As used in this Agreement, the following terms shall have the following meanings: Additional Interest: See Section 4(a). Advice: See Section 5. Applicable Period: See Section 2(b). Closing: See the Purchase Agreement. Company: See the introductory paragraph to this Agreement. Effectiveness Date: The 120th day after the Issue Date. Effectiveness Period: See Section 3(a). Event Date: See Section 4(c). 4 -2- Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Exchange Notes: See Section 2(a). Exchange Offer: See Section 2(a). Exchange Registration Statement: See Section 2(a). Filing Date: The 60th day after the Issue Date. Guarantees: See the introductory paragraph of this Agreement. Holder: Any holder of a Registrable Note or Registrable Notes. Indemnified Person: See Section 7(c). Indemnifying Person: See Section 7(c). Indenture: The Indenture, dated as of July 15, 1997, among the Company, the Guarantors and The Bank of New York, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. Initial Purchasers: See the introductory paragraph to this Agreement. Initial Shelf Registration: See Section 3(a). Inspectors: See Section 5(o). Issue Date: The date on which the original Notes are sold to the Initial Purchasers pursuant to the Purchase Agreement. NASD: See Section 5(t). Notes: See the introductory paragraph to this Agreement. Participant: See Section 7(a). Participating Broker-Dealer: See Section 2(b). 5 -3- Person: An individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof). Private Exchange: See Section 2(b). Private Exchange Notes: See Section 2(b). Prospectus: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. Purchase Agreement: See the introductory paragraphs to this Agreement. Records: See Section 5(o). Registrable Notes: The Notes upon original issuance of the Notes and at all times subsequent thereto and, if issued, the Private Exchange Notes, until in the case of any such Notes or any such Private Exchange Notes, as the case may be, (i) a Registration Statement covering such Notes or such Private Exchange Notes has been declared effective by the SEC and such Notes or such Private Exchange Notes, as the case may be, have been exchanged and/or disposed of in accordance with such effective Registration Statement, (ii) such Notes or such Private Exchange Notes, as the case may be, are sold in compliance with Rule 144, (iii) in the case of any Note, such Note has been exchanged for an Exchange Note or Exchange Notes pursuant to an Exchange Offer or (iv) such Notes or such Private Exchange Notes, as the case may be, cease to be outstanding. Registration Default: See Section 4(a). Registration Statement: Any registration statement of the Company or the Guarantors, including, but not limited to, the Exchange Registration Statement, which covers any of the Registrable Notes pursuant to the provisions of this Agree- 6 -4- ment, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. Shelf Notice: See Section 2(c). Shelf Registration: See Section 3(b). Subsequent Shelf Registration: See Section 3(b). TIA: The Trust Indenture Act of 1939, as amended. Trustee: The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any). Underwritten registration or underwritten offering: A registration under the Securities Act in which securities of 7 -5- the Company are sold to an underwriter(s) for reoffering to the public. 2. Exchange Offer (a) Each of the Company and the Guarantors jointly and severally agrees to use its best efforts to file with the SEC as soon as practicable after the Closing, but in no event later than the Filing Date, documents pertaining to an offer to exchange (the "Exchange Offer") any and all of the Registrable Notes for a like aggregate principal amount of debt securities of the Company, guaranteed by the Guarantors, which are identical in all material respects to the Notes (the "Exchange Notes") (and which are entitled to the benefits of the Indenture or a trust indenture which is substantially identical to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA) and which, in either case, has been qualified under the TIA), except that the Exchange Notes shall have been registered pursuant to an effective registration statement under the Securities Act and will not contain terms with respect to transfer restrictions. The documents pertaining to the Exchange Offer will be filed under the Securities Act on the appropriate form (the "Exchange Registration Statement") and the Exchange Offer will comply with all applicable tender offer rules and regulations under the Exchange Act. Each of the Company and the Guarantors jointly and severally agrees to use its best efforts to (x) cause the Exchange Registration Statement to become effective under the Securities Act on or before the Effectiveness Date; (y) keep the Exchange Offer open for at least 30 days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or prior to the 150th day (or, in the event of any extension of the Exchange Offer required by applicable law, the earliest day following any such extension) following the Issue Date. Each Holder who participates in the Exchange Offer will be required to represent that any Exchange Notes received by it will be acquired in the ordinary course of its business, that at the time of the consummation of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes in violation of the provisions of the Securities Act, that such Holder is not an affiliate of any of the Company or the Guarantors within the meaning of Rule 405 promulgated under the Securities Act or if it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities 8 -6- Act, to the extent applicable and that is not acting on behalf of any Person who could not truthfully make the foregoing representations. Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Notes that are Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers, and the Company and the Guarantors shall have no further obligation to register Registrable Notes (other than Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers) pursuant to Section 3 of this Agreement. (b) The Company and the Guarantors shall include within the Prospectus contained in the Exchange Registration Statement a section entitled "Plan of Distribution,"reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of the Initial Purchasers, represent the prevailing views of the staff of the SEC. Such "Plan of Distribution" section shall also allow the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Notes. Each of the Company and the Guarantors shall use its best efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such Persons must comply with such requirements in order to resell the Exchange Notes, provided that such period shall not exceed 180 days (or such longer period if extended pursuant to the last paragraph of Section 5) (the "Applicable Period"). If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them and having, or which are reasonably likely to be determined to have, the status as an unsold allotment in the initial distribution, the Company and the Guarantors upon the request of such Initial 9 -7- Purchasers shall, simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to such Initial Purchasers, in exchange (the "Private Exchange") for the Notes held by such Initial Purchasers, a like principal amount of debt securities of the Company guaranteed by the Guarantors, that are identical in all material respects to the Exchange Notes (the "Private Exchange Notes") (and which are issued pursuant to the same indenture as the Exchange Notes) except for the placement of a restrictive legend on the Private Exchange Notes. If possible, the Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes. Interest on the Exchange Notes and Private Exchange Notes will accrue from (A) the later of (i) the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or (ii) if the Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on the Notes, from the Issue Date. In connection with the Exchange Offer, the Company and the Guarantors shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; and (iii) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York City time, on the last business day on which the Exchange Offer shall remain open. As soon as practicable after the close of the Exchange Offer or the Private Exchange, as the case may be, the Company and the Guarantors shall: (i) accept for exchange all Notes tendered and not validly withdrawn pursuant to the Exchange Offer or the Private Exchange; (ii) deliver to the Trustee for cancellation all Notes so accepted for exchange; and 10 -8- (iii) cause the Trustee to authenticate and deliver promptly to each Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. The Exchange Notes and the Private Exchange Notes may be issued under (i) the Indenture or (ii) an indenture substantially identical to the Indenture, which in either event will provide that (1) the Exchange Notes will not be subject to the transfer restrictions set forth in the Indenture and (2) the Private Exchange Notes will be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes will have the right to vote and give consents together on all matters presented to such holders for votes or consents as one class and that neither the Exchange Notes, the Private Exchange Notes nor the Notes will have the right to vote or consent as a separate class on any matter. (c) If (1) prior to the consummation of the Exchange Offer, the Company and the Guarantors or Holders of at least a majority in aggregate principal amount of the Registrable Notes reasonably determine in good faith that (i) the Exchange Notes would not, upon receipt, be freely transferable by such Holders which are not affiliates (within the meaning of the Securities Act) of the Company or the Guarantors without restriction under the Securities Act and without restrictions under applicable state securities laws, (ii) the interests of the Holders under this Agreement would be adversely affected by the consummation of the Exchange Offer or (iii) after conferring with counsel, the SEC is unlikely to permit the commencement of the Exchange Offer prior to the Effectiveness Date, (2) subsequent to the consummation of the Private Exchange, any holder of the Private Exchange Notes so requests or (3) the Exchange Offer is commenced and not consummated within 150 days of the Issue Date, then the Company and the Guarantors shall promptly deliver to the Holders and the Trustee written notice thereof (the "Shelf Notice") and shall file an Initial Shelf Registration pursuant to Section 3. Following the delivery of a Shelf Notice to the Holders of Registrable Notes (in the circumstances contemplated by clauses (1) and (3) of the preceding sentence), the Company and the Guarantors shall not have any further obligation to conduct the Exchange Offer or the Private Exchange under this Section 2. 11 -9- 3. Shelf Registration If a Shelf Notice is required to be delivered as contemplated by Section 2(c), then: (a) Initial Shelf Registration. The Company and the Guarantors shall prepare and file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the then existing Registrable Notes (the "Initial Shelf Registration"). If the Company and the Guarantors shall have not yet filed an Exchange Registration Statement, each of the Company and the Guarantors shall use its best efforts to file with the SEC the Initial Shelf Registration on or prior to the Filing Date. In any other instance, each of the Company and the Guarantors shall use its best efforts to file with the SEC the Initial Shelf Registration as promptly as practicable following delivery of the Shelf Notice. The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Notes for resale by such Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Company and the Guarantors shall not permit any securities other than the Registrable Notes to be included in the Initial Shelf Registration or any Subsequent Shelf Registration. Each of the Company and the Guarantors shall use its best efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act, if an Exchange Registration Statement has not yet been declared effective, on or prior to the Effectiveness Date, or, in any other instance, as soon as practicable after the filing thereof and in no event later than 90 days following delivery of the Shelf Notice, and to keep the Initial Shelf Registration continuously effective under the Securities Act until the date which is 24 months from the date on which such Initial Shelf Registration is declared effective (subject to extension pursuant to the last paragraph of Section 5 hereof), or such shorter period ending when all Registrable Notes covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration (the "Effectiveness Period"). (b) Subsequent Shelf Registrations. If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for any reason at any time prior to the termination of the Effectiveness Period, each of the Company and the Guarantors shall use its best efforts to promptly restore the effectiveness thereof, and in any event shall, within 45 days of such cessation of effectiveness, amend the Shelf Registra- 12 -10- tion in a manner reasonably expected to restore the effectiveness thereof, or file an additional "shelf" Registration Statement pursuant to Rule 415 covering all of the then existing Registrable Notes (a "Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed, each of the Company and the Guarantors shall use its best efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such Registration Statement continuously effective during the Effectiveness Period. As used herein the term "Shelf Registration" means the Initial Shelf Registration and any Subsequent Shelf Registration. (c) Supplements and Amendments. The Company and the Guarantors shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration or if required by the Securities Act. The Company and the Guarantors shall promptly supplement and amend the Shelf Registration if any such supplement or amendment is reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter(s) of such Registrable Notes. 4. Additional Interest (a) The Company and the Initial Purchasers agree that the Holders of Registrable Notes will suffer damages if the Company fails to fulfill its obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Company agrees to pay additional interest on the Notes ("Additional Interest") under the circumstances and to the extent set forth below: (i) if neither the Exchange Registration Statement nor the Initial Shelf Registration has been filed on or prior to the Filing Date; (ii) if neither the Exchange Registration Statement nor the Initial Shelf Registration has been declared effective on or prior to the Effectiveness Date; (iii) if an Initial Shelf Registration required by Section 2(c)(2) has not been filed on or prior to the date 45 days after delivery of the Shelf Notice; 13 -11- (iv) if an Initial Shelf Registration required by Section 2(c)(2) has not been declared effective on or prior to the date 90 days after the delivery of the Shelf Notice; and/or (v) if (A) the Company has not exchanged the Exchange Notes for all Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to the date 150 days after the Issue Date or (B) the Exchange Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time prior to the termination of the Effectiveness Period; (each such event referred to in clauses (i) through (v) above is a "Registration Default"). The sole remedy available to Holders of the Notes for a Registration Default will be the accrual of Additional Interest as follows: the per annum interest rate on the Notes will increase by .50% during the first 90-day period following the occurrence of a Registration Default and until it is waived or cured; and the per annum interest rate will increase by an additional .25% for each subsequent 90-day period during which the Registration Default remains uncured, up to a maximum additional interest rate of 2.0% per annum, provided, however, that only Holders of Private Exchange Notes shall be entitled to receive Additional Interest as a result of a Registration Default pursuant to clause (iii) or (iv), provided, further, that (1) upon the filing of the Exchange Registration Statement or the Initial Shelf Registration (in the case of (i) above), (2) upon the effectiveness of the Exchange Registration Statement or a Shelf Registration (in the case of (ii) above), (3) upon the filing of the Shelf Registration (in the case of (iii) above), (4) upon the effectiveness of the Shelf Registration (in the case of (iv) above), or (5) upon the exchange of Exchange Notes for all Notes tendered or the effectiveness of a Shelf Registration (in the case of (v)(A) above), or upon the subsequent effectiveness of the Exchange Registration Statement which had ceased to remain effective or the effectiveness of a Shelf Registration (in the case of (v)(B) above), or upon the subsequent effectiveness of the Shelf Registration which had ceased to remain effective (in the case of (v)(C) above), Additional Interest on the Notes as a result of such clause (i), (ii), (iii), (iv) or (v) (or the relevant subclause thereof), as the case may be, shall cease to accrue and the interest rate on the Notes will revert to the interest rate originally borne by the Notes. 14 -12- (b) Notwithstanding the foregoing, no Additional Interest will be payable with respect to a Registration Default described in clause (v)(C) above, if pending a material corporate transaction, the Company issues a notice that the Registration Statement, or the prospectus contained therein, is unusable, or such notice is required under applicable securities laws to be issued by the Company, and the aggregate number of days in any consecutive twelve month period for which the Registration Statement, or the Prospectus contained therein, is unusable pursuant to all such notices has not exceeded 75 days in the aggregate. (c) The Company and the Guarantors shall notify the Trustee within one business day after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Any amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash semi-annually on each January 15 and July 15 (to the Holders of record on the January 1 and July 1 immediately preceding such dates), commencing with the first such date occurring after any such Additional Interest commences to accrue and until such Registration Default is cured, by depositing with the Trustee, in trust for the benefit of such Holders, immediately available funds in sums sufficient to pay such Additional Interest. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Notes, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 5. Registration Procedures In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Company and the Guarantors shall effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company and the Guarantors shall: (a) Prepare and file with the SEC, as provided herein, a Registration Statement or Registration Statements as prescribed by Section 2 or 3, and use their respective best efforts to cause each such Registration Statement to become effective and remain effective as pro- 15 -13- vided herein, provided that, if (1) such filing is pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company and the Guarantors shall, if requested, furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement and each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriter(s), if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (to the extent practicable, at least 5 business days prior to such filing). The Company and the Guarantors shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document, if the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or such Participating Broker-Dealer, as the case may be, their counsel, or the managing underwriter(s), if any, reasonably object to information concerning the Holders or such Participating Broker-Dealer contained therein. (b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be; cause the related Prospectus to be supplemented by any prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus; the Company and the Guarantors shall be deemed not to have used their best efforts to keep a Registration Statement effective during the Applicable Period if any of them voluntarily takes any action that would result in 16 -14- selling Holders of the Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such Exchange Notes during that period unless such action is required by applicable law or unless the Company and the Guarantors comply with this Agreement, including without limitation, the provisions of clauses 5(c)(v) and (vi) below. (c) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriter(s), if any, promptly (but in any event within two business days), and confirm such notice in writing, (i) when a Prospectus or any prospectus supplement or post-effective amendment thereto has been filed, and, with respect to a Registration Statement or any post-effective amendment thereto, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, without charge, one conformed copy of such Registration Statement or post-effective amendment thereto including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary Prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 5(n) below cease to be true and correct, (iv) of the receipt by any of the Company or the Guarantors of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any 17 -15- event or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in, or amendments or supplements to, such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the Company's or any Guarantor's reasonable determination that a post-effective amendment to a Registration Statement would be necessary or appropriate. (d) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use their best efforts to obtain the withdrawal of any such order as promptly as practicable. (e) If a Shelf Registration is filed pursuant to Section 3 and if requested by the managing underwriter(s), if any, or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter(s), if any, or such Holders reasonably request to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notifi- 18 -16- cation of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (f) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes who so requests and to each such Participating Broker-Dealer who so requests and to counsel and the managing underwriter(s), if any, without charge, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. (g) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel, and the managing underwriter or underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of preliminary Prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, each of the Company and the Guarantors hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the managing underwriter or underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Appli- 19 -17- cable Period, to use their best efforts to register or qualify, and to cooperate with the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification of (or exemption from such registration or qualification), such Registrable Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters, if any, reasonably request in writing, provided that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Company and the Guarantors agree to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h); keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided that none of the Company or the Guarantors shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not otherwise so subject. (i) If a Shelf Registration is filed pursuant to Section 3, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request. (j) Use their best efforts to cause the Registrable Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies 20 -18- or authorities as may be necessary to enable the seller or sellers thereof or the managing underwriter or underwriters, if any, to consummate the disposition of such Registrable Notes, except as may be required solely as a consequence of the nature of such selling Holder's business, in which case each of the Company and the Guarantors will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals. (k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi), as promptly as reasonably practicable prepare and (subject to Section 5(a)) file with the SEC, at the joint and several expense of each of the Company and the Guarantors, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (l) Use their best efforts to cause the Registrable Notes covered by a Registration Statement or the Exchange Notes, as the case may be, to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement or the Exchange Notes, as the case may be, or the managing underwriter or underwriters, if any. (m) Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes or Exchange Notes, as the case may be, in a form eligible for deposit with The Depository Trust Com- 21 -19- pany and (ii) provide a CUSIP number for the Registrable Notes or Exchange Notes, as the case may be. (n) In connection with an underwritten offering of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Notes and take all such other actions as are reasonably requested by the managing underwriter(s), if any, in order to expedite or facilitate the registration or the disposition of such Registrable Notes, and in such connection, (i) make such representations and warranties to the managing underwriter or underwriters on behalf of any underwriters, with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Notes, and confirm the same if and when requested; (ii) obtain opinions of counsel to the Company and the Guarantors and updates thereof in form and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the managing underwriter or underwriters covering the matters customarily covered in opinions requested in underwritten offerings of debt securities similar to the Notes and such other matters as may be reasonably requested by the managing underwriter(s); provided, that no such opinion of outside counsel to the Company or any Guarantor which shall have rendered an opinion in connection with the sale of the Notes to the Initial Purchasers (the "Original Opinion") need cover any matter other than matters covered in the Original Opinion and such other matters concerning the Registration Statement and the application of the Securities Act to the offer and sale of the Registration Notes as may be reasonably requested by the managing underwriter or underwriters; (iii) obtain "cold comfort" letters and updates thereof in form and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other independent certified public accountants of any subsidiary of any of the Company or of any business acquired by any of the Company or the Guarantors for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the managing underwriter or underwriters on behalf of any underwriters, such letters 22 -20- to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt securities similar to the Notes and such other matters as may be reasonably requested by the managing underwriter or underwriters; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to said Section. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. (o) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be (collectively, the "Inspectors"), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and the Guarantors and their respective subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Company and the Guarantors and their respective subsidiaries to supply all information in each case reasonably requested by any such Inspector in connection with such Registration Statement. Records which the Company and the Guarantors determine, in good faith, to be confidential and any Records which they notify the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a material misstatement or material omission in such Registration Statement, (ii) the release of such Records is ordered pursuant 23 -21- to a subpoena or other order from a court of competent jurisdiction or (iii) the information in such Records has been made generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer or underwriter will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company or for any purpose other than in connection with such Registration Statement unless and until such is made generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give prompt notice to the Company and allow the Company to undertake appropriate action to prevent disclosure of the Records deemed confidential at their expense. (p) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a), as the case may be, to be qualified under the TIA not later than the effective date of the Exchange Registration Statement or the first Registration Statement relating to the Registrable Notes; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Notes, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner. (q) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first 24 -22- fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said 12-month periods. (r) Upon consummation of an Exchange Offer or a Private Exchange, obtain an opinion of counsel to the Company and the Guarantors, in a form customary for underwritten offerings of debt securities similar to the Notes, addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer or the Private Exchange, as the case may be, and which includes an opinion that (i) each of the Company and the Guarantors has duly authorized, executed and delivered the Exchange Notes and Private Exchange Notes and the related indenture and (ii) each of the Exchange Notes or the Private Exchange Notes, as the case may be, and related indenture constitute a legal, valid and binding obligation of each of the Company and the Guarantors, enforceable against each of the Company and the Guarantors in accordance with its respective terms (with customary exceptions). (s) If an Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Company and the Guarantors (or to such other Person as directed by the Company and the Guarantors) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, the Company and the Guarantors shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being canceled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be; and, in no event shall such Registrable Notes be marked as paid or otherwise satisfied. (t) Cooperate with each seller of Registrable Notes covered by any Registration Statement and the managing underwriter(s), if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"). (u) Use their respective best efforts to take all other reasonable steps necessary to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby. 25 -23- The Company and the Guarantors may require each seller of Registrable Notes or Participating Broker-Dealer as to which any registration is being effected to furnish to the Company and the Guarantors such information regarding such seller or Participating Broker-Dealer and the distribution of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, as the Company and the Guarantors may, from time to time, reasonably request. The Company may exclude from such registration the Registrable Notes of any seller or Participating Broker-Dealer who fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such seller not materially misleading. Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k), or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event the Company shall give any such notice, each of the Effectiveness Period and the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) or (y) the Advice. 6. Registration Expenses (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Company and the Guarantors shall be borne by the Company and the Guaran- 26 -24- tors, jointly and severally, whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions in the United States (x) where the Holders of Registrable Notes are located, in the case of the Exchange Notes, or (y) as provided in Section 5(h), in the case of Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is reasonably requested by the managing underwriter or underwriters, if any, or, in respect of Registrable Notes or Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable Period, if reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Notes included in any Registration Statement or of such Exchange Notes, as the case may be), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and fees and disbursements of special counsel for the sellers of Registrable Notes (subject to the provisions of Section 6(b)), (v) fees and disbursements of all independent certified public accountants referred to in Section 5(n)(iii) (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) rating agency fees, (vii) Securities Act liability insurance, if the Company and/or the Guarantors desire such insurance, (viii) fees and expenses of the Trustee, (ix) fees and expenses of all other Persons retained by the Company and/or the Guarantors, (x) internal expenses of the Company and the Guarantors (including, without limitation, all salaries and expenses of officers and employees of the Company and the Guarantors performing legal or accounting duties), (xi) the expense of any annual audit, (xii) the fees and expenses incurred in connection with any listing of the securities to be registered on any securities exchange and (xiii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agree- 27 -25- ments, securities sales agreements, indentures and any other documents necessary in order to comply with this Agreement. (b) In connection with any Shelf Registration hereunder, the Company and the Guarantors, jointly and severally, shall reimburse the Holders of the Registrable Notes being registered in such registration for the reasonable fees and disbursements of not more than one counsel (in addition to appropriate local counsel) chosen by the Holders of a majority in aggregate principal amount of the Registrable Notes to be included in such Registration Statement and other reasonable and documented out-of-pocket expenses of the Holders of Registrable Notes incurred in connection with the registration of the Registrable Notes. The Company and the Guarantors shall not have any obligation to pay any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities. 7. Indemnification (a) Each of the Company and the Guarantors, jointly and severally, agrees to indemnify and hold harmless each Holder of Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, the officers and directors of each such Person, and each Person, if any, who controls any such Person within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable and documented legal fees and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary Prospectus, or caused by, arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Participant furnished to the Company in writing by such Participant expressly for use therein; provided that the foregoing indemnity with respect to any preliminary Prospectus shall not inure to the benefit of any Participant (or to the benefit of an officer or director of such Participant or any 28 -26- Person controlling such Participant) from whom the Person asserting any such losses, claims, damages or liabilities purchased Registrable Notes or Exchange Notes if such untrue statement or omission or alleged untrue statement or omission made in such preliminary Prospectus is eliminated or remedied in the related Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) and a copy of the related Prospectus (as so amended or supplemented) shall have been furnished to such Participant at or prior to the sale of such Registrable or Exchange Notes, as the case may be, to such Person. (b) Each Participant will be required to agree, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors, their respective directors and officers and each Person who controls any of the Company or the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantors to each Participant and shall have the rights and duties given to the Company and the Guarantors in paragraph (c) of this Section 7 (except that if the Company and the Guarantors shall have assumed the defense thereof, such Participant shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Participant), but only with reference to information relating to such Participant furnished to the Company and the Guarantors in writing by such Participant expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary Prospectus. The liability of any Participant under this paragraph (b) shall in no event exceed the proceeds received by such Participant from sales of Registrable Notes or Exchange Notes giving rise to such obligations. (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) of this Section 7, such Person (the "Indemnified Person") shall promptly notify the Person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon request of the Indemnified Person, shall retain one counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may reasonably designate in such proceeding and shall pay the reasonable fees and expenses incurred by such counsel related to such proceeding. In any such 29 -27- proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed in writing to the contrary, (ii) the Indemnifying Person has failed to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and such Indemnified Person shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to any such Indemnifying Person. It is understood that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate law firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the Participants and such control Persons of Participants shall be designated in writing by Participants who sold a majority in interest of Registrable Notes and Exchange Notes sold by all such Participants and any such separate firm for the Company and the Guarantors, their directors, their officers and such control Persons of the Company and the Guarantors shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its prior written consent, but if settled with such consent or if there is a final judgment for the plaintiff for which the Indemnified Person is entitled to indemnification pursuant to this Agreement, the Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for reasonable fees and expenses incurred by counsel as contemplated by the third sentence of this paragraph, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided, however, that the Indemnifying Person shall not be liable for any settlement effected without its consent pursuant to this sentence if the Indemnifying Party is contesting, in good faith, the request for reimbursement. No Indemnifying Person shall, without the prior written consent of 30 -28- the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release (or any other release reasonably acceptable to the Indemnified Person) of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in paragraphs (a) and (b) of this Section 7 is unavailable to an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein (other than as a result of the proviso set forth in Section 7(a)), then each Indemnifying Person under such paragraphs, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Company and the Guarantors on the one hand and the Participants on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and the Participants on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Participants and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Participants were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Participant be required to contribute any amount in excess of the amount by which proceeds received by such Participant from sales of Registrable Notes or 31 -29- Exchange Notes exceeds the amount of any damages that such Participant has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (f) The indemnity and contribution agreements contained in this Section 7 will be in addition to any liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above. 8. Rules 144 and 144A Each of the Company and the Guarantors covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Notes, make publicly available other information of a like nature so long as necessary to permit sales pursuant to Rule 144 or Rule 144A. Each of the Company and the Guarantors further covenants that so long as any Registrable Notes remain outstanding to make available to any Holder of Registrable Notes in connection with any sale thereof, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Notes pursuant to (a) such Rule 144A, or (b) any similar rule or regulation hereafter adopted by the SEC. 9. Underwritten Registrations If any of the Registrable Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banking firm or firms that will underwrite the offering and the manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Notes included in such offering and shall be reasonably acceptable to the Company and the Guarantors. No Holder of Registrable Notes may participate in any underwritten offering hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes 32 -30- and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 10. Miscellaneous (a) Remedies. In the event of a breach by the Company or any Guarantor of any of its obligations under this Agreement, other than the occurrence of an event which requires payment of Additional Interest, each Holder of Registrable Notes, in addition to being entitled to exercise all rights provided herein, in the Indenture or, in the case of the Initial Purchasers, in the Purchase Agreement or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. Each of the Company and the Guarantors, jointly and severally, agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees, jointly and severally, that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) Enforcement. The Trustee shall be authorized to enforce the provisions of this Agreement for the ratable benefit of the Holders. (c) No Inconsistent Agreements. None of the Company or the Guarantors has entered, as of the date hereof, and the Company and the Guarantors shall not enter, after the date of this Agreement, into any agreement with respect to any of their securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. None of the Company or the Guarantors has entered or will enter into any agreement with respect to any of its securities which will grant to any Person piggy-back rights with respect to a Registration Statement required to be filed under this Agreement. (d) Adjustments Affecting Registrable Notes. Neither the Company nor the Guarantors shall, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration undertaken pursuant to this Agreement. (e) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not 33 -31- be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority of the then outstanding aggregate principal amount of Registrable Notes. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold by such Holders pursuant to such Registration Statement, provided that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. (f) Notices. All notices and other communications (including without limitation any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day courier or telecopier: (i) if to a Holder of Registrable Notes or any Participating Broker-Dealer, at the most current address given by the Trustee to the Company; and (ii) if to the Company or the Guarantors, to Hayes Wheels International, Inc., 38341 Huron River Drive, Romulus, Michigan 48174, Attention: General Counsel and with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, One Rodney Square, Wilmington, Delaware 19801, Attention: Robert B. Pincus, Esq. All such notices and communications shall be deemed to have been duly given: (i) when delivered by hand, if personally delivered; (ii) five business days after being deposited in the mail, postage prepaid, if mailed; (iii) one business day after being timely delivered to a next-day courier; and (iv) when receipt is acknowledged by the addressee, if telecopied. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee under the Indenture at the address specified in such Indenture. 34 -32- (g) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Registrable Notes. (h) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (i) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (J) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. (k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. (l) Entire Agreement. This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final expression of their agreement, and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. (m) Joint and Several Obligations. Unless otherwise stated herein, each of the obligations of the Company and the Guarantors under this Agreement shall be joint and several obligations of each of them. 35 -33- (n) Notes Held by the Company or their Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Company or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 36 -34- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation By:____________________________________ Name: Title: Guarantors: HAYES WHEELS INTERNATIONAL-CALIFORNIA, INC., a Delaware corporation By:____________________________________ Name: Title: HAYES WHEELS INTERNATIONAL-GEORGIA, INC., a Delaware corporation By:____________________________________ Name: Title: HAYES WHEELS INTERNATIONAL-INDIANA, INC., a Delaware corporation By:____________________________________ Name: Title: 37 -35- HAYES WHEELS INTERNATIONAL-MEXICO, INC., a Delaware corporation By:____________________________________ Name: Title: HAYES WHEELS INTERNATIONAL-MICHIGAN, INC., a Delaware corporation By:____________________________________ Name: Title: MOTOR WHEEL CORPORATION, an Ohio corporation By:____________________________________ Name: Title MWC ACQUISITION SUB, INC., a Delaware corporation By:____________________________________ Name: Title: 38 -36- The foregoing Agreement is hereby confirmed and accepted as of the date first above written. CIBC WOOD GUNDY SECURITIES CORP. By:_________________________________ Name: Title: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By:_________________________________ Name: Title: EX-12.1 7 RATIO OF EARNINGS/FIXED CHARGES 1 EXHIBIT 12.1 HAYES WHEELS INTERNATIONAL, INC. RATIO OF EARNINGS TO FIXED CHARGES (unaudited) (Millions of dollars except ratios)
Pro Forma Year Year Year Year Year Year Quarter Quarter Ended Ended Ended Ended Ended Ended Ended Ended Jan. 31, Jan. 31, Jan. 31, Jan. 31, Jan. 31, Jan. 31, Apr. 30, Apr. 30, 1993 1994 1995 1996 1997 1997 1996 1997 -------- -------- -------- -------- -------- ---------- ---------- --------- Earnings: Earnings (loss) before taxes on income and minority interest.... $ 7.8 $42.2 $49.9 $46.2 ($102.0) ($122.6) $9.9 $8.8 Interest expense: Bank borrowings and long-term debt....... 33.8 13.6 13.4 15.0 48.5 73.6 3.6 18.4 Rentals (1)............ 0.5 1.0 2.0 2.6 4.6 6.8 0.8 1.3 ------ ----- ----- ----- ------ ------ ----- ----- 34.3 14.6 15.4 17.6 53.1 80.4 4.4 19.7 Earnings before interest expense, taxes on income and minority interest............... $42.1 $56.8 $65.3 $63.8 ($48.9) ($42.2) $14.3 $28.5 ===== ===== ===== ===== ====== ====== ===== ===== Fixed charges: Bank borrowings and long-term debt....... $33.8 $13.6 $13.4 $15.0 $48.5 $73.6 $3.6 $18.4 Rentals (1)............ 0.5 1.0 2.0 2.6 4.6 6.8 0.8 1.3 ----- ----- ----- ----- ------ ------ ----- ----- Total fixed charges.. $34.3 $14.6 $15.4 $17.6 $53.1 $80.4 $4.4 $19.7 ===== ===== ===== ===== ====== ====== ===== ===== Ratio of earnings to fixed charges.......... 1.23 3.89 4.24 3.63 (0.92) (0.52) 3.25 1.35 ===== ===== ===== ===== ====== ====== ===== ===== Coverage deficiency on fixed charges.......... N/A N/A N/A N/A 102.0 122.6 N/A N/A ====== ===== ===== ===== ====== ====== ===== =====
- -------------------------------- (1) Estimated interest component of rent expense. EX-23.1 8 CONSENT OF KPMG PEAT MARWICK 1 [KPMG PEAT MARWICK LETTERHEAD] EXHIBIT 23.1 CONSENT OF KPMG PEAT MARWICK LLP The Boards of Directors Hayes Wheels International, Inc.: We consent to the use of our report dated February 25, 1997, related to the consolidated balance sheets of Hayes Wheels International, Inc. and subsidiaries as of January 31, 1997 and 1996, and the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended January 31, 1997, incorporated by reference herein, and to the references to our firm under the headings "Summary Historical Financial Information", and "Experts" in the Registration Statement (Form S-4) dated August 25, 1997. KPMG PEAT MARWICK LLP Detroit, Michigan August 25, 1997 EX-23.2 9 CONSENT OF KPMG DEUTSCHE 1 EXHIBIT 23.2 [KPMG DEUTSCHE TREUHAND-GESELLSCHAFT LETTERHEAD] THE BOARD OF DIRECTORS HAYES WHEELS INTERNATIONAL, INC.: We consent to the use of our report dated May 21, 1997, related to the consolidated balance sheets of Lemmerz Holding GmbH and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of earnings, shareholders' equity, and cash flows for each of the years then ended, incorporated by reference herein, and to the references to our firm under the headings "Summary Historical Financial Information", and "Experts" in the Registration Statement (Form S-4) dated August 25, 1997. KPMG Deutsche Treuhand - Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. Cologne, Germany August 25, 1997 EX-23.3 10 CONSENT OF ERNST & YOUNG LLP 1 [ERNST & YOUNG LLP LETTERHEAD] EXHIBIT 23.3 CONSENT OF ERNST & YOUNG LLP We consent to the reference to our firm under the caption "Experts" and to the use of our report dated February 23, 1996, except for Note O, as to which the date is March 28, 1996, with respect to the consolidated financial statements of MWC Holdings, Inc. incorporated by reference in the Registration Statement (Form S-4 dated August 25, 1997) and the related Prospectus of Hayes Wheels International, Inc. and subsidiaries for the registration of $400,000,000 Senior Subordinated Notes. ERNST & YOUNG LLP Detroit, Michigan August 25, 1997 EX-25.1 11 FORM T-1 1 EXHIBIT 25.1 THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d) of REGULATION S-T ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ] ____________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code)
____________________ HAYES WHEELS INTERNATIONAL, INC. (Exact name of obligor as specified in its charter) Delaware 13-3384636 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 38481 Huron River Drive Romulus, Michigan 48174 (Address of principal executive offices) (Zip code)
______________________ 9 1/8% Series B Senior Subordinated Notes Due 2007 (Title of the indenture securities) ================================================================================ 2 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(D). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 3 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. - 3 - 4 SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 21st day of August, 1997. THE BANK OF NEW YORK By: /s/THOMAS E. TABOR -------------------------- Name: THOMAS E. TABOR Title: ASSISTANT TREASURER -4- 5 EXHIBIT 7 ________________________________________________________________________________ Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1997, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin .................. $ 8,249,820 Interest-bearing balances .......... 1,031,026 Securities: Held-to-maturity securities ........ 1,118,463 Available-for-sale securities ...... 3,005,838 Federal funds sold and Securities pur- chased under agreements to resell...... 3,100,281 Loans and lease financing receivables: Loans and leases, net of unearned income .................32,895,077 LESS: Allowance for loan and lease losses ..............633,877 LESS: Allocated transfer risk reserve........................429 Loans and leases, net of unearned income, allowance, and reserve 32,260,771 Assets held in trading accounts ...... 1,715,214 Premises and fixed assets (including capitalized leases) ................ 684,704 Other real estate owned .............. 21,738 Investments in unconsolidated subsidiaries and associated companies .......................... 195,761 Customers' liability to this bank on acceptances outstanding ............ 1,152,899 Intangible assets .................... 683,503 Other assets ......................... 1,526,113 ------------ Total assets ......................... $ 54,746,131 ============ LIABILITIES Deposits: In domestic offices ................ $ 25,614,961 Noninterest-bearing ......10,564,652 Interest-bearing .........15,050,309 In foreign offices, Edge and Agreement subsidiaries, and IBFs ... 15,103,615 Noninterest-bearing .........560,944 Interest-bearing .........14,542,671 Federal funds purchased and Securities sold under agreements to repurchase. 2,093,286 Demand notes issued to the U.S. Treasury ........................... 239,354 Trading liabilities .................. 1,399,064 Other borrowed money: With remaining maturity of one year or less .......................... 2,075,092 With remaining maturity of more than one year ......................... 20,679 Bank's liability on acceptances exe- cuted and outstanding .............. 1,160,012 Subordinated notes and debentures .... 1,014,400 Other liabilities .................... 1,840,245 ------------ Total liabilities .................... 50,560,708 ------------ EQUITY CAPITAL Common stock ........................ 942,284 Surplus ............................. 731,319 Undivided profits and capital reserves .......................... 2,544,303 Net unrealized holding gains (losses) on available-for-sale securities ........................ (19,449) Cumulative foreign currency transla- tion adjustments .................. (13,034) ------------ Total equity capital ................ 4,185,423 ------------ Total liabilities and equity capital ........................... $ 54,746,131 =============
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Alan R. Griffith J. Carter Bacot Thomas A. Renyi Directors __________________________________________________________________ EX-25.2 12 FORM T-1 1 EXHIBIT 25.2 THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d) OF REGULATION S-T. ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ] ____________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code)
____________________ HAYES WHEELS INTERNATIONAL, INC. (Exact name of obligor as specified in its charter) Delaware 13-3384636 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 38481 Huron River Drive Romulus, Michigan 48174 (Address of principal executive offices) (Zip code)
______________________ 9 1/8% Series B Senior Subordinated Notes Due 2007 (Title of the indenture securities) ================================================================================ 2 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(D). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 3 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. - 3 - 4 SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 21st day of August, 1997. THE BANK OF NEW YORK By: /s/THOMAS E. TABOR -------------------------- Name: THOMAS E. TABOR Title: ASSISTANT TREASURER -4- 5 EXHIBIT 7 ________________________________________________________________________________ Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1997, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin .................. $ 8,249,820 Interest-bearing balances .......... 1,031,026 Securities: Held-to-maturity securities ........ 1,118,463 Available-for-sale securities ...... 3,005,838 Federal funds sold and Securities pur- chased under agreements to resell...... 3,100,281 Loans and lease financing receivables: Loans and leases, net of unearned income .................32,895,077 LESS: Allowance for loan and lease losses ..............633,877 LESS: Allocated transfer risk reserve........................429 Loans and leases, net of unearned income, allowance, and reserve 32,260,771 Assets held in trading accounts ...... 1,715,214 Premises and fixed assets (including capitalized leases) ................ 684,704 Other real estate owned .............. 21,738 Investments in unconsolidated subsidiaries and associated companies .......................... 195,761 Customers' liability to this bank on acceptances outstanding ............ 1,152,899 Intangible assets .................... 683,503 Other assets ......................... 1,526,113 ------------ Total assets ......................... $ 54,746,131 ============ LIABILITIES Deposits: In domestic offices ................ $ 25,614,961 Noninterest-bearing ......10,564,652 Interest-bearing .........15,050,309 In foreign offices, Edge and Agreement subsidiaries, and IBFs ... 15,103,615 Noninterest-bearing .........560,944 Interest-bearing .........14,542,671 Federal funds purchased and Securities sold under agreements to repurchase. 2,093,286 Demand notes issued to the U.S. Treasury ........................... 239,354 Trading liabilities .................. 1,399,064 Other borrowed money: With remaining maturity of one year or less .......................... 2,075,092 With remaining maturity of more than one year ......................... 20,679 Bank's liability on acceptances exe- cuted and outstanding .............. 1,160,012 Subordinated notes and debentures .... 1,014,400 Other liabilities .................... 1,840,245 ------------ Total liabilities .................... 50,560,708 ------------ EQUITY CAPITAL Common stock ........................ 942,284 Surplus ............................. 731,319 Undivided profits and capital reserves .......................... 2,544,303 Net unrealized holding gains (losses) on available-for-sale securities ........................ (19,449) Cumulative foreign currency transla- tion adjustments .................. (13,034) ------------ Total equity capital ................ 4,185,423 ------------ Total liabilities and equity capital ........................... $ 54,746,131 =============
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Alan R. Griffith J. Carter Bacot Thomas A. Renyi Directors __________________________________________________________________ -----END PRIVACY-ENHANCED MESSAGE-----