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EXHIBIT 1.1
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
$250,000,000
9 1/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
June 19, 1997
CIBC WOOD GUNDY SECURITIES CORP.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
SALOMON BROTHERS INC
c/o CIBC Wood Gundy Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ Wheels International, Inc., a Delaware corporation (the
"Company"), and each of the Company's subsidiaries listed in Exhibit A hereto
(each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors"
and, together with the Company, the "Issuers") hereby confirm their agreement
with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$250,000,000 aggregate principal amount of its 9-1/8% Senior Subordinated Notes
due 2007 (the "Notes"). The obligations of the Company under the Indenture (as
hereinafter defined) and the Notes will be unconditionally guaranteed (the
"Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The
Notes and the Guarantees are to be issued pursuant to the Indenture (the
"Indenture"), dated June 30, 1997, among the Company, The Bank of New York, a
New York corporation, as trustee (the "Trustee"), and the Subsidiary
Guarantors. The Notes and the Guarantees are hereinafter referred to
collectively as the "Securities."
The sale of the Securities to the Initial Purchasers (the "Offering")
will be made without registration of the Securities under the Securities Act of
1933, as amended, (the "Act") and the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder, in reliance
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upon the exemption therefrom provided by Section 4(2) of the Act. Holders of
the Securities will have the benefits of a Registration Rights Agreement to be
dated as of June 30, 1997 among the Issuers and the Initial Purchasers (the
"Registration Rights Agreement").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated June 12, 1997 (the
"Preliminary Memorandum") and prepared a final offering memorandum dated
June 19, 1997 (the "Final Memorandum" and, together with the Preliminary
Memorandum, the "Memorandum") setting forth or including a description of the
terms of the Securities, the terms of the Offering, a description of the
Company and any material developments relating to the Company occurring after
the date of the most recent financial statements included therein.
The Securities are being issued and sold in connection with the
acquisition (the "Acquisition") by the Company of Lemmerz Holding GmbH, a
limited liability company organized under the laws of the Federal Republic of
Germany ("Lemmerz"), pursuant to the Purchase Agreement (the "Acquisition
Agreement"), dated June 6, 1997, among the Company, Cromodora Wheels S.p.A.,
Lemmerz and the shareholders of Lemmerz, pursuant to which the Company will
purchase the capital stock of Lemmerz for (i) $200 million in cash and (ii)
convertible preferred stock of the Company which, following stockholder
approval, will automatically convert into 5 million shares of newly issued
common stock of the Company. The cash portion of the consideration, the
refinancing of existing Lemmerz debt, working capital of the Company and the
fees and expenses of the Lemmerz Acquisition will be financed with the proceeds
from the Offering and borrowings under an amended $740.5 million senior secured
term loan facility (the "Credit Agreement") among the Company, Canadian
Imperial Bank of Commerce, as administrative agent, ▇▇▇▇▇▇▇ Capital
Corporation, as documentation agent, and the other financial institutions party
thereto, as lenders. The time of the consummation of the Acquisition is herein
referred to as the "Effective Time."
In connection with the Acquisition, the Company is soliciting
consents from holders of its 11% Senior Subordinated Notes due 2006 (the "Old
Notes") to amendments (the "Proposed Amendments") to certain of the provisions
in the indenture governing the Old Notes (the "Old Indenture"), as described
in the Consent Solicitation Statement dated June 12, 1997, the related form of
Consent and instructions thereto and any supplemental materials attached
thereto (the "Consent Solicitation"). After
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receipt of the required consents from the holders of the Old Notes, the
Company, the Subsidiary Guarantors parties to the Old Indenture and the trustee
under the Old Indenture will enter into a supplemental indenture to give effect
to the Proposed Amendments.
The Acquisition Agreement and the documents entered into in
connection therewith including, without limitation, the agreements attached
thereto as exhibits, are herein collectively referred to as the "Acquisition
Documents." This Agreement, the Securities, the Exchange Notes (as defined in
the Registration Rights Agreement), the Private Exchange Notes (as defined in
the Registration Rights Agreement), the Registration Rights Agreement and the
Indenture are herein collectively referred to as the "Offering Documents."
The Acquisition Documents, the Offering Documents and the Credit Agreement are
herein collectively referred to as the "Transaction Documents." The Offering,
the Acquisition, the Consent Solicitation and the execution of and borrowing
under the Credit Agreement are collectively referred to as the "Transactions."
2. Representations and Warranties of the Issuers. The Issuers,
jointly and severally, represent and warrant to and agree with the Initial
Purchasers that:
(a) Each of the Preliminary Memorandum and the Final Memorandum, as
of its respective date and, in the case of the Final Memorandum, at the
Closing Date (as defined in Section 3 hereof), did not and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
2(a) do not apply to statements or omissions that are made in reliance
upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use in the Preliminary Memorandum or the Final Memorandum
or any amendment or supplement thereto, which information is set forth in
Section 15.
(b) Each of the Issuers and the Subsidiaries (as hereinafter
defined) that is a corporation organized under the laws of a
jurisdiction of the United States has been and at and as of the Effective
Time will be duly incorporated and each of the Issuers and each
Subsidiary that is a corporation organized under the laws of a
jurisdiction
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of the United States is and at and as of the Effective Time will be
validly existing in good standing as a corporation under the laws of its
jurisdiction of incorporation, with the requisite corporate power and
authority to own its properties and conduct its business as now conducted
as described in the Memorandum, is and at and as of the Effective Time
will be duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in
the aggregate, have a material adverse effect on the business, condition
(financial or other) or results of operations of any of the Issuers, the
Subsidiaries, Lemmerz and each of the Lemmerz Subsidiaries, taken as a
whole (any such event a "Material Adverse Effect"); each of the Issuers
and the Subsidiaries that is not a corporation organized under the laws
of a jurisdiction of the United States, and, to the best knowledge of
the Issuers, after due inquiry, Lemmerz and each of the Lemmerz
Subsidiaries has been and at and as of the Effective Time will be duly
organized and validly existing under the laws of the jurisdiction in
which it is so organized, with the requisite power and authority to own
its properties and conduct its business as now conducted and as described
in the Memorandum; the Company had as of the date specified therein the
authorized, issued and outstanding capitalization set forth in the Final
Memorandum; except as set forth in Exhibit B-1 hereto and for the
Subsidiary Guarantors (collectively, the "Subsidiaries"), the Company
does not have any subsidiaries and, to the best knowledge of the Company,
after due inquiry, except as set forth in Exhibit B-2 hereto (the
"Lemmerz Subsidiaries"), Lemmerz does not have any subsidiaries or own
directly or indirectly any of the capital stock or other equity
securities of any other person; all of the outstanding shares of capital
stock of the Issuers and the Subsidiaries have been, and to the best
knowledge of the Issuers, after due inquiry, all of the outstanding
shares of capital stock of Lemmerz and the Lemmerz Subsidiaries have
been, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights and, in the case of the Subsidiary Guarantors, the
Subsidiaries, and the Lemmerz Subsidiaries except in connection with the
Credit Agreement, are owned free and clear of all liens, encumbrances,
equities and restrictions on transferability (other than those imposed by
the Act and the state securities or "Blue Sky" laws);
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except as set forth in the Final Memorandum, no options, warrants or
other rights to purchase from any Issuer or any Subsidiary or, to the
best knowledge of the Issuers, after due inquiry, except as set forth in
Exhibit B-2, Lemmerz or any Lemmerz Subsidiary, agreements or other
obligations of any Issuer or any Subsidiary or, to the best knowledge of
the Issuers, after due inquiry, Lemmerz or any Lemmerz Subsidiary,
to issue or other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in any
Issuer or any Subsidiary or Lemmerz or any Lemmerz Subsidiary, are
outstanding.
(c) Each of the Issuers has the required corporate power and
authority to execute, deliver and perform its obligations under the
Indenture, the Securities, the Exchange Notes and the Private Exchange
Notes. The Securities, the Exchange Notes, the Private Exchange
Notes and the guarantees to be endorsed thereon have each been duly and
validly authorized by each of the Issuers for issuance and, when executed
by the Issuers and authenticated by the Trustee in accordance with the
provisions of the Indenture and, in the case of the Securities, delivered
to and paid for by the Initial Purchasers in accordance with the terms
hereof, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Issuers, entitled
to the benefits of the Indenture and enforceable against the Issuers in
accordance with their terms except that the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally or (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity); each of the Issuers has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Indenture, the Securities, the Exchange Notes and the Private Exchange
Notes, and the Indenture has been duly and validly authorized by the
Issuers and is in a form to be qualified under the Trust Indenture Act of
1939, as amended (the "TIA") and, when executed and delivered by the
Issuers (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in ef-
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fect relating to or affecting creditors' rights generally or (ii) general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity).
(d) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Issuers and, when executed
and delivered by the Issuers (assuming the due authorization, execution
and delivery by the Initial Purchasers), will constitute a valid and
legally binding agreement of the Issuers, enforceable against the Issuers
in accordance with its terms except (i) that the enforcement thereof may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, or general principles of equity (regardless
of whether such enforcement is considered in a proceeding at law or in
equity) and (ii) as any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations.
(e) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized by the
Issuers and, when executed and delivered by the Issuers, will constitute
a valid and legally binding agreement of the Issuers, enforceable against
the Issuers in accordance with its terms except (i) that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity) and (ii) as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and public
policy considerations.
(f) Each of the Issuers has and, to the best knowledge of the
Issuers, after due inquiry, Lemmerz has all requisite power and
authority to execute, deliver and perform its obligations under each
of the Transaction Documents (other than the Offering Documents) to which
it is a party; each of the Transaction Documents (other than the Offering
Documents), has been duly and validly authorized
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by each of the Issuers and, to the best knowledge of the Issuers, after
due inquiry, Lemmerz to the extent it is a party thereto and each
Transaction Document (other than the Offering Documents), when executed
and delivered, will constitute a valid and legally binding agreement
of such of the Issuers and, to the best knowledge of the Issuers, after
due inquiry, Lemmerz that is a party thereto, enforceable against such of
the Issuers and, to the best knowledge of the Issuers, after due inquiry,
Lemmerz that is a party thereto, in each case in accordance with its
terms (assuming due authorization, execution and delivery of each
Transaction Document by any other party thereto) except (i) that the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights to
indemnity or contribution hereunder may be limited by federal and state
securities laws and public policy considerations.
(g) Except as set forth in the Final Memorandum and the consent
pursuant to the ▇▇▇ ▇▇▇▇▇▇▇▇▇ which failure to obtain would not be
material to Lemmerz and the Lemmerz Subsidiaries, taken as a whole, no
consent, approval, authorization or order of any court or governmental
agency or body is required for the performance of any of the Transaction
Documents by the Issuers or, to the best knowledge of the Issuers, after
due inquiry, Lemmerz, to the extent each is or will be a party thereto,
or for the consummation by the Issuers or, to the best knowledge of the
Issuers, after due inquiry, Lemmerz, of any of the transactions
contemplated thereby, except to the extent set forth in the Acquisition
Agreement (including, without limitation, the Lemmerz Disclosure Schedule
and the HWI Disclosure Schedule) for such consents, approvals,
authorizations or orders as have been obtained or made or as may be
required under the Act and the TIA (with respect to the transactions
contemplated by the Registration Rights Agreement) or as may be required
under state securities or "Blue Sky" laws in connection with the purchase
and distribution of the Securities by the Initial Purchasers; and none of
the Issuers or, to the best knowledge of the Issuers, after due inquiry,
Lemmerz or the Lemmerz Subsidiaries, is (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation of any statute,
judgment, decree, order, rule or regulation applicable to
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it or any of its properties or assets, which violation would,
individually or in the aggregate, have a Material Adverse Effect, or
(iii) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any of the Transaction
Documents or any other contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate or agreement or instrument to which it is a party or to which
it is subject, which default would, individually or in the aggregate,
have a Material Adverse Effect.
(h) The execution, delivery and performance by the Issuers and, to
the best knowledge of the Issuers, after due inquiry, Lemmerz, of each
of the Transaction Documents to which it is a party, and the consummation
by the Issuers and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz of the transactions contemplated thereby and the
fulfillment of the terms thereof, will not violate, conflict with or
constitute or result in a breach of or a default under (or an event that,
with notice or lapse of time, or both, would constitute a breach of or a
default under) any of (a) the terms or provisions of any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, or agreement or instrument to which any of the Issuers or the
Subsidiaries is, or to the best knowledge of the Issuers, after due
inquiry, Lemmerz is, a party or to which any of their respective
properties or assets are subject, which violation, conflict, breach or
default would, individually or in the aggregate, have a Material Adverse
Effect, (b) the certificate of incorporation or bylaws of any of the
Issuers, the Subsidiaries or Lemmerz or (c) (assuming compliance with all
applicable Federal and state securities and "Blue Sky" laws) any statute,
judgment, decree, order, rule or regulation of any court or governmental
agency or other body applicable to the Issuers or the Subsidiaries or, to
the best knowledge of the Issuers, after due inquiry, Lemmerz, or any of
their respective properties or assets, which violation, conflict, breach
or default would, individually or in the aggregate, have a Material
Adverse Effect.
(i) Each of the Transactions has been duly authorized by each of
the Issuers and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz, to the extent each is or will be a party thereto.
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(j) The audited consolidated financial statements and schedules of
each of the Company and Lemmerz included in the Memorandum present fairly
the consolidated financial position, results of operations and cash flows
of the Company and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz, respectively, at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein; the unaudited consolidated financial statements
and the related notes of the Company and Lemmerz included in the
Memorandum present fairly the consolidated financial position, results of
operations and cash flows of the Company and, to the best knowledge of
the Company, after due inquiry, Lemmerz, respectively, at the dates and
for the periods to which they relate, subject to year-end audit
adjustments, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as otherwise
stated therein and have been prepared on a basis substantially consistent
with that of the audited financial statements referred to above except as
otherwise stated therein; to the best knowledge of the Company, after due
inquiry, the summary and selected financial and statistical data included
in the Memorandum present fairly the information shown therein and have
been prepared and compiled on a basis consistent with the audited and
unaudited financial statements included therein, except as otherwise
stated therein; and KPMG Peat Marwick LLP and KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft,
which have examined certain of such financial statements and schedules as
set forth in their reports included in the Memorandum, are independent
public accounting firms as required by the Act.
(k) (i) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Memorandum (A) have been prepared in accordance with applicable
requirements of Rule 11-02 of Regulation S-X promulgated under the Act
and (B) have been properly computed on the bases described therein; (ii)
the assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the
Memorandum are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
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(l) Except as described in the Final Memorandum, there is not
pending or, to the best knowledge of the Issuers, threatened any action,
suit, proceeding, inquiry or investigation, governmental or otherwise, to
which any of the Issuers or the Subsidiaries or, to the best knowledge of
the Issuers, after due inquiry, Lemmerz or the Lemmerz Subsidiaries,
is a party, or to which their respective properties or assets are
subject, before or brought by any court, arbitrator or governmental
agency or body, that, if determined adversely to the Issuers or the
Subsidiaries or Lemmerz or the Lemmerz Subsidiaries, would, individually
or in the aggregate, have a Material Adverse Effect or that seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to be sold hereunder or the
consummation of the transactions described in the Final Memorandum under
the captions "Use of Proceeds" and "The Lemmerz Acquisition."
(m) The Issuers and the Subsidiaries and, to the best knowledge of
the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries,
possess adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how (i) that are
necessary to conduct their business as described in the Memorandum and
(ii) the loss of which would, individually or in the aggregate, have a
Material Adverse Effect.
(n) None of the Issuers or the Subsidiaries has received and, to
the best knowledge of the Issuers, after due inquiry, none of Lemmerz
or the Lemmerz Subsidiaries has received, any notice of infringement of
or conflict with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks,
service marks, trade names, copyrights or know-how that, if such
assertion of infringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
(o) Each of the Issuers and the Subsidiaries has obtained and, to
the best knowledge of the Issuers, after due inquiry, Lemmerz and the
Lemmerz Subsidiaries have obtained all licenses, permits, franchises and
other governmental authorizations, the lack of which would, individually
or in the aggregate, have a Material Adverse Effect.
(p) Subsequent to the respective dates as of which information is
given in the Final Memorandum and except as described therein, (i) the
Issuers and the Subsidiaries
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have not incurred and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, have not
incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions, in either case whether or not
in the ordinary course of business, and (ii) the Issuers and the
Subsidiaries or, to the best knowledge of the Issuers, after due inquiry,
Lemmerz and the Lemmerz Subsidiaries, taken as a whole, have not
purchased any of their respective outstanding capital stock, or declared,
paid or otherwise made any dividend or distribution of any kind on any of
their respective capital stock or otherwise.
(q) None of the Issuers or the Subsidiaries or, to the best
knowledge of the Issuers, after due inquiry, Lemmerz or the Lemmerz
Subsidiaries, has taken or will take any action that would cause this
Agreement or the issuance or sale of the Securities to violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System, in
each case as in effect, or as the same may hereafter be in effect, on the
Closing Date.
(r) Each of the Issuers and the Subsidiaries has and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries has, good and marketable title to all real property
described in the Final Memorandum as being owned by it and good and
marketable title to the leasehold estate in the real property described
therein as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as described in the
Final Memorandum or such as would not, individually or in the aggregate,
have a Material Adverse Effect.
(s) Each of the Issuers and the Subsidiaries has and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries has, filed all necessary federal, state and foreign
income and franchise tax returns, except where the failure to so file
such returns would not, individually or in the aggregate, have a Material
Adverse Effect; and, other than taxes due thereon or tax deficiencies
which any Issuer or Subsidiary or, to the best knowledge of the Issuers,
after due inquiry, any of Lemmerz or the Lemmerz Subsidiaries, is
contesting in good faith and for which any Issuer or Subsidiary or, to
the best knowledge of the Issuers, after due inquiry, either Lemmerz or
the Lemmerz Subsidiaries
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reasonably believe that it has provided adequate reserves, has paid all
taxes due thereon and there is no tax deficiency that has been asserted
against any Issuer or Subsidiary or, to the best knowledge of the
Issuers, after due inquiry, either Lemmerz or the Lemmerz Subsidiaries
that would, individually or in the aggregate, have a Material Adverse
Effect.
(t) (i) Immediately after the consummation of the Acquisition and
the other transactions contemplated by the Transaction Documents, the
fair value and present fair saleable value of the assets of the Company
will exceed the sum of its stated liabilities and identified contingent
liabilities; and (ii) the Company is not, nor will it be, after giving
effect to the execution, delivery and performance of the Transaction
Documents, to the extent it is a party thereto, and the consummation of
the transactions contemplated thereby, (a) left with unreasonably small
capital with which to carry on its business as it is proposed to be
conducted, (b) unable to pay its debts (contingent or otherwise) as they
mature or (c) insolvent.
(u) Assuming the accuracy of the Initial Purchasers'
representations and warranties set forth in Section 5 hereof, and the
due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 5 hereof, the offer and sale of the
Securities to the Initial Purchasers in the manner contemplated by this
Agreement and the Final Memorandum does not require registration under
the Act and the Indenture does not require qualification under the TIA.
(v) No securities of the Company or any of its Subsidiaries are (i)
of the same class (within the meaning of Rule 144A under the Act) as
the Securities and (ii) listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or quoted in a U.S. automated interdealer
quotation system.
(w) None of the Issuers or the Subsidiaries, any of their
respective Affiliates or any person acting on their behalf (other than
the Initial Purchasers) has, and, to the best knowledge of the
Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries have
not, engaged in any directed selling efforts (as that term is defined in
Regulation S under the Act ("Regulation S")) with respect to the
Securities; and the Issuers, the Subsidiaries, their
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respective Affiliates and any person acting on their behalf (other than
the Initial Purchasers) have acted in accordance with the offering
restrictions requirements of Regulation S.
(x) (i) The Issuers have delivered to the Initial Purchasers a true
and correct copy of each of the Transaction Documents that have been
executed and delivered prior to the date of this Agreement and each other
Transaction Document in the form substantially as it will be executed and
delivered on or prior to the Closing Date, together with all related
agreements and all schedules and exhibits thereto, and as of the date
hereof there have been no material amendments, alterations, modifications
or waivers of any of the provisions of any of the Transaction Documents
since their date of execution or from the form in which any such
Transaction Document has been delivered to the Initial Purchasers; and
(ii) there exists as of the date hereof (after giving effect to the
transactions contemplated by each of the Transaction Documents) no event
or condition that would constitute a default or an event of default (in
each case as defined in each of the Transaction Documents) under any of
the Transaction Documents that would result in, individually or in the
aggregate, a Material Adverse Effect or materially adversely effect the
ability of the Company or to the best knowledge of the Issuers, after due
inquiry, Lemmerz to consummate the Acquisition and the other
Transactions.
(y) Except as disclosed in the Final Memorandum and except as would
not individually or in the aggregate have a Material Adverse Effect,
(A) each of the Issuers and the Subsidiaries is and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries is, in compliance with all applicable Environmental
Laws, (B) each of the Issuers and the Subsidiaries has and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries has, made all filings and provided all notices
required under any applicable Environmental Law, and has all permits,
authorizations and approvals required under any applicable Environmental
Laws and is in compliance with their requirements, (C) there are no
pending or, to the best knowledge of the Issuers, after due inquiry,
threatened Environmental Claims against any of the Issuers or the
Subsidiaries or to the best knowledge of the Issuers, after due inquiry,
Lemmerz or the Lemmerz Subsidiaries and (D) none of the Issuers or the
Subsidiaries has and, to
14
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the best knowledge of the Issuers, after due inquiry, neither Lemmerz nor
the Lemmerz Subsidiaries have knowledge of any circumstances with respect
to any of their respective properties or operations that could reasonably
be anticipated to form the basis of an Environmental Claim against
any of them or any of their subsidiaries or any of their respective
properties or operations and the business operations relating thereto
which Environmental Claims would, individually or in the aggregate, have
a Material Adverse Effect.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local
or municipal statute, law, rule, regulation, ordinance, code or rule and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment binding on
any of the Issuers or the Subsidiaries or Lemmerz or the Lemmerz
Subsidiaries, relating to pollution or protection of the environment or
health or safety or any chemical, material or substance that is subject
to regulation thereunder. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, written notices of responsibility, information requests,
liens, written notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law.
(z) None of the Issuers or the Subsidiaries and, to the best
knowledge of the Issuers, after due inquiry, none of Lemmerz or the
Lemmerz Subsidiaries is required to register as an "investment company"
or a company "controlled by" an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(aa) Except as stated in the Final Memorandum, none of the Issuers
or the Subsidiaries or, to the best knowledge of the Issuers, after due
inquiry, none of Lemmerz or the Lemmerz Subsidiaries or any of their
respective directors, officers or controlling persons, has taken,
directly or indirectly, any action designed, or that might reasonably be
expected, to cause or result, under the Act or otherwise, in, or that has
constituted, stabilization or manipulation of the price of any security
of any Issuer to facilitate the sale or resale of the Securities (it
being understood that no representation or warranty is made as to any
actions by the Initial Purchasers).
15
-15-
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to
issue and sell to the Initial Purchasers, and each of the Initial Purchasers
severally agrees to purchase from the Issuers, at 97.5% of their principal
amount, the respective aggregate principal amounts of the Securities set forth
opposite their respective names on Exhibit C hereto. The obligations of the
Initial Purchasers under this Agreement are several and not joint. One or more
certificates in definitive form for the Securities that the Initial Purchasers
have agreed to purchase hereunder, and in such denomination or denominations
and registered in such name or names as each Initial Purchaser requests upon
notice to the Company at least 48 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company, against payment by or on behalf of
the Initial Purchasers of the purchase price therefor by wire transfer of
immediately available funds net of the overnight cost of such funds to the
account of the Company previously designated by it in writing. Such delivery
of and payment for the Securities shall be made at the offices of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at
9:00 a.m., New York time, on June 30, 1997, or at such date as the Initial
Purchasers and the Company may agree upon, such time and date of delivery
against payment being herein referred to as the "Closing Date." The Company
will make such certificate or certificates for the Securities available for
checking and packaging by the Initial Purchasers at the offices in New York,
New York of CIBC Wood Gundy Securities Corp. at least 24 hours prior to the
Closing Date.
4. Registration Rights of Holders of Securities. The Initial
Purchasers and their direct and indirect transferees of the Securities will
have such rights with respect to the registration thereof under the Act and
qualification of the Indenture under the TIA as are set forth in the
Registration Rights Agreement.
5. Resale of Securities. Each Initial Purchaser represents and
warrants to, and agrees with, the Company that (a) it is a "qualified
institutional buyer" as defined in Rule 144A under the Act ("QIB"); (b) it
has not and will not, directly or indirectly, solicit offers for, or offer or
sell, the Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act; (c)
it has not and will not, directly or indirectly, engage in any "directed
selling
16
-16-
efforts" (as defined in Regulation S under the Act); and (d) it has and will
solicit offers for the Securities only from, and will offer, sell and deliver
the Securities only to, (A) in the case of offers inside the United States, (i)
persons whom such Initial Purchasers reasonably believe to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented
to such Initial Purchasers that each such account is a QIB to whom notice has
been given that such sale or delivery is being made in reliance on Rule 144A or
(ii) a limited number of other institutional investors each of which is
reasonably believed by the Initial Purchaser to be an "accredited investor" (as
defined in Rule 501(a)(1)(2), (3) or (7) of the Act) that, prior to their
purchase of the Securities, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Annex I to the Final
Memorandum and (B) in the case of offers outside the United States, to persons
other than U.S. Persons in compliance with Regulation S under the Act ("foreign
purchasers," which terms shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)); provided, however, that, in
the case of this clause (B), in purchasing such Securities such persons are
deemed to have represented and agreed as provided under the caption "Notice to
Investors" contained in the Final Memorandum.
6. Certain Covenants. The Issuers, jointly and severally, covenant
and agree with the Initial Purchasers that:
(a) None of the Issuers will amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy
for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchasers or counsel for the
Initial Purchasers shall reasonably object. The Issuers will promptly,
upon the reasonable request of the Initial Purchasers or counsel to the
Initial Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be reasonably necessary or
advisable in connection with the resale of the Securities by the Initial
Purchasers.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchasers
17
-17-
may designate and will continue such qualifications in effect for as long
as may be necessary to complete the distribution of the Securities by the
Initial Purchasers; provided, however, that in connection therewith none
of the Issuers shall be required to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction or
to take any other action that would subject it to general service of
process or to taxation in respect of doing business in any jurisdiction
in which it is not otherwise subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Securities or, if issued, the Private
Exchange Notes, any event occurs or information becomes known as a result
of which the Final Memorandum as then amended or supplemented would
include any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Final Memorandum to comply with applicable law, the Issuers will promptly
notify the Initial Purchasers thereof (who thereafter will not use such
Final Memorandum until appropriately amended or supplemented) and will
prepare, at the expense of the Issuers, an amendment or supplement to the
Final Memorandum that corrects such statement or omission or effects such
compliance.
(d) The Company will, without charge, provide to each Initial
Purchaser and to counsel to the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) During the period of five years from the Closing Date, the
Company will furnish to the Initial Purchasers (a) as soon as available,
a copy of each report and other communication (financial or otherwise) of
the Company mailed to the Trustee or the holders of the Securities,
stockholders or filed with the Commission or any national securities
exchange on which any class of securities of the Company may be listed
and (b) from time to time such other information concerning the Company
as you may reasonably request.
(f) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions
18
-18-
hereof (other than solely by reason of a default by the Initial
Purchasers of their obligations hereunder after all conditions hereunder
have been satisfied in accordance herewith) or if this Agreement shall be
terminated by the Initial Purchasers because of any failure or refusal on
the part of the Issuers to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse you for all
reasonable out-of-pocket expenses (including fees and expenses of counsel
for the Initial Purchasers) incurred by you in connection herewith.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(h) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Final Memorandum.
(i) None of the Issuers or any of their respective Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be
integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
(j) The Issuers will not, and will not permit any of the
Subsidiaries to, solicit any offer to buy or offer to sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act.
(k) For so long as any of the Securities remain outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3)
under the Act and not able to be sold in their entirety under Rule
144 under the Act (or any successor provision), the Company will make
available, upon request, to any seller of such Securities the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
19
-19-
(l) The Issuers will use their best efforts to (i) permit the
Securities to be included for quotation on the Private Offering, Resales,
and Trading through Automated Linkages Market ("PORTAL") and (ii)
permit the Securities to be eligible for clearance and settlement through
The Depository Trust Company ("DTC").
(m) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S), the Company will not register
any transfer of such Securities not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Securities in
the form of definitive securities.
7. Expenses. Notwithstanding any termination of this Agreement
(pursuant to Section 11 or otherwise), the Company agrees to pay the following
costs and expenses and all other costs and expenses incident to the performance
by the Issuers of their obligations hereunder: (i) the preparation, printing
or reproduction of each Preliminary Memorandum, the Final Memorandum (including
financial statements) and each amendment or supplement to it; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Memorandum and
all amendments or supplements to it as may be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp taxes in connection with the original issuance
and sale of the Securities and trustees' fees; (iv) the reproduction and
delivery of this Agreement, the preliminary and supplemental "Blue Sky"
memoranda, including filing fees and reasonable fees and disbursements of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers, relating thereto,
and all other agreements or documents reproduced and delivered in connection
with the offering of the Securities; (v) the registration or qualification of
the Securities for offer and sale under the securities or Blue Sky laws of the
several states (including the reasonable fees, expenses and disbursements of
counsel to the Initial Purchasers relating to such registration and
qualification); (vi) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (vii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Issuers; (viii) fees and expenses of the Trustee
including fees and expenses of its
20
-20-
counsel; and (ix) any fees charged by investment rating agencies for the rating
of the Securities.
8. Conditions of the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities
are subject to the accuracy of the representations and warranties contained
herein, to the performance by the Issuers of their respective covenants and
agreements hereunder and to the following additional conditions unless waived
in writing by the Initial Purchasers:
(i) None of the issuance and sale of the Securities pursuant to this
Agreement, the Transactions or any other transactions contemplated by any
of the Transaction Documents or the Final Memorandum shall be
enjoined (temporarily or permanently) and no restraining order or other
injunctive order shall have been issued; and there shall not have been
any legal action, order, decree or other administrative proceeding
instituted or threatened against any of the Issuers or against you
relating to the issuance of the Securities or the Initial Purchasers'
activities in connection therewith, the Transactions or any other
transaction contemplated by any of the Transaction Documents or the Final
Memorandum.
(ii) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, prospects, net worth or results of operations of
the Issuers, the Subsidiaries, Lemmerz and the Lemmerz Subsidiaries,
taken as a whole, not contemplated by the Final Memorandum that, in your
opinion, would materially adversely affect the market for the Securities,
or (ii) any event or development relating to or involving any of the
Issuers or Lemmerz or any of the respective officers or directors of the
Issuers or Lemmerz that makes any statement made in the Final Memorandum
untrue or that, in the opinion of the Issuers and their counsel or the
Initial Purchasers and their counsel, requires the making of any addition
to or change in the Final Memorandum in order to state a material fact
necessary in order to make the statements made therein not misleading or
to comply with law.
(iii) The Initial Purchasers shall have received an opinion of
counsel to the Issuers in form and substance satisfactory to the Initial
Purchasers and counsel to the
21
-21-
Initial Purchasers, dated the Closing Date, of each of (i) Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, substantially in the form of Exhibit D-1
hereto, and (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire, General Counsel to the
Company substantially in the form of Exhibit D-2.
(iv) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial
Purchasers, with respect to the sufficiency of certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchasers may require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ shall have received and may rely upon such certificates and other
documents and information as they may reasonably request to pass upon
such matters. In addition, in rendering their opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ may state that its opinion is limited to matters of New York,
Delaware corporate and federal law.
(v) The Initial Purchasers shall have received, from KPMG Peat
Marwick LLP, independent public accountants for the Issuers, and KPMG
Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft, independent public accountants for
Lemmerz, "comfort" letters dated the date hereof and the Closing Date, in
form and substance reasonably satisfactory to the Initial Purchasers and
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers.
(vi) The representations and warranties of the Issuers contained in
this Agreement which are qualified as to materiality shall be true and
correct, and those representations and warranties of the Issuers which
are not so qualified shall be true and correct in all material respects,
on and as of the Closing Date; the Issuers shall have complied in all
material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to the
Closing Date.
(vii) There shall not have been any change in the capital stock of
the Issuers nor any material increase in the consolidated short-term or
long-term debt of the Issuers, in each case, from that set forth or
contemplated in the Final Memorandum (or any amendment or supplement
thereto) or contemplated by the Transaction Documents and (b) the Issuers
shall not have any liabilities or obligations, contingent or otherwise
(whether or not in the ordinary course of business), that are material to
the Issu-
22
-22-
ers, taken as a whole, other than those reflected in the Final
Memorandum (or any amendment or supplement thereto) or contemplated by
the Transaction Documents.
(viii) You shall have received certificates, dated the Closing Date
and signed by the chief executive officer and the chief financial
officer of the Company and each Subsidiary Guarantor (or such other
officers as are acceptable to you), to the effect that each of the
conditions to closing set forth in this Section 8 have been satisfied.
(ix) There shall have been no material amendments, alterations,
modifications or waivers of any provisions of the Acquisition Agreement
since the date of this Agreement and the Acquisition Agreement shall
be in full force and effect; and the Acquisition shall occur immediately
following the closing of the sale of the Securities by the Company
hereunder.
(x) The Initial Purchasers shall have received from the Company a
true and correct copy of the Credit Agreement, dated on or about the
Closing Date, and there shall have been no material amendments,
alterations, modifications or waivers of any provisions of the Credit
Agreement since the date of this Agreement; the Credit Agreement shall be
in full force and effect; simultaneously with the closing of the sale of
the Securities by the Company hereunder, the Company shall have available
not less than an aggregate of $250,000,000 in revolving credit
borrowings, pursuant to the Credit Agreement.
(xi) The Issuers shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have reasonably
requested.
Any certificate or document signed by any officer of an Issuer and
delivered to you or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by such Issuer to each Initial Purchaser as to the
statements made therein.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel to the Initial Purchasers. The
Issuers shall furnish to the Initial Purchasers such conformed copies of such
opinions, certificates, letters, schedules, documents
23
-23-
and instruments in such quantities as the Initial Purchasers shall reasonably
request.
9. Indemnification and Contribution. (a) Each Issuer jointly and
severally agrees to indemnify and hold harmless each Initial Purchaser, and
each person, if any, who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities, joint or several, to which such Initial
Purchaser or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Memorandum or (B) any application or other
document, or any amendment or supplement thereto, executed by any Issuer
or based upon written information furnished by or on behalf of any Issuer
filed in any jurisdiction in order to qualify the Securities under the
securities or "Blue Sky" laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in the Memorandum or
any amendment thereto, or any Application, a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading,
and will reimburse, as incurred, each Initial Purchaser and each such
controlling person for any reasonable and documented out-of-pocket legal or
other expenses reasonably incurred by the Initial Purchasers or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action;
provided, however, that none of the Issuers will be liable in any such case to
an Initial Purchaser or any controlling person of such Initial Purchaser to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Memorandum or any amendment thereto or any Application in
reliance upon and in conformity with written information furnished to the
Issuers by or on behalf of such Initial Purchaser specifically for use therein.
This indemnity agreement will be in addition to any liability that the
24
-24-
Issuers may otherwise have to the indemnified parties. None of the Issuers
will, without the prior written consent of the Initial Purchasers, which shall
not be unreasonably withheld or delayed, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification by the Initial Purchasers may be
sought hereunder (whether or not the Initial Purchasers or any person who
controls either of the Initial Purchasers within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release (or any other release reasonably acceptable to the
Initial Purchasers) of the Initial Purchasers and each such controlling person
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Initial Purchaser will severally and not jointly indemnify
and hold harmless the Issuers, their respective directors, officers and each
person, if any, who controls any of the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities to which any of the Issuers or any such director,
officer or controlling person may become subject under the Act, the Exchange
Act, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Memorandum or any amendment thereto or any Application or (ii) the omission or
the alleged omission to state therein a material fact required to be stated in
the Memorandum or any amendment thereto, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to any of the Issuers by or on behalf of such Initial Purchaser
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any reasonable
and documented out-of-pocket legal or other expenses reasonably incurred by any
of the Issuers or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchasers may otherwise have to the indemnified
parties. The Initial Purchasers will not, without the prior written consent of
the Issuers, which shall not be unreasonably withheld or delayed, settle or
25
-25-
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification by any of
the Issuers may be sought hereunder (whether or not any of the Issuers or any
person who controls the Issuers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of any such Issuer and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any indemnified party except to the
extent that such omission results in the forfeiture by the indemnifying party
of substantial rights and defenses. In case any such action is brought against
any indemnified party, and such indemnified party notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded, based on the advice of counsel, that there may be one or more legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to any such indemnifying party then the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable and documented out-of-pocket costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the immediately pre-
26
-26-
ceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the Initial
Purchasers in the case of paragraph (a) of this Section 9 or the Issuers in the
case of paragraph (b) of this Section 9, representing the indemnified parties
under such paragraph (a) or paragraph (b), as the case may be, who are parties
to such action or actions); (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying parties; or (iii) the indemnifying party shall have failed to
assume the defense or retain counsel reasonably satisfactory to the indemnified
party.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), other than as a result of the
proviso to Section 9(a), each indemnifying party, in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the offering of the Securities or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties on
the one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof).
The relative benefits received by the Issuers on the one
27
-27-
hand and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total proceeds from the offering of the Securities (before
deducting expenses other than Initial Purchasers' discounts and commissions)
received by the Issuers bear to the total initial purchasers' discounts and
commissions received by the Initial Purchasers. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Issuers on the one hand or the Initial Purchasers on the other, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Issuers and the Initial
Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Issuers on the one hand and the Initial Purchasers on the other hand were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding any other provision of
this paragraph (d), the Initial Purchasers shall not be obligated to make
contributions hereunder that in the aggregate exceed the total initial
purchasers' discounts and commissions received by the Initial Purchasers under
this Agreement, less the aggregate amount of any damages that the Initial
Purchasers have otherwise been required to pay by reason of the untrue or
alleged untrue statements or the omissions or alleged omissions to state a
material fact, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls any of the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Initial
Purchasers, and each director of any of the Issuers, each officer and each
person, if any, who controls any of the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Issuers.
(e) Notwithstanding anything to the contrary in this Article 9, the
indemnification and contribution provisions of the Registration Rights
Agreement shall govern any claim with respect thereto.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
respective officers and the Initial Purchasers set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Issuers, any of their respective officers or directors, the
Initial Purchasers or any controlling person referred to in Section 9 hereof
and (ii) delivery of and payment for the Securities, and shall be binding upon
and shall inure to the benefit of, any successors,
28
-28-
assigns, heirs, personal representatives of the Issuers, the Initial Purchasers
and indemnified parties referred to in Section 9 hereof. The respective
agreements, covenants, indemnities and other statements set forth in Sections 7
and 9 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (A) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Issuers given in the
event that the Issuers shall have failed, refused or been unable to satisfy all
conditions on its respective part to be performed or satisfied hereunder on or
prior to the Closing Date or, if at or prior to the Closing Date:
(i) any of the Issuers or the Subsidiaries or Lemmerz or the Lemmerz
Subsidiaries shall have sustained any loss or interference with respect
to their respective businesses or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, which loss or interference has had or has a material adverse
effect on the business, condition (financial or other), properties,
prospects or results of operations of the Issuers, the Subsidiaries,
Lemmerz and the Lemmerz Subsidiaries, taken as a whole, or there shall
have been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a
change in management or control of the Issuers), in the business,
condition (financial or other), properties, prospects or results of
operations of the Issuers, the Subsidiaries, Lemmerz and the Lemmerz
Subsidiaries, taken as a whole, except as described in or contemplated by
the Final Memorandum (exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York or American
Stock Exchange shall have been suspended or minimum or maximum prices
shall have been established on any such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States
29
-29-
or (C) any material change in the financial markets of the United States
that, in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the delivery
of the Securities as contemplated by the Final Memorandum, as amended as
of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered or telecopied
and confirmed in writing to the Initial Purchasers c/o CIBC Wood Gundy
Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Esq. If sent to the Company or any of the Subsidiary Guarantors, shall be
mailed, delivered or telegraphed and confirmed in writing, to ▇▇▇▇▇ Wheels
International, Inc., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel and with a copy to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and each of the Issuers and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Issuers contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control
the Initial Purchasers within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of the Initial Purchasers
contained in Section 9 of this Agreement shall also be for the benefit of the
directors of the Issuers, their respective officers and any person or persons
who controls any Issuer within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of Securities from the Initial Purchasers
will be deemed a successor because of such purchase.
30
-30-
14. Joint and Several Obligations. All of the obligations of the
Issuers hereunder shall be joint and several obligations of each of them.
15. Information Supplied by the Initial Purchasers. The statements
set forth in the first legend on the inside front cover of the Memorandum and in
the penultimate and last sentence of the third paragraph and the seventh
paragraph under the heading "Plan of Distribution" constitute the only
information furnished by the Initial Purchasers to the Issuers for purposes of
Section 2(a) hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
31
-31-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Issuers and the Initial Purchasers.
Very truly yours,
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.,
a Delaware corporation
By:
----------------------------------------------
Name:
Title:
▇▇▇▇▇ WHEELS INTERNATIONAL-CALIFORNIA,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
▇▇▇▇▇ WHEELS INTERNATIONAL-GEORGIA,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
▇▇▇▇▇ WHEELS INTERNATIONAL-INDIANA,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
32
-32-
▇▇▇▇▇ WHEELS INTERNATIONAL-MEXICO,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
▇▇▇▇▇ WHEELS INTERNATIONAL-MICHIGAN,
INC., a Michigan corporation
By:
----------------------------------------------
Name:
Title:
MOTOR WHEEL CORPORATION,
an Ohio corporation
By:
----------------------------------------------
Name:
Title:
MWC ACQUISITION SUB, INC.,
a Delaware corporation
By:
----------------------------------------------
Name:
Title:
33
-33-
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
CIBC WOOD GUNDY SECURITIES CORP.
By:
--------------------------
Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
By:
--------------------------
Name:
Title:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
--------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
--------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
--------------------------
Name:
Title:
34
Exhibit A
Subsidiary Guarantors
▇▇▇▇▇ Wheels International-California, Inc.
▇▇▇▇▇ Wheels International-Georgia, Inc.
▇▇▇▇▇ Wheels International-Indiana, Inc.
▇▇▇▇▇ Wheels International-Mexico, Inc.
▇▇▇▇▇ Wheels International-Michigan, Inc.
Motor Wheel Corporation
MWC Acquisition Sub, Inc.
35
Exhibit B-1
Company Subsidiaries
▇▇▇▇▇ (Europe), Ltd.
▇▇▇▇▇ Wheels, S.p.A.
▇▇▇▇▇ Wheels Autokola NH, as
Reliable Transportation Components Inc.
▇▇▇▇▇ Wheels International - Missouri, Inc.
▇▇▇▇▇ Wheels International - Kentuckulus, Inc.
▇▇▇▇▇ Wheels Aftermarket, Inc.
▇▇▇▇▇ Wheels Japan Limited
▇▇▇▇▇ Wheels de Espana, S.A.
HWI Service Corporation
▇▇▇▇▇ Wheels Foreign Sales Corp.
Motor Wheel de Mexico, S.A. de C.V.
Motor Wheel Corporation of Canada, Ltd.
AMW Holdings, Inc.
HL Holdings BV
HL Holdings de Espana
HL Holding GmbH
▇▇▇▇▇ Wheels Hungary Consulting Limited Liability Company
Newco No. 17 Vermogensverwaltungs GmbH (post-Acquisition)
Newco No. 18 Vermogensverwaltungs GmbH (post-Acquisition)
Company Joint Venture and Other Interests
Numbers in parentheses represent percent of total owned by the Company or one
of its subsidiaries.
▇▇▇▇▇ Wheels de Venezuela, C.A. (49)
▇▇▇▇▇ Wheels de Mexico, S.A. de C.V. (40)
Aluminum Wheel Technology, Inc. (50)
Riviera Tool Company (30)
Metalurgica FPS do Brasil, Ltda. (49)
36
-2-
Exhibit B-2
Lemmerz Subsidiaries
Metaalgieterij ▇▇▇▇▇▇ B.V.
Lemmerz Espanola ▇.▇.
▇▇▇▇▇▇▇-Werke GmbH
Lemmerz-Werke Wohnungsbaugesellschaft mbH
Lemmerz Service System N.V.
Lemmerz Belgie N.V.
Lemmerz Comerico e Participacoes SRL
Lemmerz Canada Inc.
PSW Prazisions-und Spezialwerkzeuge AG
Lemmerz-Inci-Jany Sanayi A.S.
Lemmerz Joint Ventures and Other Interests
Numbers in parentheses represent percent of total owned by Lemmerz or one of
its subsidiaries.
Continental Lemmerz (Portugal), Componentes para
Automoveis, Lda. (49)
Borlem S.A. Empreendimentos Industriais (45)
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Industries (25)
Kalyani-Lemmerz Ltd. (25)
Jantas Jant Sanayi ve Ticaret S.A. (25)
Siam Lemmerz Co., Ltd. (25)
Additional Information
See Section 4.3(c), paragraph (ii), of the Lemmerz Disclosure Schedule
delivered pursuant to the Acquisition Agreement regarding certain qualifying
shares held by third parties in certain Lemmerz Subsidiaries.
37
Exhibit C
Principal Amount
Initial Purchaser of Securities
----------------- ----------------
CIBC Wood Gundy Securities Corp. $125,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated 50,000,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc. 25,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 25,000,000
Salomon Brothers Inc 25,000,000
------------
Total $250,000,000
============
38
Exhibit D-1
Form of Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Issuers,
to the effect that:
(i) The Securities have been duly and validly authorized by each of
the Issuers other than ▇▇▇▇▇ Wheels International-Michigan, Inc. (the
"Delaware Issuers") and when executed by the Delaware Issuers and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will have been duly
executed, issued and delivered and will constitute valid and legally
binding obligations of the Delaware Issuers, entitled to the benefits of
the Indenture and enforceable against the Delaware Issuers in accordance
with their terms, except that the enforcement thereof may be subject to
(a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity).
(ii) The Exchange Notes, the Private Exchange Notes and the
guarantees thereof have been duly and validly authorized by the
Delaware Issuers and when executed by the Delaware Issuers and
authenticated by the Trustee in accordance with the provisions of the
Registration Rights Agreement and the Indenture, and delivered to the
Initial Purchasers in accordance with the terms of the Registration
Rights Agreement, will have been duly executed, issued and delivered and
will constitute valid and legally binding obligations of the Delaware
Issuers, entitled to the benefits of the Indenture and enforceable
against the Delaware Issuers in accordance with their terms, except that
the enforcement thereof may be subject to (a) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and
(b) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
39
-2-
(iii) Each of the Delaware Issuers has the requisite corporate power
and corporate authority to execute, deliver and perform its obligations
under the Indenture, the Securities, the Exchange Notes and the Private
Exchange Notes; the Indenture has been duly and validly authorized by the
Delaware Issuers and, when executed and delivered by the Delaware Issuers
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Delaware
Issuers, enforceable against the Delaware Issuers in accordance with its
terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(iv) Each of the Delaware Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Delaware Issuers and, when
executed and delivered by the Delaware Issuers, will constitute a valid
and legally binding agreement of the Delaware Issuers, enforceable
against the Delaware Issuers in accordance with its terms except (i) that
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights to
indemnity or contribution hereunder may be limited by federal and state
securities laws and public policy considerations.
(v) Each of the Delaware Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly and validly
authorized by the Delaware Issuers and, when executed and delivered by
the Delaware Issuers, will constitute a valid and legally binding
agreement of the Delaware Issuers, enforceable against the Delaware
Issuers in accordance with its terms except (i) that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or general prin-
40
-3-
ciples of equity (regardless of whether such enforcement is considered in
a proceeding at law or in equity) and (ii) as any rights to indemnity or
contribution hereunder may be limited by federal and state securities
laws and public policy considerations.
(vi) No Governmental Approval is required for the performance by the
Delaware Issuers of their respective obligations under the Offering
Documents or the consummation of the transactions contemplated thereby
relating to the Securities.
As used in such counsel's opinion, (a) the term "Applicable Laws"
means only the General Corporation Law of the State of Delaware and
those laws, rules and regulations of the State of New York and the United
States of America which, in our experience, are normally applicable to
transactions of the type contemplated by the Purchase Agreement (other
than federal and state securities laws, the TIA and the rules and
regulations of the National Association of Securities Dealers, Inc.)
without having made any special investigation as to the applicability of
any specific law, rule or regulation except as specified herein; (b) the
term "Governmental Authorities" means any Delaware, New York or federal
executive, legislative, judicial, administrative or regulatory body; and
(c) the term "Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing, qualification or
registration with, any Governmental Authority pursuant to Applicable
Laws.
(vii) The execution, delivery and performance by the Delaware
Issuers of each of the Offering Documents and the Credit Agreement and
the consummation by the Delaware Issuers of the transactions contemplated
thereby and the fulfillment of the terms thereof, will not violate or
conflict with the certificate of incorporation or bylaws of any of the
Delaware Issuers.
(viii) Each of the Transactions has been duly authorized by each of
the Delaware Issuers, which is a party thereto.
(ix) The statements set forth under the captions "Description of the
Notes" and "Description of Other Indebtedness" in the Final Memorandum,
insofar as such statements purport to summarize legal documents or
statements of law or legal conclusions are accurate summaries in all
41
-4-
material respects and the Indenture and the Securities conform in all
material respects to the descriptions thereof thereunder.
(x) None of the Issuers or the Subsidiaries is required to register
as an "investment company" or a company "controlled by" an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended.
(xi) Neither the consummation of the transactions contemplated by
the Purchase Agreement nor the sale, issuance, execution or delivery of
the Securities will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(xii) The Indenture appears on its face to be appropriately
responsive in all material respects to the requirements of the TIA.
(xiii) Assuming (i) the accuracy of the representations and
warranties of the Company set forth in Section 2 of the Purchase
Agreement and of you in Section 5 of the Purchase Agreement, (ii) the due
performance by the Company of the covenants and agreements set forth in
Section 6 of the Purchase Agreement and the due performance by you of the
covenants and agreements set forth in Sections 5 and 6 of the Purchase
Agreement, (iii) your compliance with the offering and transfer
procedures and restrictions described in the Offering Memorandum, (iv)
the accuracy of the representations and warranties made in accordance
with the Purchase Agreement and the Offering Memorandum by purchasers to
whom you initially resell Securities and (v) that purchasers to whom you
initially resell Securities receive a copy of the Offering Memorandum
prior to such sale, the offer, sale and delivery of the Securities to you
in the manner contemplated by the Purchase Agreement and the Offering
Memorandum and the initial resale of the Securities by you in the manner
contemplated in the Offering Memorandum and the Purchase Agreement, do
not require registration under the Act and the Indenture does not require
qualification under the TIA, it being understood that we express no
opinion as to any subsequent resale of any Security.
In addition, we have participated in conferences with officers and
other representatives of the Issuers, representatives of the independent public
accountants and representatives of the Initial Purchasers at which the contents
of the Memoran-
42
-5-
dum were discussed and, although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum (except as indicated in clause (ix) above)
and have not made any independent check or verification thereof, on the basis
of the foregoing (relying as to materiality to a large extent upon the
statements of officers and other representatives of each of the Issuers) no
facts have come to our attention that have caused us to believe that the Final
Memorandum as of its date and as of the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that we express no opinion on or belief with respect to the financial
statements or other financial and statistical data or information included in
the Final Memorandum or on the information contained in the Final Memorandum
concerning Lemmerz and the Lemmerz Subsidiaries).
43
Exhibit D-2
Form of Opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel to the Company, to
the effect that:
(i) Each of the Issuers has been duly incorporated and is validly
existing in good standing, as a corporation under the laws of its
jurisdiction of incorporation, with the requisite corporate power and
authority to own its properties and conduct its business as described in
the Final Memorandum and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except when the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect; the outstanding shares of capital stock of the Issuers and the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights and, in the case of the Subsidiary Guarantors and the
Subsidiaries, except in connection with the Credit Agreement, are owned
free and clear of all liens, encumbrances, equities and restrictions on
transferability (other than those imposed by the Act and the state
securities or "Blue Sky" laws); to the best of my knowledge, except as
set forth in the Final Memorandum, no options, warrants or other rights
to purchase from any Issuer or any Subsidiary or, agreements or other
obligations of any Issuer or any Subsidiary to issue or other rights to
cause the Company, to convert any obligation into, or exchange any
securities for, shares of capital stock or ownership interests in any
Issuer or any Subsidiary are outstanding.
(ii) The Guarantee has been duly and validly authorized by ▇▇▇▇▇
Wheels International-Michigan, Inc. ("HWIM") and Motor Wheel Corporation
("MWC") and when the Securities are executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will have been duly
executed, issued and delivered and will constitute valid and legally
binding obliga-
44
-2-
tion of HWIM and MWC, enforceable against HWIM and MWC in accordance with
its terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
(iii) The guarantee of the Exchange Notes and the Private Exchange
Notes have been duly and validly authorized by HWIM and MWC and when the
Exchange Notes and the Private Exchange Notes have been executed by the
Company and authenticated by the Trustee in accordance with the
provisions of the Registration Rights Agreement and the Indenture, and
delivered to the Initial Purchasers in accordance with the terms of the
Registration Rights Agreement, will have been duly executed, issued and
delivered and will constitute a valid and legally binding obligation of
HWIM and MWC, enforceable against HWIM and MWC in accordance with its
terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(iv) Each of HWIM and MWC has the requisite corporate power and
corporate authority to execute, deliver and perform its obligations under
the Indenture, the Securities, the Exchange Notes and the Private
Exchange Notes; the Indenture has been duly and validly authorized by
HWIM and MWC and, when executed and delivered by HWIM and MWC (assuming
the due authorization, execution and delivery by the Trustee), will
constitute a valid and legally binding agreement of HWIM and MWC,
enforceable against HWIM and MWC in accordance with its terms, except
that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity.
(v) Each of HWIM and MWC has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The
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Registration Rights Agreement has been duly and validly authorized by
HWIM and MWC and, when executed and delivered by HWIM and MWC, will
constitute a valid and legally binding agreement of HWIM and MWC,
enforceable against HWIM and MWC in accordance with its terms except (i)
that the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights
to indemnity or contribution hereunder may be limited by federal and
state securities laws and public policy considerations.
(vi) Each of HWIM and MWC has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly and validly
authorized by HWIM and MWC and, when executed and delivered by HWIM and
MWC, will constitute a valid and legally binding agreement of HWIM and
MWC, enforceable against HWIM and MWC in accordance with its terms except
(i) that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally
or general principles of equity (regardless of whether such enforcement
is considered in a proceeding at law or in equity) and (ii) as any
rights to indemnity or contribution hereunder may be limited by federal
and state securities laws and public policy considerations.
(vii) No consent, approval, authorization or order of any
governmental agency or body, or to the best of my knowledge, any court,
is required for the performance of any of the Offering Documents or any
of the agreements contemplated thereby or delivered in connection
therewith, or the consummation of the transactions contemplated thereby,
except such as may be required and have been obtained as described in the
Final Memorandum or as may be required under the Act, the TIA or state
securities or "Blue Sky" laws in connection with the purchase and
distribution of the Securities or the exchange of the Exchange Notes and
the Private Exchange Notes.
(viii) None of the Issuers or the Subsidiaries is (a) in violation of
its certificate of incorporation or bylaws, (b) in violation of any
statute, judgment, decree,
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order, rule or regulation applicable to any of its properties or assets,
which violation would, individually or in the aggregate, have a Material
Adverse Effect or (c) in breach of or in default under any of the
Offering Documents or any material contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement, permit,
certificate or other material agreement or instrument to which it is a
party or to which it is subject, which breach or default would
individually or in the aggregate, have a Material Adverse Effect.
(ix) The execution, delivery and performance by the Issuers, to the
extent each is a party thereto, of each of the Offering Documents and the
Credit Agreement and the consummation by the Issuers of the transactions
contemplated thereby and the fulfillment of the terms thereof, will not
violate, conflict with or constitute or result in a breach of or a
default under (or an event that with notice or lapse of time, or both,
would constitute a breach of or a default under) any of the terms or
provisions of (a) the certificate of incorporation or bylaws of HWIM, (b)
any material indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement or other material agreement or
instrument to which any of the Issuers or the Subsidiaries is a party or
to which any of their respective properties or assets are subject or (c)
to the best of my knowledge (assuming compliance with all applicable
Federal and state securities and "Blue Sky" laws) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency or
body applicable to any of the Issuers or the Subsidiaries or any of their
respective properties or assets, which violation, conflict, breach or
default would, individually or in the aggregate, have any Material
Adverse Effect.
(x) Except as described in the Final Memorandum, there are no legal
or governmental proceedings pending or threatened to which any of the
Issuers or the Subsidiaries is a party or to which the respective
properties or assets of the Issuers or the Subsidiaries are subject that
would be required to be described in a prospectus pursuant to the Act
that are not described in the Final Memorandum, or that seek to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Securities to the Initial Purchasers or the consummation
of the transactions described in the Final Memorandum under the captions
"Use of Proceeds" or "The Lemmerz Acquisition".
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(xi) Each of the Transactions has been duly authorized by HWIM to the
extent it is or will be a party thereto.
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, outside counsel for the Company, your counsel
and your representatives at which the contents of the Memorandum and related
matters were discussed and, although I am not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum, I advise you that, on the basis of the
foregoing (relying, with respect to Lemmerz, primarily upon (i) the
representations and warranties of Lemmerz and the shareholders of Lemmerz
contained in the Acquisition Agreement and (ii) the due diligence reports
prepared by counsel and other representatives of the Company retained in
connection with the Company's acquisition of Lemmerz (copies of which have been
provided to your counsel in connection with their due diligence review of the
Company); provided, however, that I have not independently investigated or
verified, nor do I assume any responsibility for, the information contained in
such reports), no facts have come to my attention that lead me to believe that
the Final Memorandum as of its date and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that I have not been requested to and do not make any comment with respect to
the financial statements and the notes thereto and other financial and
accounting information included or incorporated by reference in the Final
Memorandum).