EXHIBIT 4.1
EXECUTION COPY
PURCHASE AGREEMENT
HLI Operating Company, Inc.
$250,000,000
10 1/2% Senior Notes Due 2010
Purchase Agreement
New York, New York
May 22, 2003
Citigroup Global Markets Inc.
Xxxxxx Brothers Inc.
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
HLI Operating Company, Inc., a corporation organized under the
laws of the State of Delaware (the "Company"), proposes to issue and sell to the
several parties named in Schedule I hereto (the "Initial Purchasers"), for whom
you (the "Representatives") are acting as representatives, $250,000,000
principal amount of its 10 1/2% Senior Notes Due 2010 (the "Notes," and together
with the Guarantees (as defined below), the "Securities"). The Securities are to
be issued under an indenture (the "Indenture"), dated as of June 3, 2003, among
the Company and each of the Guarantors (as defined below) and U.S. Bank National
Association, as trustee (the "Trustee"). The Securities will have the benefit of
a registration rights agreement (the "Registration Rights Agreement"), to be
dated as of the Closing Date (as defined below), among the Company, the
Guarantors and the Initial Purchasers, pursuant to which the Company and the
Guarantors have agreed to register a new series of notes (the "Exchange Notes")
and related guarantees (the "Exchange Guarantees," and, together with the
Exchange Notes, the "Exchange Securities") under the Act subject to the terms
and conditions therein specified. Pursuant to the Registration Rights Agreement,
the Exchange Securities will be offered in exchange for the Securities (the
"Registered Exchange Offer"). The Notes will be unconditionally guaranteed (the
"Guarantees") by the Company's direct and indirect parent companies and by each
of the Company's direct and indirect domestic Subsidiaries set forth on Schedule
II hereto (collectively, the "Guarantors"). To the extent there are no
additional parties listed on Schedule I other than you, the term Representatives
as used herein shall mean you as the Initial Purchasers, and the terms
Representatives and Initial Purchasers shall mean either the singular or plural
as the context requires. The use of the neuter in this Agreement shall include
the feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
The Securities are being offered and sold in connection with
the emergence of Xxxxx Lemmerz International, Inc., a corporation organized
under the laws of the State of Delaware ("HLI"), thirty of its wholly-owned
domestic Subsidiaries and one wholly-owned Mexican Subsidiary from bankruptcy
pursuant to the Plan of Reorganization (as defined below), which is expected to
be effective simultaneously with the Closing Date. Concurrently with the Closing
Date, the Company and each of the Guarantors intends to enter into the New
Credit Facility. Pursuant to the Plan of Reorganization, and effective
simultaneously with the closing of this offering and sale of the Securities (the
"Offering"), HLI will merge with and into HLI Operating Company, Inc. with HLI
Operating Company, Inc. being the surviving entity, with the result that all
businesses, Subsidiaries and other assets and liabilities held, directly or
indirectly, by HLI prior to such merger are held by HLI Operating Company, Inc.
following the merger (the "Merger"). References to the Company mean both the
Company following the Merger and HLI prior to the Merger, and references to
Subsidiaries of the Company or Subsidiaries of Holdco (as defined below) include
HLI's Subsidiaries before and after the Merger.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated May 12, 2003 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto, the
"Preliminary Memorandum"), and a final offering memorandum, dated May 27, 2003
(as amended or supplemented at the Execution Time, including any and all
exhibits thereto, the "Final Memorandum"). Each of the Preliminary Memorandum
and the Final Memorandum sets forth certain information concerning the Company,
the Guarantors and the Securities. The Company hereby confirms that it has
authorized the use of the Preliminary Memorandum and the Final Memorandum, and
any amendment or supplement thereto, in connection with the offer and sale of
the Securities by the Initial Purchasers.
1. Representations and Warranties of the Company and the
Guarantors. The Company and the Guarantors, jointly and severally, represent and
warrant to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof,
did not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. At the Execution Time and on the Closing Date, the Final
Memorandum did not, and will not (and any amendment or supplement
thereto, at the date thereof, on the Closing Date will not), contain
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company and the Guarantors make no representation or
warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein.
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(b) None of the Company, the Guarantors or any of
their Subsidiaries, nor any person acting on their behalf (other than
the Initial Purchasers or anyone acting on their behalf, as to whom the
Company makes no representation) has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of
the Securities under the Act.
(c) None of the Company, the Guarantors or any of
their Subsidiaries, nor any person acting on its or their behalf (other
than the Initial Purchasers or anyone acting on their behalf, as to
whom the Company makes no representation) has engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in
the United States.
(d) The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Act.
(e) None of the Company, the Guarantors or any of
their Subsidiaries, nor any person acting on their behalf (other than
the Initial Purchasers or anyone acting on their behalf, as to whom the
Company makes no representation) has engaged in any directed selling
efforts with respect to the Securities, and each of them has complied
with the offering restrictions requirement of Regulation S. Terms used
in this paragraph and not otherwise defined in this Agreement have the
meanings given to them by Regulation S.
(f) None of the Company nor any of the Guarantors is,
nor after giving effect to the Transactions and the application of the
proceeds thereof as described under the heading "Use of Proceeds" in
the Final Memorandum will be, an "investment company" within the
meaning of the Investment Company Act.
(g) HLI is subject to and in compliance in all
material respects with the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act.
(h) None of the Company, the Guarantors or any of
their Subsidiaries has paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities (except
as contemplated by this Agreement).
(i) None of the Company, the Guarantors or any of
their Subsidiaries has, directly or indirectly, taken any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(j) The Company, the Guarantors and each of their
Subsidiaries has been duly incorporated or organized and is validly
existing as a corporation, limited liability company or partnership in
good standing (to the extent such concept exists) under the laws of the
jurisdiction in which it is incorporated or organized with full
corporate, limited liability company or partnership power and authority
to own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Memorandum, and is duly
qualified to do business as a foreign corporation, limited
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liability company or partnership and is in good standing under the laws
of each jurisdiction that requires such qualification; except where the
failure to be in good standing or duly qualified, incorporated or
organized, or to have such power or authority (i) would not reasonably
be expected to have a material adverse effect on the performance of
this Agreement, the Indenture, the Securities or the Registration
Rights Agreement, or the consummation of any of the transactions
contemplated hereby or thereby; or (ii) would not reasonably be
expected to have a Material Adverse Effect.
(k) All the outstanding shares of Capital Stock of
each of the Company, the Guarantors and each of their Subsidiaries have
been duly authorized and issued and are fully paid and, to the extent
applicable, nonassessable, and, except as otherwise set forth in the
Final Memorandum, (and except directors' qualifying shares and other de
minimis amounts of shares required to be issued to third parties
pursuant to local law requirements) all outstanding shares of the
Subsidiaries of the Company are owned by the Company either directly or
through wholly-owned Subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(l) Schedule II hereto sets forth all the Company's
direct and indirect parent companies and each of the Company's direct
and indirect domestic Subsidiaries as of the date hereof.
(m) The authorized equity capitalization of Holdco
after the effectiveness of the Merger is as set forth in the Final
Memorandum.
(n) The statements in the Final Memorandum under the
headings "Risk Factors - Legal proceedings - we will be subject to
claims made after the date that we filed for bankruptcy and other
claims that are not discharged in the bankruptcy proceeding, which
could have a significant negative impact on our results of operations
and profitability," "Risk Factors - Legal proceedings - we are being
investigated by the Securities and Exchange Commission," "Risk Factors
- Environmental matters - we are subject to potential exposure to
environmental liabilities," "Business - Environmental Compliance,"
"Business - Legal Proceedings," "The Bankruptcy Case," "Certain Related
Party Transactions," "Description of Material Debt," "Description of
the Notes," "Exchange Offer; Registration Rights," "Notice to
Investors" and "Certain U.S. Federal Income Tax Consequences to
Non-U.S. Holders" (insofar as such statements purport to summarize
certain U.S. federal income tax consequences with respect to an
investment in the Notes), fairly summarize, in all material respects,
the matters therein described.
(o) This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors.
(p) The Indenture has been duly authorized by the
Company and each of the Guarantors and, assuming due authorization,
execution and delivery thereof by the Trustee, when executed and
delivered by the Company and each of the Guarantors, will constitute a
valid and binding instrument enforceable against the Company and each
of the Guarantors in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent
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conveyance, preference or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity).
(q) The issuance of the Securities has been duly
authorized by the Company and the Guarantors and, when the global
certificates representing the Securities have been duly executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers under this
Agreement, such Securities will constitute valid, binding and
enforceable obligations of the Company and the Guarantors, entitled to
the benefits of the Indenture (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance, preference or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity).
(r) The issuance of the Exchange Securities has been
duly authorized by the Company and the Guarantors and, when the global
certificates representing the Exchange Securities have been duly
executed and authenticated in accordance with the provisions of the
Indenture and delivered to the holders of Notes in exchange therefor as
contemplated by the Registration Rights Agreement, such Exchange
Securities will constitute valid, binding and enforceable obligations
of the Company and the Guarantors, entitled to the benefits of the
Indenture (subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance, preference or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity, regardless of whether enforcement is
sought in a proceeding at law or in equity.
(s) The Registration Rights Agreement has been duly
authorized by the Company and the Guarantors and, assuming due
authorization, execution and delivery thereof by the Initial
Purchasers, when executed and delivered by the Company and each of the
Guarantors, will constitute a valid, binding and enforceable instrument
of the Company and each of the Guarantors (subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, preference or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity).
(t) The Company and each of the Guarantors has all
requisite corporate, limited liability company or partnership power and
authority, and has taken all requisite corporate, limited liability
company or partnership action necessary to enter into and perform its
obligations under this Agreement, the Indenture, the Securities,
Exchange Securities, the Registration Rights Agreement and the Merger
Agreement, to the extent it is a party thereto. Subject to compliance
by the Initial Purchasers with the representations, warranties and
agreements set forth in Section 4 of this Agreement, no consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture, the Registration
Rights Agreement or Merger Agreement, except such as will be obtained
under the Act and the Trust Indenture Act and such as may be required
under the blue sky laws of any jurisdiction and by the NASD with
respect to the PORTAL designation of the Notes, in connection with the
purchase and distribution of the Securities by the Initial Purchasers
in the manner contemplated herein and in the Xxxxx
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Memorandum and the Registration Rights Agreement and, in the case of
the Merger Agreement, the filing of the Certificate of Merger in
connection with the Merger with the Secretary of State of the State of
Delaware (which filing shall have been made on or prior to the Closing
Date).
(u) Neither the execution and delivery of this
Agreement, the Indenture, the Registration Rights Agreement or the
Merger Agreement, the issue and sale of the Securities and the Exchange
Securities, nor the consummation of any other of the transactions
herein or therein contemplated, nor the performance by the Company or
any Guarantor of its obligations hereunder or thereunder will conflict
with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or asset of the Company, the
Guarantors or any of their Subsidiaries pursuant to, (i) the
certificate of incorporation, by-laws or other organizational documents
of the Company, the Guarantors or any of their Subsidiaries; (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company, the Guarantors or any of
their Subsidiaries is a party or bound or to which their property is
subject; or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company, the Guarantors or any of their
Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company, the Guarantors or any of their Subsidiaries or any of
its or their properties, except (x) with respect to Non-material
Subsidiaries in the case of clause (i) above, for such for such
conflicts, breaches, violations or impositions that would not
reasonably be expected to have a Material Adverse Effect and (y) in the
case of clauses (ii) and (iii) above, for such conflicts, breaches,
violations or impositions that would not reasonably be expected to (1)
have a Material Adverse Effect or (2) have a material adverse effect on
the performance of this Agreement, the Indenture, the Securities, the
Exchange Securities or the Registration Rights Agreement, or the
consummation of any of the transactions contemplated hereby or thereby.
(v) The consolidated historical financial statements
and schedules of HLI and its consolidated Subsidiaries included in the
Final Memorandum present fairly in all material respects the financial
condition, results of operations and cash flows of HLI as of the dates
and for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Historical Consolidated Financial Information" in the Final
Memorandum fairly present, on the basis stated in the Final Memorandum,
the information included therein. The pro forma financial statements
included in the Final Memorandum include assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the events and items described therein on the basis,
and subject to the limitations, described therein; the related pro
forma adjustments give effect in all material respects to those
assumptions; and the pro forma adjustments reflect in all material
respects the proper application of those adjustments to the historical
financial statement amounts. The pro forma financial statements
included in the Final
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Memorandum comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act.
(w) No action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company, the Guarantors or any of their Subsidiaries or
property or, to the Company's knowledge, their directors or officers is
pending or, to the best knowledge of the Company, threatened that (i)
would reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture, the Registration Rights
Agreement or the Merger Agreement, or the consummation of any of the
transactions contemplated hereby or thereby; or (ii) would reasonably
be expected to have a Material Adverse Effect, except as set forth in
or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto).
(x) The Company, the Guarantors and each of their
Subsidiaries own, possess, license, lease or have other rights to use,
all such properties (including, without limitation, Intellectual
Property, as defined below) as are necessary to the conduct of their
respective operations as presently conducted, except where the failure
to own, possess, license, lease or have other rights to use such
property would not reasonably be expected to have a Material Adverse
Effect. Other than as described in the Final Memorandum there is no
infringement by third parties of any of the any of the Company's
patents, patent applications, trade and service marks, trade and
service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the "Intellectual Property") except such
infringements that would not reasonably be expected to have a Material
Adverse Effect.
(y) (i) Neither of the Company, the Guarantors nor
any of their Subsidiaries is in violation or default of any provision
of its certificate of incorporation, by-laws or other organizational
documents; and (ii) after giving effect to the provisions of, and the
transactions contemplated in, the Plan of Reorganization, including
those regarding, among other things, rejection and/or assumption and
cure of executory contracts and unexpired leases, neither of the
Company, the Guarantors nor any of their Subsidiaries will be in
violation or default of (a) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is
a party or bound or to which its property is subject (1) that were not
otherwise rejected during the Bankruptcy Cases, or (2) except as set
forth in the Final Memorandum or (b) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over any of them or any of their properties, as
applicable, except (x) with respect to Non-material Subsidiaries in the
case of clause (i) above, for such violations and defaults that would
not reasonably be expected to have a Material Adverse Effect and (y) in
the case of clause (ii) above, for such violations or defaults that
would not reasonably be expected to have a Material Adverse Effect.
(z) KPMG LLP, who have certified certain financial
statements of HLI and its consolidated Subsidiaries and delivered their
report with respect to the audited
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consolidated financial statements and schedules included in the Final
Memorandum, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder.
(aa) There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges required to be paid to
the U.S. or any state or locality therein in connection with the
execution, delivery and performance of this Agreement or the Indenture
by the Company and the Guarantors or the issuance or sale by the
Company or the Guarantors of the Securities or the Exchange Securities.
(bb) The Company, the Guarantors and each of their
Subsidiaries have filed all foreign, federal, state and local tax
returns that are required to be filed or have requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect) and have paid all taxes required to be
paid by them and any other assessment, fine or penalty levied against
them, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect.
(cc) No labor problem or dispute with the employees
of the Company, the Guarantors or any of their Subsidiaries exists or,
to the knowledge of the Company or any Guarantor, is overtly
threatened, and neither the Company nor any Guarantor is aware of any
existing or imminent labor disturbance by the employees of any of its
or its Subsidiaries' principal suppliers, contractors or customers,
that would reasonably be expected, in each case, to have a Material
Adverse Effect.
(dd) Since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any amendment
or supplement thereto), except as set forth in the Final Memorandum,
there has been no change that would reasonably be expected to have a
Material Adverse Effect.
(ee) The Company, the Guarantors and each of their
Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; and
there are no claims by the Company, the Guarantors or any of their
Subsidiaries under any such policy or instrument as to which any
insurance company has notified the Company, the Guarantors or any of
their Subsidiaries that it is denying or intends to deny liability or
to defend under a reservation of rights clause that would reasonably be
expected to have a Material Adverse Effect.
(ff) No Subsidiary of the Company other than Xxxxx
Lemmerz Autokola, Inc. is currently, or immediately following the
Merger will be, prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary's Capital Stock, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring any
of such Subsidiary's property or assets to the Company, or any other
Subsidiary of the Company, as the case may be, except as described in
or contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
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(gg) The Company, the Guarantors and their
Subsidiaries possess all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such licenses,
certificates, permits and other authorizations would not reasonably be
expected to have a Material Adverse Effect, and none of the Company,
any Guarantor nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(hh) The Company, the Guarantors and each of their
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accounting for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(ii) The Company, the Guarantors and each of their
Subsidiaries are (i) in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses, and (iii)
have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive or be
in compliance with required permits, licenses or other approvals and
such liability would not have a Material Adverse Effect; except as set
forth in the Final Memorandum, none of the Company, any Guarantor, nor
any of their Subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
(jj) The Company, the Guarantors and each of their
Subsidiaries have fulfilled their obligations, if any, under the
minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the
regulations and published interpretations thereunder with respect to
each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and
the Guarantors are eligible to participate, except where the failure to
fulfill such obligations would not reasonably be expected to have a
Material Adverse Effect, and each such plan is in compliance with the
presently applicable provisions of ERISA and such regulations and
published interpretations, except where the failure to be in compliance
would not reasonably be expected to have a Material Adverse Effect;
none of the Company or the Guarantors have
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incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA, except where such
liability would not reasonably be expected to have a Material Adverse
Effect.
(kk) Each of the relationships and transactions
specified in Item 404 of Regulation S-K that would have been required
to be described in a prospectus if the Offering had been registered
under the Act have been so described in the Final Memorandum (exclusive
of any amendment or supplement thereto).
(ll) HLI Holding Company, Inc., a corporation
organized under the laws of the State of Delaware ("Holdco"), is a
newly-formed entity with no operations, liabilities or assets other
than (i) holding 100% of the Capital Stock of HLI Parent Company, Inc.
("Parent") and (ii) those liabilities incurred in connection with its
formation. Parent is a newly-formed entity with no operations,
liabilities or assets other than (i) holding 100% of the Capital Stock
of the Company and (ii) those liabilities incurred in connection with
its formation.
Any certificate signed by any officer of the Company or any
Guarantor and delivered to the Representatives or counsel for the Initial
Purchasers in connection with the Offering shall be deemed a representation and
warranty by the Company or such Guarantor, as to matters covered thereby, to
each Initial Purchaser.
2. Purchase and Sale.
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company and the Guarantors
agree to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company and the Guarantors, at a
purchase price of 97.132% of the principal amount thereof, plus accrued
interest, if any, from June 3, 2003 to the Closing Date, the principal amount of
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on June 3, 2003,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Initial Purchasers against payment by the
several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the account specified by the Company. The Securities shall be delivered
in such names, forms and amounts as the Representatives shall specify and
delivery shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.
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4. Representations, Warranties and Covenants of the Initial
Purchasers. Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company and the Guarantors that:
(a) It has not offered or sold, and will not offer or
sell, any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf
has made or will make offers or sales of the Securities in the United
States by means of any form of general solicitation or general
advertising (within the meaning of Regulation D) in the United States.
(c) It is an "accredited investor" within the meaning
of Regulation D.
5. Agreements. The Company and the Guarantors agree as set
forth below, jointly and severally, with each Initial Purchaser that:
(a) The Company will furnish to each Initial
Purchaser and to counsel for the Initial Purchasers, without charge,
during the period referred to in paragraph (c) below, as many copies of
the Final Memorandum and any amendments and supplements thereto as they
may reasonably request.
(b) The Company will not amend or supplement the
Final Memorandum unless, prior thereto the Company has furnished the
Representatives with a copy of such document for their review and the
Representatives have not reasonably objected to such amendment or
supplement.
(c) If at any time prior to the completion of the
sale of the Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs 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 any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as they may
reasonably request.
(d) The Company and the Guarantors will arrange, if
necessary, for the qualification of the Securities for sale by the
Initial Purchasers under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the sale of the Securities; provided
that in no event shall
11
the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out
of the Offering, in any jurisdiction where it is not now so subject.
The Company will promptly advise the Representatives of the receipt by
the Company or any Guarantor of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(e) None of the Company, the Guarantors or any of
their Subsidiaries, nor anyone acting on their behalf (other than the
Initial Purchasers or anyone acting on their behalf, as to whom the
Company makes no representation) will, prior to completion of the
Registered Exchange Offer, resell any Securities that have been
acquired by any of them.
(f) None of the Company, the Guarantors or any of
their Subsidiaries, nor any person acting on their behalf (other than
the Initial Purchasers or anyone acting on their behalf, as to whom the
Company makes no representation) will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities under the Act.
(g) Neither the Company nor any of the Guarantors,
nor any person acting on their behalf (other than the Initial
Purchasers or anyone acting on their behalf, as to whom the Company
makes no representation) will engage in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company and the Guarantors will, during any period in which they are
not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or is not exempt from such reporting requirements pursuant
to and in compliance with Rule 12g3-2(b) under the Exchange Act,
provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser,
any information required to be provided by Rule 144A(d)(4) under the
Act. Such information will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. This covenant
is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such
restricted securities.
(i) Neither the Company, the Guarantors or any of
their Subsidiaries, nor any person acting on their behalf (other than
the Initial Purchasers or anyone acting on their behalf, as to whom the
Company makes no representation) will engage in any directed selling
efforts with respect to the Securities, and each of them will comply
with the offering restrictions requirement of Regulation S. Terms used
in this paragraph have the meanings given to them by Regulation S.
12
(j) The Company will cooperate with the
Representatives and use its best efforts to permit the Securities and
the Exchange Securities to be eligible for clearance and settlement
through The Depository Trust Company.
(k) Neither the Company, any of the Guarantors or any
of their Subsidiaries will for a period of 90 days following the
Execution Time, without the prior written consent of Citigroup, which
consent may not be unreasonably withheld, offer, sell or contract to
sell, or otherwise dispose of (or enter into any transaction that is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
Affiliate of the Company or any person in privity with the Company or
any Affiliate of the Company), directly or indirectly, or announce the
offering of, any debt securities issued or guaranteed by the Company
other than the Securities or the Exchange Securities.
(l) Neither the Company, any of the Guarantors or any
of their Subsidiaries will take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(m) The Company will apply the net proceeds from the
sale of the Notes in a manner consistent with the heading "Use of
Proceeds" in the Final Memorandum.
(n) The Company will pay the costs and expenses
relating to the following matters: (i) the preparation of the Indenture
and the Registration Rights Agreement, the issuance of the Securities
and the Exchange Securities and the fees of the Trustee; (ii) the
preparation, printing or reproduction of the Preliminary Memorandum and
Final Memorandum and each amendment or supplement to either of them;
(iii) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such
copies of the Preliminary Memorandum and Final Memorandum, and all
amendments or supplements to either of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale
of the Securities; (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any
stamp or transfer taxes or duties or other similar fees or charges
required to be paid in connection with the execution, delivery and
performance of this Agreement or the Indenture by the Company or the
Guarantors of the Securities or the Exchange Securities; (v) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities and the Exchange Securities; (vi) any registration or
qualification of the Securities for offer and sale under the securities
or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers
relating to such registration and qualification); (vii) admitting the
Notes and Exchange Notes for trading in the PORTAL Market; (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and
13
the fees and expenses of counsel (including local and special counsel)
for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder. It is
understood, however, that, except as provided in this Section 5 and
Sections 7 and 8 of this Agreement, the Initial Purchasers will pay all
of their own costs and expenses, including the fees and expenses of
their counsel.
(o) On the Closing Date, the Company shall cause each
entity that issues a Guaranty in respect of the Notes which is not then
a party to this Agreement to execute and deliver an instrument of
accession in form and substance reasonably satisfactory to the Initial
Purchasers, joining such entity as a Guarantor under this Agreement.
(p) On or prior to the Closing Date, the Company
shall have been advised by the NASD's PORTAL Market that the Notes and
the Exchange Notes have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors contained herein at the Execution Time and the
Closing Date pursuant to Section 3 hereof, to the accuracy of the statements of
the Company and the Guarantors made in any certificates pursuant to the
provisions hereof, to the performance by the Company and the Guarantors of their
obligations hereunder and to the following additional conditions:
(a) The Initial Purchasers shall have received an
opinion from Xxxxxxx X. Xxxxxx, general counsel for the Company, dated
the Closing Date and addressed to the Representatives, to the effect
that:
(i) each of the Company, the Guarantors
and each of their domestic Subsidiaries has been duly
incorporated or organized and is validly existing as a
corporation, limited liability company or partnership in good
standing under the laws of the jurisdiction in which it is
incorporated or organized, with full corporate, limited
liability company or partnership power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Memorandum, and
is duly qualified to do business as a foreign corporation,
limited liability company or partnership and is in good
standing (to the extent such concept exists) under the laws of
each jurisdiction that requires such qualification; except
where the failure to be duly qualified, incorporated or
organized, in good standing, or to have such power or
authority (i) would not reasonably be expected to have a
material adverse effect on the performance of this Agreement,
the Indenture, the Securities, the Registration Rights
Agreement or the Merger Agreement or the consummation of any
of the transactions contemplated hereby or thereby; or (ii)
would not reasonably be expected to have a Material Adverse
Effect;
(ii) all the outstanding shares of the
Company, the Guarantors and each of their domestic
Subsidiaries have been duly authorized and issued and
14
are fully paid and nonassessable, and, except as otherwise set
forth in the Final Memorandum (and except directors'
qualifying shares and other de minimis amounts of shares
required to be issued to third parties pursuant to local law
requirements), all outstanding shares of Capital Stock of the
domestic Subsidiaries are owned by the Company either directly
or through wholly-owned Subsidiaries free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interest,
claim, lien or encumbrance, except where the failure to be so
authorized and issued, fully paid and nonassessable, owned by
the Company or free and clear of any such perfected security
interests, or any other interests, claims, liens or
encumbrances would not reasonably be expected to have a
Material Adverse Effect;
(iii) after the effectiveness of the
Merger, Holdco will have an authorized equity capitalization
as set forth in the Final Memorandum;
(iv) The statements in the Final
Memorandum under the headings "Risk Factors - Legal
proceedings - we will be subject to claims made after the date
that we filed for bankruptcy and other claims that are not
discharged in the bankruptcy proceeding, which could have a
significant negative impact on our results of operations and
profitability," "Risk Factors - Legal proceedings - we are
being investigated by the Securities and Exchange Commission,"
"Risk Factors - Environmental matters - we are subject to
potential exposure to environmental liabilities," "Business -
Environmental Compliance," "Business - Legal Proceedings,"
"The Bankruptcy Case," "Certain Related Party Transactions"
and "Description of Material Debt," fairly summarize such
consequences in all material respects;
(v) this Agreement has been duly
authorized, executed and delivered by the Company and each of
the Guarantors;
(vi) the Indenture has been duly
authorized, executed and delivered by the Company and each of
the Guarantors, and assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and
binding agreement enforceable against the Company and each of
the Guarantors in accordance with its terms;
(vii) the Notes have been duly authorized
and executed by the Company, and when issued and delivered by
the Company against payment therefor in accordance with the
terms of this Agreement, the Notes will constitute valid and
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in
accordance with their terms;
(viii) the Guarantee has been duly
authorized by each of the Guarantors and when the Notes are
issued and delivered by the Company against payment therefor
in accordance with the terms of the this Agreement, the
Guarantee will constitute the valid and binding obligation of
such Guarantors, enforceable against such Guarantors in
accordance with its terms;
15
(ix) the issuance of the Exchange Notes
has been duly authorized by the Company, and when the Exchange
Notes are executed, authenticated, issued and delivered in
exchange for the Notes in accordance with the provisions of
the Indenture, the Registration Rights Agreement and the
Exchange Offer (as defined in the Registration Rights
Agreement), such Exchange Notes will constitute valid and
binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in
accordance with their terms;
(x) the Exchange Guarantee has been duly
authorized by each of the Guarantors and when the Exchange
Notes are executed, authenticated, issued and delivered in
exchange for the Notes in accordance with the provisions of
the Indenture, the Registration Rights Agreement and the
Exchange Offer, the Exchange Guarantee will constitute the
valid and binding obligation of such Guarantors, enforceable
against such Guarantors in accordance with its terms;
(xi) the Registration Rights Agreement has
been duly authorized, executed and delivered by the Company
and each of the Guarantors, and assuming due authorization,
execution and delivery thereof by the Initial Purchasers,
constitutes a valid and binding agreement of the Company and
the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms;
(xii) to the knowledge of such counsel,
there is no pending or threatened action, suit or proceeding
by or before any court or governmental agency, authority or
body or any arbitrator involving the Company, the Guarantors
or any of the Subsidiaries or their officers, directors or
property of a character required to be disclosed in a
registration statement on Form S-3 that is not adequately
disclosed in the Final Memorandum (assuming it were a
prospectus contained in a registration statement on Form S-3),
except in each case for such action, suit or proceedings that,
if the subject of an unfavorable decision, ruling or finding
would not reasonably be expected to have a Material Adverse
Effect;
(xiii) no facts have come to such counsel's
attention which have caused such counsel to believe that the
Final Memorandum, as of its date or as of the Closing Date,
contained or contains an untrue statement of a material fact
or omitted or omits to state any 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 in each case such counsel does not express any
view as to the financial statements, schedules and other
financial and statistical data included therein or excluded
therefrom);
(xiv) each of the Company and the
Guarantors has all requisite corporate, limited liability
company or partnership power and authority, has taken all
requisite corporate, limited liability company or partnership
action, and has received and is in compliance with all
governmental, judicial and other
16
authorizations, approvals and orders necessary to enter into
and perform its obligations under this Agreement, the
Indenture, the Securities, the Exchange Securities, the
Registration Rights Agreement and the Merger Agreement and to
consummate the transactions contemplated hereby and thereby.
Subject to compliance by the Initial Purchasers with the
representations, warranties and agreements set forth in
Section 4 of this Agreement, no consent, approval,
authorization, filing with or order of any governmental agency
or body is required in connection with consummation of the
transactions contemplated herein or therein, except such as
will be obtained under the Act and the Trust Indenture Act and
such as may be required under the blue sky or securities laws
of any jurisdiction in connection with the purchase and sale
of the Securities by the Initial Purchasers in the manner
contemplated in this Agreement and the Final Memorandum and
the Registration Rights Agreement and such other approvals
(specified in such opinion) as have been obtained; and
(xv) neither the execution and delivery of
the Indenture, this Agreement, the Registration Rights
Agreement or the Merger Agreement, the issue and sale of the
Securities or the Exchange Securities, nor the consummation of
any other of the transactions herein or therein contemplated,
nor the performance by the Company and the Guarantors of its
obligations hereunder or thereunder will conflict with, result
in a breach or violation of, or imposition of any lien, charge
or encumbrance upon any property or asset of the Company, the
Guarantors or their Subsidiaries pursuant to, (i) the
certificate of incorporation, by-laws or other organizational
documents of the Company or the Guarantors or their
Subsidiaries; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or
instrument to which the Company, the Guarantors or any of
their Subsidiaries is a party or bound or to which its or
their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the
Company, the Guarantors or any of their domestic Subsidiaries
of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or the Guarantors, except (x)
with respect to Non-material Subsidiaries in the case of
clause (i) above, for such conflicts, breaches, violations or
impositions that would not be reasonably expected to have a
Material Adverse Effect and (y) in the case of clauses (ii)
and (iii) above, for such conflicts, breaches, violations or
impositions that would not be reasonably expected to (1) have
a Material Adverse Effect or (2) have a material adverse
effect on the performance of this Agreement, the Indenture,
the Securities, the Exchange Securities or the Registration
Rights Agreement, or the consummation of any of the
transactions contemplated hereby or thereby.
Such counsel's opinion as to the validity or enforcement of any
agreements or instruments may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
17
(b) The Initial Purchasers shall have received an
opinion from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Company, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) each of the entities listed in
Schedule III hereto (collectively, the "Newly Formed
Entities") has been duly incorporated or formed, and each of
the Company, and each of the Delaware, New York and Texas
Guarantors and the Delaware non-guarantor Subsidiaries is
validly existing as a corporation or limited liability company
and in good standing under the laws of the jurisdiction in
which it is incorporated or organized with corporate or
limited liability company power and authority to execute and
deliver this Agreement, the Indenture and the Registration
Rights Agreement and to consummate the transactions
contemplated hereby and thereby; except where the failure to
be in good standing (i) would not reasonably be expected to
have a material adverse effect on the performance of this
Agreement, the Indenture, the Securities, the Registration
Rights Agreement or the Merger Agreement or the consummation
of any of the transactions contemplated hereby or thereby; or
(ii) would not reasonably be expected to have a Material
Adverse Effect;
(ii) after the effectiveness of the
Merger, Holdco will have an authorized equity capitalization
as set forth in the Final Memorandum;
(iii) all shares of capital stock of the
Newly Formed Entities as shown on the stock record books of
such Newly Formed Entities as being issued and outstanding
immediately prior to the date hereof have been duly authorized
and issued and are fully paid and nonassessable, and, based
solely on our review of the stock record books of such Newly
Formed Entities, such outstanding shares of capital stock of
the Newly Formed Entities are owned of record by the entity
set forth on Schedule III opposite the name of such Newly
Formed Entity.
(iv) Each of the Company, the Delaware
Guarantors, the New York Guarantors, the Texas Guarantors and
the Delaware non-guarantor Subsidiaries has the status set
forth in Schedule IV hereto set forth opposite the name of
such entity in the jurisdictions listed in Schedule IV hereto.
(v) the statements in the Final
Memorandum under the headings "Capitalization, " "Description
of the Notes" and "Exchange Offer; Registration Rights"
insofar as such statements purport to summarize certain
provisions of the documents referred therein, fairly summarize
such provisions in all material respects and the statements in
the Final Memorandum under the heading "Certain U.S. Federal
Income Tax Consequences to Non-U.S. Holders," insofar as such
statements purport to summarize certain U.S. federal income
tax consequences with respect to an investment in the notes,
fairly summarize such consequences in all material respects;
18
(vi) this Agreement has been duly
authorized, executed and delivered by the Company and each of
the Delaware, New York and Texas Guarantors;
(vii) the Indenture has been duly
authorized, executed and delivered by the Company and each of
the Delaware and New York Guarantors, and assuming due
authorization, execution and delivery thereof by the Trustee,
constitutes a valid and binding agreement, enforceable against
the Company and each of the Delaware, New York and Texas
Guarantors in accordance with its terms;
(viii) the Notes have been duly authorized
and executed by the Company, and when issued and delivered by
the Company against payment therefor in accordance with the
terms of this Agreement, the Notes will constitute valid and
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in
accordance with their terms;
(ix) the Guarantee has been duly
authorized by each of the Delaware, New York and Texas
Guarantors and when the Notes are issued and delivered by the
Company against payment therefor in accordance with the terms
of the this Agreement, the Guarantee will constitute the valid
and binding obligation of such Delaware, New York and Texas
Guarantors, enforceable against such Delaware, New York and
Texas Guarantors in accordance with its terms;
(x) the issuance of the Exchange Notes
has been duly authorized by the Company, and when the Exchange
Notes are executed, authenticated, issued and delivered in
exchange for the Notes in accordance with the provisions of
the Indenture, the Registration Rights Agreement and the
Exchange Offer (as defined in the Registration Rights
Agreement), such Exchange Notes will constitute valid and
binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in
accordance with their terms;
(xi) the Exchange Guarantee has been duly
authorized by each of the Delaware, New York and Texas
Guarantors and when the Exchange Notes are executed,
authenticated, issued and delivered in exchange for the Notes
in accordance with the provisions of the Indenture, the
Registration Rights Agreement and the Exchange Offer, the
Exchange Guarantee will constitute the valid and binding
obligation of such Delaware, New York and Texas Guarantors,
enforceable against such Delaware, New York and Texas
Guarantors in accordance with its terms;
(xii) the Registration Rights Agreement has
been duly authorized, executed and delivered by the Company
and each of the Delaware, New York and Texas Guarantors, and
assuming due authorization, execution and delivery thereof by
the Initial Purchasers, constitutes a valid and binding
19
agreement of the Company and the Delaware, New York and Texas
Guarantors, enforceable against the Company and the Delaware,
New York and Texas Guarantors in accordance with its terms;
(xiii) no facts have come to such counsel's
attention which have caused such counsel to believe that the
Final Memorandum, as of its date or as of the Closing Date,
contained or contains an untrue statement of a material fact
or omitted or omits to state any 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 in each case such counsel does not express any
view as to the financial statements, schedules and other
financial and statistical data included therein or excluded
therefrom);
(xiv) assuming (i) the accuracy of the
representations and warranties of the Company and each
Guarantor in Section 1 of the Purchase Agreement and of the
Initial Purchasers in Section 4 of the Purchase Agreement,
(ii) the due performance by the Company and each Guarantor of
the covenants and agreements set forth in Section 5 of the
Purchase Agreement, (iii) the Initial Purchasers' compliance
with the offering and transfer procedures and restrictions
described in the Final Memorandum, (iv) the accuracy of the
representations and warranties made in accordance with the
Final Memorandum by purchasers to whom the Initial Purchasers
initially resell the Securities and (v) that reasonable steps
have been taken to ensure that purchasers to whom the Initial
Purchasers initially resell the Securities have been informed
that the Initial Purchasers may be relying on the exemption
from the provisions of Section 5 of the Act provided by Rule
144A in connection with such sales, the offer, sale and
delivery of the Securities to the Initial Purchasers in the
manner contemplated by the Purchase Agreement and the Final
Memorandum, and the initial resale of the Securities by the
Initial Purchasers in the manner contemplated in the Final
Memorandum and the Purchase Agreement, do not require
registration under the Act, and the Indenture does not require
qualification under the Trust Indenture Act, it being
understood that such counsel does not express any opinion as
to any subsequent resale of any Security; and the Indenture
complies in all material respects with the Provisions of the
Trust Indenture Act;
(xv) none of the Company nor any of the
Guarantors is, nor after giving effect to the Transactions
will be, an "investment company" as such term is defined in
the Investment Company Act; and
(xvi) the execution and delivery by the
Company and each of the Delaware, New York and Texas
Guarantors (to the extent it is a party thereto) of this
Agreement, the Indenture, the Registration Rights Agreement or
the Merger Agreement and the consummation by the Company and
the Delaware, New York and Texas Guarantors of the
transactions contemplated hereby or thereby, including the
issuance and sale of the Securities and the Exchange
Securities, will not (i) conflict with the certificate of
incorporation, by-laws or other organizational documents of
the Company, the Delaware, New York or Texas
20
Guarantors, (ii) constitute a violation of, or a breach or
default under, the terms of the Applicable Contracts or (iii)
violate or conflict with, or result in any contravention of,
any Applicable Law or any Applicable Order, except, in the
case of clauses (ii) and (iii) above, for such breaches,
defaults, violations, conflicts or contravention that would
not be reasonably expected to (1) have a Material Adverse
Effect or (2) have a material adverse effect on the
performance of this Agreement, the Indenture, the Securities,
the Exchange Securities or the Registration Rights Agreement,
or the consummation of any of the transactions contemplated
hereby or thereby; such counsel does not express any opinion,
however, as to whether the execution, delivery or performance
by the Company or the Guarantors of this Agreement, the
Indenture, the Registration Rights Agreement or the Merger
Agreement will constitute a violation of, or a default under,
any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial
condition or results of operations of the Company or any of
the Delaware, New York and Texas Guarantors;
Such counsel's opinion as to the validity or enforcement of any
agreements or instruments may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(c) The Company shall have requested and caused one
or more special counsel for Holdco and each Subsidiary in each of
Germany, Italy, Spain, Belgium, The Netherlands, Czech Republic and
Luxembourg, reasonably acceptable to the Initial Purchasers, to furnish
to the Representatives its or their opinion, dated the Closing Date and
addressed to the Representatives, and covering, in substance, the
following matters:
(i) Each of the Company's Subsidiaries
incorporated or organized in the applicable jurisdiction other
than Non-material Subsidiaries (collectively, the "Subject
Subsidiaries") has been duly incorporated or organized, as the
case may be, and is validly existing as a corporation, limited
liability company or limited partnership in good standing (or
equivalent concept) under the laws of the jurisdiction in
which it is incorporated or organized, as the case may be,
with full corporate, limited liability company or limited
partnership power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business
in accordance with its articles of association, bylaws or
other organizational documents, or, to the extent applicable,
as described in the Final Memorandum, and, to the extent
applicable, is duly qualified to do business as a foreign
corporation, limited liability company or limited partnership
and is in good standing under the laws of each jurisdiction it
owns or leases any property or otherwise does business;
(ii) all the outstanding shares of Capital
Stock of each of the Subject Subsidiaries are owned by the
entity listed on the Schedule hereto, have been duly
authorized and issued and are fully paid and nonassessable (to
the extent such concepts exist in the relevant jurisdiction)
and, except as otherwise set forth in the Final Memorandum
(and except for directors' qualifying shares and
21
other de minimis amounts of shares required to be issued to
third parties pursuant to local law requirements), all
outstanding shares of Capital Stock of such Subject Subsidiary
are owned by the entity listed on the Schedule hereto, free of
any adverse claim (or equivalent concept) under the laws of
such jurisdiction; and
(iii) to the extent applicable, neither the
execution and delivery by the Company and the Guarantors of
the Indenture, this Agreement, the Registration Rights
Agreement or the Merger Agreement, nor the issue and sale of
the Securities or the Exchange Securities, nor the
consummation of any other of the transactions herein or
therein contemplated, nor the performance (to the extent
applicable) of the Subject Subsidiaries' obligations hereunder
or thereunder will conflict with or result in a breach or
violation of or imposition of any lien, charge or encumbrance
upon any property or asset of the Subject Subsidiaries
pursuant to any existing law, rule or regulation (excluding
any securities or anti-fraud law, rule or regulation) in the
applicable jurisdiction.
(d) The Representatives shall have received from
Weil, Gotshal & Xxxxxx LLP, counsel for the Initial Purchasers, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Indenture, the Registration Rights Agreement, the Final
Memorandum (as amended or supplemented at the Closing Date) and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the principal
financial or accounting officer of the Company, dated the Closing Date,
to the effect that the signer of such certificate has carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that the representations and
warranties of the Company and the Guarantors in this Agreement are true
and correct on and as of the Closing Date with the same effect as if
made on the Closing Date, and the Company and the Guarantors have
complied with all the agreements and satisfied all the conditions on
their part to be performed or satisfied hereunder at or prior to the
Closing Date.
(f) At the Execution Time and at the Closing Date,
the Company shall have requested and caused KPMG LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with
regard to the Company within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder and stating, as of the Execution Time (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Final Memorandum, as of a date not more than five days prior to
the Execution Time), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to Representatives.
22
References to the Final Memorandum in this Section 6(f)
include any amendment or supplement thereto at the date of the
applicable letter.
(g) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the Final Memorandum
(exclusive of any amendment or supplement thereto), there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (f) of this Section 6 as of the dates or for
the periods specified therein; or (ii) any change, or any development
involving a prospective change, in or affecting the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, the
effect of which, individually or in the aggregate, in any case referred
to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(h) The Company has been advised by the NASD's PORTAL
Market that the Notes and the Exchange Notes have been designated
PORTAL-eligible securities in accordance with the rules and regulations
of the NASD.
(i) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities (including the Securities and the Exchange Securities) by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(j) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(k) The Merger Agreement shall be in full force and
effect; all conditions to the Merger shall have been satisfied or
waived; and the Merger shall be consummated concurrently with the
closing of the Offering.
(l) The documents relating to the New Credit Facility
shall be executed simultaneously with the Closing of the Offering; all
conditions to funding under the New Credit Facility shall have been
satisfied or waived.
(m) All conditions to the consummation of the
Modified First Amended Joint Plan of Reorganization of Xxxxx Lemmerz
International, Inc. and its Affiliated Debtors and
Debtors-in-Possession, dated as of April 9, 2003 (the "Plan of
Reorganization") (other than the Offering and entering into the New
Credit Facility), shall have either been satisfied or waived as
provided in such plan, and the time at which such plan is consummated
(as defined therein, the "Effective Date") shall take place, on or
prior to the Closing Date, and the appeals period in connection
therewith shall have
23
terminated, with no appeals having been timely filed requesting a stay
of the consummation of the Plan of Reorganization.
If any of the conditions specified in Section 6(a) through
Section 6(m) shall not have been fulfilled in all material respects when and as
provided in this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of counsel for the Initial Purchasers, c/o Weil,
Gotshal & Xxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Closing
Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Guarantor to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Initial Purchasers, the Company will reimburse
the Initial Purchasers severally through Citigroup on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities, or proposals for any alternatives to the Securities.
8. Indemnification and Contribution.
(a) The Company and the Guarantors, jointly and
severally, agree to indemnify and hold harmless each Initial Purchaser,
the directors, officers, employees and agents of each Initial Purchaser
and each person who controls any Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law 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 a material fact
contained in the Preliminary Memorandum, the Final Memorandum (or in
any supplement or amendment thereto) or any information provided by the
Company or any Guarantor to any holder or prospective purchaser of
Securities pursuant to Section 5(h), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the 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, (ii) the
Form 8-K, dated May 13, 2003, filed by the Company with the Commission
(including the exhibit filed therewith), or (iii) the materials
provided to investors by, or with the approval of, the Company in
connection with the marketing of the Securities, including any road
show or other presentations made to investors by the
24
Company, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company and
the Guarantors will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Preliminary Memorandum or the Final
Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Initial Purchasers through the
Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability that the Company and the
Guarantors may otherwise have.
(b) Each Initial Purchaser severally and not jointly
agrees to indemnify and hold harmless the Company, the Guarantors, and
each of their directors and officers, and each person who controls the
Company or any Guarantor within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company and the Guarantors to each Initial Purchaser, but only with
reference to written information relating to such Initial Purchaser
furnished to the Company or the Guarantors by or on behalf of such
Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in
any amendment or supplement thereto). This indemnity agreement will be
in addition to any liability that any Initial Purchaser may otherwise
have. The Company and the Guarantors acknowledge that the statements
set forth in the last paragraph of the cover page regarding the
delivery of the Securities, and, under the heading "Plan of
Distribution," (i) the third paragraph; (ii) the ninth paragraph
related to market-making activities; and (iii) the tenth paragraph
related to over-allotment, syndicate covering and stabilization
transactions in the Preliminary Memorandum and the Final Memorandum,
constitute the only information furnished in writing by or on behalf of
the Initial Purchasers for inclusion in the Preliminary Memorandum or
the Final Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses; and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification
is sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained
by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the
25
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action; or (iv)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any reason, the
Company, the Guarantors and the Initial Purchasers agree to contribute
to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the
Company or any Guarantor and one or more of the Initial Purchasers may
be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and
by the Initial Purchasers on the other from the Offering; provided,
however, that in no case shall any Initial Purchaser (except as may be
provided in any agreement among the Initial Purchasers relating to the
Offering) be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by such
Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company, the Guarantors and the Initial Purchasers shall contribute in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Guarantors
on the one hand and of the Initial Purchasers on the other in
connection with the statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations.
Benefits received by the Company and the Guarantors shall be deemed to
be equal to the total net proceeds from the Offering (before deducting
expenses) received by the Company, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts
and commissions in each case. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company
or a Guarantor on the one hand or the Initial Purchasers on the other,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The
26
Company, the Guarantors and the Initial Purchasers agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation that does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), 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 Section 8, each
person who controls an Initial Purchaser within the meaning of either
the Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls
the Company or a Guarantor within the meaning of either the Act or the
Exchange Act and each officer and director of the Company and any
Guarantor shall have the same rights to contribution as the Company and
the Guarantor, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
that the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such nondefaulting Initial Purchasers do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser or the Company or the Guarantors. In the event
of a default by any Initial Purchaser as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives and the Company shall determine in order that the
required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Company, the
Guarantors or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or trading in securities generally on the New
York Stock Exchange or the Nasdaq National Market shall have been suspended or
limited or minimum prices shall have been established on either the New York
Stock Exchange or the Nasdaq National Market; (ii) a banking moratorium shall
have been declared either by Federal or New York State authorities; or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or a
crisis the effect of which on the financial markets is such as to make it, in
the sole
27
judgment of the Representatives, impracticable or inadvisable to proceed with
the Offering or delivery of the Securities as contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantors or their officers and of the Initial Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers or the Company, the Guarantors or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Citigroup Global Markets Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel; or, if sent to the Company or any Guarantor, will be
mailed, delivered or telefaxed to HLI Operating Company, Inc., 00000 Xxxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, (Fax no: (000) 000 0000 and confirmed to its
General Counsel, attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms that follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Applicable Contracts" shall mean the Contracts listed on
Schedule V hereto.
28
"Applicable Laws" shall mean the General Corporation Law of
the State of Delaware, the Texas Business Corporation Act and those laws, rules
and regulations of the State of New York and the federal laws of the United
States of America, in each case, which, in our experience, are normally
applicable to transactions of the type contemplated by the Purchase Agreement,
the Indenture, the Registration Rights Agreement and the Merger Agreement (other
than the United States federal securities laws, state and foreign securities or
blue sky laws, antifraud laws and the rules and regulations of the National
Association of Securities Dealers Inc.), but without our having made any special
investigation as to the applicability of any other law, rule or regulation.
"Applicable Orders" shall mean such material judgment, order
or decree applicable to the Company, or any of the Delaware, New York and Texas
Guarantors or the Delaware non-guarantor Subsidiaries, in each case as certified
by an officer of the Company.
"Bankruptcy Cases" shall mean the voluntary petitions under
Chapter 11 of the Bankruptcy Code filed by Xxxxx Lemmerz International, Inc., 30
of its domestic subsidiaries and one Mexican subsidiary on December 5, 2001.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Capital Stock" shall mean, with respect to any Person, any
shares or other equivalents (however designated) of any class of corporate stock
or partnership interests or any other participations, rights, warrants, options
or other interests in the nature of an equity interest in such Person, including
preferred stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean, the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Material Adverse Effect" shall mean any effect that,
individually or in the aggregate, is materially adverse to the condition
(financial or otherwise), earnings, business or properties of, prior to the
Merger, the Company and its Subsidiaries, and after the Merger, to Holdco and
its Subsidiaries, in each case taken as a whole, whether or not arising from
transactions in the ordinary course of business.
29
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"New Credit Facility" shall mean the senior secured credit
facilities dated as of the Closing Date, among the Company, Holdco, the lenders
and their Affiliates thereto, Citicorp North America, Inc., as administrative
agent and Xxxxxx Commercial Paper Inc., as syndication agent.
"Non-material Subsidiaries" shall mean any foreign Subsidiary
of the Company that had assets of less than $10 million at January 31, 2003, and
revenues of less than $10 million for the year ended January 31, 2003.
"Person" shall mean any individual, corporation, company
(including any limited liability company), association, partnership, joint
venture, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Subsidiary" shall mean in respect of any Person, any
corporation, company (including any limited liability company), association,
partnership, joint venture, trust, unincorporated organization or other business
entity of which a majority of the total voting power of all classes of Capital
Stock of then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof, is at the time owned or controlled, directly or indirectly,
by:
(a) such Person,
(b) such Person and one or more Subsidiaries of such Person,
or
(c) one or more Subsidiaries of such Person.
"Transactions" shall mean, collectively: the Merger;
cancellation of all of HLIs' existing securities and the distribution to holders
of certain classes of claims an amount in cash and other securities of Holdco
pursuant to the Plan of Reorganization; the Offering; entering into the New
Credit Facility; applying the proceeds from the Notes and the initial $450
million borrowing under the New Credit Facility as described in ""Use of
Proceeds" in the Final Memorandum; effectiveness of the Plan of Reorganization,
as confirmed by the bankruptcy court on May 12. 2003; and adjustments to the
Company's consolidated financial statements for ""fresh-start" accounting.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
30
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
among the Company, the Guarantors and the several Initial Purchasers.
Very truly yours,
HLI OPERATING COMPANY, INC.
By: _____________________________________
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
HLI HOLDING COMPANY, INC., TO BE
RENAMED XXXXX LEMMERZ INTERNATIONAL, INC.
By: _____________________________________
Name: Xxxxx X. Xxxx
Title: Vice President, Finance and
Chief Financial Officer
HLI PARENT COMPANY, INC.
By: _____________________________________
Name: Xxxxx X. Xxxx
Title: Vice President, Finance
HLI WHEELS HOLDING COMPANY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI POWERTRAIN HOLDING COMPANY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI COMMERCIAL HIGHWAY HOLDING COMPANY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI BRAKES HOLDING COMPANY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI SERVICES HOLDING COMPANY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--LA MIRADA, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--SEDALIA, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--BOWLING
GREEN, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--COMMERCIAL
HIGHWAY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
CALIFORNIA, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL-- GEORGIA, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--XXXXX, INC
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--XXXXXX, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
HUNTINGTON, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
KENTUCKY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--MEXICO, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--OHIO, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--TEXAS, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI (EUROPE), LTD.
By: _________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--CMI, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--BRISTOL, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--CADILLAC, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
EQUIPMENT & ENGINEERING, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--LAREDO, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--MONTAGUE, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--PCA, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
PETERSBURG, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
SOUTHFIELD, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
TECHNICAL CENTER, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--
TRANSPORTATION, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
XXXXX LEMMERZ INTERNATIONAL--WABASH, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI--SUMMERFIELD REALTY CORP.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI REALTY, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
HLI--VENTURES, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CITIGROUP GLOBAL MARKETS INC.
XXXXXX BROTHERS INC.
By: CITIGROUP GLOBAL MARKETS INC.
By: _______________________
Name:
Title:
By: XXXXXX BROTHERS INC..
By: _______________________
Name:
Title:
For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 4(a) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of
1933 (the "Act") and may not be offered or sold
within the United States or to, or for the
account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii)
otherwise until 40 days after the later of the
commencement of the offering and June 3, 2003,
except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms
used above have the meanings given to them by
Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its Affiliates or with the prior written
consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each of the Initial Purchasers represents, warrants and agrees
that:
(a) It has not offered or sold and, prior to the expiry of a
period of six months from the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an
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offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations
1995.
(b) It has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the Financial Services and Markets Act 2000 ("FSMA"))
received by it in connection with the issue or sale of any Securities
or Exchange Securities in circumstances in which section 21(1) of the
FSMA does not apply.
(c) It has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Securities or Exchange Securities in, from or otherwise
involving the United Kingdom.
(d) The offer in The Netherlands of the Securities or Exchange
Securities is exclusively limited to persons who trade or invest in
securities in the conduct of a profession or business (which includes,
banks, stockbrokers, insurance companies, pension funds, other
institutional investors and finance companies and treasury departments
of large enterprises.
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SCHEDULE I
Principal Amount of
Securities
Initial Purchasers to Be Purchased
------------------ -------------------
Citigroup Global Markets Inc.............................. US$ 137,500,000
Xxxxxx Brothers Inc........................................ US$ 112,500,000
------------
Total............................................. US$ 250,000,000
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SCHEDULE II
Guarantors
--------------------------------------------------------------------------------
HLI Holding Company, Inc, to be renamed Xxxxx Lemmerz International, Inc.
--------------------------------------------------------------------------------
HLI Parent Company, Inc.
--------------------------------------------------------------------------------
HLI Wheels Holding Company, Inc.
--------------------------------------------------------------------------------
HLI Powertrain Holding Company, Inc.
--------------------------------------------------------------------------------
HLI Commercial Highway Holding Company, Inc.
--------------------------------------------------------------------------------
HLI Brakes Holding Company, Inc.
--------------------------------------------------------------------------------
HLI Services Holding Company, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International-La Mirada, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International-Sedalia, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International-Bowling Green, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International-Commercial Highway, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--California, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Georgia, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Xxxxx, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Xxxxxx, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Huntington, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Kentucky, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Mexico, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Ohio, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Texas, Inc.
--------------------------------------------------------------------------------
HLI (Europe), LTD.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--CMI, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Bristol, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Cadillac, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Equipment & Engineering, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Laredo, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Montague, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--PCA, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Petersburg, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Southfield, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Technical Center, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Transportation, Inc.
--------------------------------------------------------------------------------
Xxxxx Lemmerz International--Wabash, Inc.
--------------------------------------------------------------------------------
HLI--Summerfield Realty Corp.
--------------------------------------------------------------------------------
HLI Realty, Inc.
--------------------------------------------------------------------------------
HLI - Ventures, Inc.
--------------------------------------------------------------------------------
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Schedule III
Newly Formed Entities
HLI Holding Company
HLI Parent Company, Inc.
HLI Operating Company, Inc.
HLI Wheels Holding Company, Inc.
HLI Commercial Highway Holding Company, Inc.
HLI Brakes Holding Company, Inc.
HLI Power Train Holding Company, Inc.
HLI Services Holding Company, Inc.
Xxxxx-Xxxxxxx International - Sedalia, Inc.
Xxxxx-Xxxxxxx International - La Mirada, Inc.
Xxxxx-Xxxxxxx International - Commercial Highway, Inc.
Xxxxx-Xxxxxxx International - Bowling Green, Inc.
HLI Europe, LLC
HLI Swiss Holdings, LLC
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Schedule IV
Delaware, New York and Texas Guarantors and
Delaware non-guarantor Subsidiaries
[TO BE PROVIDED]
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Schedule V
Applicable Contracts
1. Certificate of Designation of Series A Cumulative Redeemable Exchangeable
Preferred Stock of HLI Operating Company, Inc.
2. The following documents related to the New Credit Facility:
(a) the Credit Agreement, dated as of June 3, 2003, among HLI
Operating Company, Inc., Xxxxx Lemmerz International, Inc.,
the Lenders and the Issuers (each, as defined therein),
Citicorp North America, Inc., as administrative agent, and
Xxxxxx Commercial Paper, Inc., as syndication agent (the
"Credit Agreement");
(b) the Revolving Credit Notes under the Credit Agreement;
(c) the Term Loan Notes under the Credit Agreement;
(d) the Pledge and Security Agreement, dated as of June 3, 2003,
among HLI Operating Company, Inc. and the other Grantors (as
defined therein), Citicorp North America, Inc., as
administrative agent, and Xxxxxx Commercial Paper, Inc., as
syndication agent;
(e) the Guaranty, dated as of June 3, 2003, by Xxxxx Lemmerz
International, Inc., HLI Parent Company, Inc. and the
Subsidiary Guarantors (as defined therein) in favor of the
Guarantied Parties (as defined therein);
(f) the Deposit Account Control Agreements, as described on
Schedule III to the Credit Agreement;
(g) the Control Account Agreements, as described on Schedule IV to
the Credit Agreement; and
(h) the Mortgages, as described on Schedule V to the Credit
Agreement.
3. Critical Employee Retention Plan as entered by the United States Bankruptcy
Court for the District of Delaware on May 30, 2002.
4. Series A Warrant Agreement between Xxxxx Lemmerz International, Inc. and
Mellon Investor Services LLC, as the Warrant Agent (as defined therein),
dated as of June 3, 2003.
5. Series B Warrant Agreement between Xxxxx Lemmerz International, Inc. and the
Warrant Agent (as defined therein), dated as of June 3, 2003.
45
6. Modified First Amended Joint Plan of Reorganization of Xxxxx Lemmerz
International, Inc., and Its Affiliated Debtors and Debtors In Possession,
dated as of April 9, 2003, as further amended.
7. Tax Sharing Agreement among Xxxxx Lemmerz International, Inc., Xxxxxx-Xxxxx
Company and K-H.
8. Conveyance and Transfer Agreement, dated as of December 15, 1992, between
Xxxxx Lemmerz International, Inc. and Xxxxxx-Xxxxx Company.
9. Employment Agreement, dated as of February 1, 1993, between Xxxxx Wheels,
S.p.A. and Xxxxxxxxx Xxxxxxx.
10. First Amendment to Employment Agreement, dated as of June 6, 1996, between
Xxxxx Wheels, S.p.A. and Xxxxxxxxx Xxxxxxx.
11. Amended and Restated Settlement Agreement between Xxxxx Lemmerz
International, Inc. and Xxxxxxxxx Xxxxxxx, dated as of December 1, 2001.
12. Amended and Restated Employment Agreement between Xxxxx Lemmerz
International, Inc. and Xxxxxx X. Xxxxxxx, dated as of September 26, 2001.
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