Exhibit 10.4
METALDYNE CORPORATION
TERMS OF SENIOR SUBORDINATED NOTES AND RELATED REGISTRATION RIGHTS
Terms used with initial capitals but not defined herein are used as defined
in the Amended and Restated Operating Agreement of NC-M Chassis Systems, LLC
(the "Operating Agreement").
The Indenture (including the form of note) governing the Notes which may be
issued pursuant to the terms of the Operating Agreement shall be identical to
the Indenture, dated as of June 20, 2002, by and among Metaldyne, certain
guarantors named therein and The Bank of New York, as Trustee (the "Existing
Indenture"), governing Metaldyne's existing Series A 11% Senior Subordinated
Notes due 2012 (the "Existing Notes") except as specifically noted below:
1. Interest Rate. The interest rate shall be 10% per annum.
2. Maturity. The maturity date shall be the tenth anniversary of the 15th
day of the month in which the Notes are originally issued.
3. Interest Payment Dates. The interest payment dates shall be
semi-annually, commencing with the 15th day of month which is the sixth month
following the date upon which the Notes are originally issued.
4. Record Dates. The record dates shall be the first day of each month in
which there is an interest payment date.
5. Principal Amount. The principal amount of Notes issuable under the
Indenture will be $31,746,000, which will be in the form of series A Notes
initially and may be exchanged for series B Notes in connection with performance
of the registration rights referred to below.
6. Optional Redemption. (a) Except as set forth in paragraph (b) below, the
Notes will be redeemable at redemption prices expressed as percentages of the
principal amount thereof, together with accrued and unpaid interest to the date
of redemption, only following the fifth anniversary of the 15th day of the month
in which the Notes are originally issued and shall the percentages will be as
follows: 5th through sixth anniversaries, 105%; sixth through seventh
anniversaries, 103.333%; seventh through eighth anniversaries, 101.667%; and
eighth anniversary and thereafter, 100%.
(b) Prior to the fifth anniversary of the 15th day of the month in which
the Notes are originally issued, up to 35% of the originally issued Notes may be
redeemed with the net cash proceeds of one or more equity offerings as set forth
in the Existing Indenture, but the applicable redemption price will be 110% of
the principal amount thereof.
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7. Restricted Payments Covenant. The commencement dates for calculations
within clause (3) of the second paragraph of Section 4.07 for the determination
of Restricted Payments capacity shall be the same as the Existing Indenture in
any event.
8. Date of Indenture. The Indenture will be dated as of the date of the
original issuance of the Notes.
9. Trustee. Until such time as a registration statement is filed pursuant
to the registration rights agreement or Notes are sold to a third party not
affiliated with DaimlerChrysler, Metaldyne need not incur the cost of hiring a
trustee. The Indenture will provide that the Trustee provisions are inapplicable
until such time and will not in any manner limit the holders' ability to
exercise their rights and remedies under the Indenture.
10. Change in Control. In the event of a Change in Control (as defined in
the Existing Indenture) each holder of the Notes will be entitled to require
that Metaldyne purchase all or a part of its Notes for a cash purchase price of
101% of the principal amount thereof, plus accrued interest, on the same basis
and subject to the same provisions as in the Existing Indenture.
11. Ranking. The Notes will rank pari passu in right of payment with the
Existing Notes.
12. Definitions. If any definitions require updating at the time of
issuance, such as the Credit Agreement definition, such modifications will be
permitted, as both parties agree to be reasonably necessary and appropriate.
13. Transfer, DTC and Related Provisions. The transfer provisions of the
Indenture will be modified to reflect that the Notes were not initially
distributed to an underwriter/broker-dealer and that the Notes are not going to
be included in the PORTAL system and trade through DTC prior to registration
with the SEC. Once the Notes are registered, Metaldyne will be obligated under
the registration rights agreement to use its best efforts to provide that the
Notes trade through the facilities of DTC.
14. Registration Rights. The registration rights agreement for the Notes
will be identical to the Registration Rights Agreement, dated June 2002, by and
among Metaldyne, certain of Metaldyne's Subsidiaries and the initial purchasers
named therein, relating to the Existing Notes with only the following
modifications:
a. Parties. Will change to include only the initial holder and
Metaldyne.
b. Date. Will be dated the date of issuance of the Notes.
c. Securities. Securities referred to will be the Notes.
d. Obligation to file and time periods. All of the provisions
pertaining to the obligation to make filings with the SEC and become
effective
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will be triggered not off of the issuance date of the Notes, but rather off
of the date on which the initial holders of the Notes makes a written
demand of Metaldyne to commence the registration process which includes a
statement that the initial holders have sold at least $5 million of Notes
to an unaffiliated third party. In the event that a shelf registration is
required, there will be suspension rights for up to 90 days in any 365 day
period if Metaldyne's board of directors determines in its reasonable good
faith judgment that there is a valid business reason to do so, such as a
potential acquisition, divestiture of assets or other material corporate
transaction.
e. Market-Making Provisions. There will be no market-making prospectus
requirements applicable to affiliated broker-dealers.
f. Other. Appropriate adjustments will be made to defined terms and
other provisions to reflect this transaction, as opposed to the previous
underwritten offering, as both parties agree to be reasonably necessary and
appropriate.
