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FORM OF
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(a Delaware corporation)
1,400,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: January __, 1999
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Table of Contents
INTERNATIONAL PURCHASE AGREEMENT..............................................1
SECTION 1. Representations and Warranties...............................4
(i) Compliance with Registration Requirements...............4
(ii) Independent Accountants................................5
(iii) Financial Statements..................................5
(iv) No Material Adverse Change in Business.................6
(v) Good Standing of the Company............................6
(vi) Good Standing of Subsidiaries..........................6
(vii) Capitalization........................................7
(viii) Authorization of Agreement...........................7
(ix) Authorization and Description of Securities............7
(x) Absence of Defaults and Conflicts.......................8
(xi) Absence of Labor Dispute...............................8
(xii) Absence of Proceedings................................9
(xiii) Accuracy of Exhibits.................................9
(xiv) Possession of Intellectual Property...................9
(xv) Absence of Further Requirements........................9
(xvi) Possession of Licenses and Permits...................10
(xvii) Title to Property...................................10
(xviii) Compliance with Cuba Act...........................11
(xix) Investment Company Act...............................11
(xx) Environmental Laws....................................11
(xxi) Registration Rights..................................12
(xxii) Taxes...............................................12
(xxiii) Maintenance of Adequate Insurance..................12
(xxiv) Merger...............................................12
SECTION 2. Sale and Delivery to International
Managers; Closing..............................13
(a) Initial International Securities..........................13
(b) International Option Securities...........................13
(c) Payment...................................................14
(d) Denominations; Registration...............................15
SECTION 3. Covenants of the Company....................................15
(a) Compliance with Securities Regulations and
Commission Requests.................................15
(b) Filing of Amendments......................................15
(c) Delivery of Registration Statements.......................16
(d) Delivery of Prospectuses..................................16
(e) Continued Compliance with Securities Laws.................16
(f) Blue Sky Qualifications...................................17
(g) Rule 158..................................................17
(h) Use of Proceeds...........................................17
-i-
(i) Listing...................................................17
(j) Restriction on Sale of Securities.........................17
(k) Reporting Requirements....................................18
(l) Compliance with Rule 463..................................18
(m) Compliance with NASD Rules................................18
SECTION 4. Payment of Expenses.........................................19
(a) Expenses..................................................19
(b) Termination of Agreement..................................19
SECTION 5. Conditions of International
Managers' Obligations..........................19
(a) Effectiveness of Registration Statement...................20
(b) Opinion of Counsel for Company............................20
(c) Opinion of Counsel for the International Managers.........20
(d) Officers' Certificate.....................................21
(e) Accountants' Comfort Letter...............................21
(f) Bring-down Comfort Letter.................................21
(g) Approval of Listing.......................................21
(h) No Objection..............................................22
(i) Lock-up Agreements........................................22
(j) Purchase of Initial U.S. Securities.......................22
(k) Conditions to Purchase of International
Option Securities...................................22
(i) Officers' Certificate..................................22
(ii) Opinion of Counsel for Company........................22
(iii) Opinion of Counsel for the International
Managers.......................................22
(iv) Bring-down Comfort Letter.............................22
(l) Additional Documents......................................23
(m) Termination of Agreement..................................23
SECTION 6. Indemnification.............................................23
(a) Indemnification of International Managers.................23
(b) Indemnification of Company, Directors and
Officers............................................25
(c) Actions against Parties; Notification.....................25
(d) Settlement without Consent if Failure to
Reimburse...........................................26
(e) Indemnification for Reserved Securities...................26
SECTION 7. Contribution................................................26
SECTION 8. Representations, Warranties and
Agreements to Survive Delivery.................28
-ii-
SECTION 9. Termination of Agreement....................................28
(a) Termination; General......................................28
(b) Liabilities...............................................29
SECTION 10. Default by One or More of
the International Managers.....................29
SECTION 11. Default by the Company.....................................30
SECTION 12. Notices....................................................30
SECTION 13. Parties....................................................30
SECTION 14. GOVERNING LAW AND TIME.....................................30
SECTION 15. Effect of Headings.........................................31
SCHEDULES
Schedule A - List of Underwriters..................................Sch A-1
Schedule B - Pricing Information................................Sch B-1
Schedule C - List of Persons Subject to Lock-up....................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................A-1
Exhibit B - Form of Lock-up Letter.....................................B-1
ANNEXES
Annex A - Form of Comfort Letter.......................................A-1
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(a Delaware corporation)
1,400,000 Shares of Common Stock
(Par Value $0.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
January __, 1999
MERRILL LYNCH INTERNATIONAL
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
as Lead Managers of the several International Managers
c/o Merrill Lynch International
20 Farringdon Road
London EC1M 3NH
England
Ladies and Gentlemen:
American Axle & Manufacturing Holdings, Inc., a Delaware corporation
(the "Company") confirms its agreement with Merrill Lynch International
("Merrill Lynch") and each of the other International Managers named in
Schedule A hereto (collectively, the "International Managers", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Credit Suisse First Boston Corporation,
Donaldson, Lufkin & Jenrette International, Morgan Stanley & Co. International
Limited and PaineWebber International (U.K.) Limited are acting as lead
managers (in such capacity, the "Lead Managers"), with respect to (i) the sale
by the Company and the purchase by the International Managers, acting severally
and not jointly, of the respective numbers of shares of Common Stock, par value
$0.01 per share, of the Company ("Common Stock") set forth in Schedule A hereto
and (ii) the grant by the Company to the Lead Managers, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 210,000 additional shares of Common Stock to cover over-allotments,
if any. The aforesaid 1,400,000 shares of Common Stock (the "Initial
International Securities") to be purchased by the International Managers and all
or any part of the 210,000 shares of Common Stock subject to the option
described in Section 2(b) hereof
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(the "International Option Securities") are hereinafter called, collectively,
the "International Securities".
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 5,600,000 shares of Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
inside the United States and Canada (the "U.S. Underwriters") for whom Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse
First Boston Corporation, Donaldson, Lufkin & Jenrette Securities Corporation,
Morgan Stanley & Co. Incorporated and PaineWebber Incorporated are acting as
representatives (the "Representatives") and the grant by the Company to the
U.S. Underwriters, acting severally and not jointly, of an option to purchase
all or any part of the U.S. Underwriters' pro rata portion of up to 840,000
additional shares of Common Stock solely to cover over allotments, if any (the
"U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities." It is
understood that (a) the Company is not obligated to sell, and the International
Managers are not obligated to purchase, any Initial International Securities
unless all of the Initial U.S. Securities are contemporaneously purchased by
the U.S. Underwriters and (b) the Company is not obligated to sell, and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The International Mangers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities
and the Initial U.S. Securities are hereinafter collectively called the
"Initial Securities," and the International Securities, and the U.S. Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers propose to
make a public offering of the International Securities as soon as the Lead
Managers deem advisable after this Agreement has been executed and delivered.
The Company and the International Managers understand that up to
700,000 shares of the Initial U.S. Securities to be purchased by
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the U.S. Underwriters (the "Reserved Securities") shall be reserved for sale by
the U.S. Underwriters to certain eligible employees and persons having business
relationships with the Company, as part of the distribution of the Initial U.S.
Securities by the U.S. Underwriters, subject to the terms of this Agreement,
the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are
not orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the first business day after the
date of this Agreement, such Reserved Securities may be offered to the public
as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-53491) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). Two forms of prospectuses are to be used in connection with the
offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the
U.S. Securities (the "Form of U.S. Prospectus"). The Form of U.S. Prospectus is
identical to the Form of International Prospectus, except for the front cover
and back cover pages and the information under the caption "Underwriting". The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." The Form of International Prospectus and
Form of U.S. Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration
3
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final Form of International Prospectus and the final Form of
U.S. Prospectus in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the
"International Prospectus" and the "U.S. Prospectus" respectively, and
collectively the "Prospectuses." If Rule 434 is relied on, the terms
"International Prospectus" and "U.S. Prospectus" shall refer to the preliminary
International Prospectus dated January 8, 1999 and preliminary U.S. Prospectus
dated January 8, 1999, respectively, each together with the applicable Term
Sheet, and all references in this Agreement to the date of the Prospectuses
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
International Prospectus, the U.S. Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties. The Company represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each International
Manager as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not
4
misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements were issued and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will 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. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectuses shall not be "materially different", as such term is
used in Rule 434, from the prospectuses included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the International
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any International Manager
through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as
part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and each of the
Prospectuses delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copy
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedule included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included
in the Registration Statement and the Prospectuses, together with the
related schedule and notes, present fairly in all material respects
the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the respective statement of
income, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedule included in
the Registration Statement presents fairly in all material respects in
accordance with GAAP the information required to be stated therein.
The
5
selected financial data and the summary financial information included
in the Prospectuses present fairly in all material respects the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The pro forma financial statement and the
related notes thereto included in the Registration Statement and the
Prospectuses present fairly in all material respects the information
shown therein, have been prepared and presented in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein,
(A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries (taken as a
whole), whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries (taken as a whole), and
(C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and
perform its obligations under this Agreement and under the U.S.
Purchase Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and
6
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only Subsidiaries of the
Company are the Subsidiaries listed on Exhibit 21 to the Registration
Statement.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses in
the column entitled "Historical" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement
or the International Purchase Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses
or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses). The shares of issued and outstanding
capital stock have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of
capital stock was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(viii) Authorization of Agreement. This Agreement and the
U.S. Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
to the U.S. Underwriters pursuant to the U.S. Purchase Agreement and,
when issued and delivered by the Company pursuant to this Agreement
and the U.S. Purchase Agreement, respectively, against payment of the
consideration set forth herein and therein, will be validly issued and
fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the
7
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default, or, to the Company's knowledge, alleged by any other
party to be in default, in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the U.S. Purchase Agreement and the consummation
of the transactions contemplated herein and therein and the use of the
proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds" and compliance by the
Company with its obligations under this Agreement and the U.S.
Purchase Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company
or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case,
8
may reasonably be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the U.S. Purchase
Agreement or the performance by the Company of its obligations
hereunder and thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described and filed as required, and the descriptions
of all such contracts and documents in the Prospectuses are complete
and accurate in all material respects.
(xiv) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
9
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement or the U.S. Purchase Agreement,
in connection with the offering, issuance or sale of the Securities
hereunder or thereunder or the consummation of the transactions
contemplated by this Agreement or the U.S. Purchase Agreement, except
such as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state or foreign securities
laws.
(xvi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xvii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the
Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties
described in the Prospectuses, are in full force and effect, and
neither the Company nor any subsidiary has any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the
10
continued possession of the leased or subleased premises under any
such lease or sublease.
(xviii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
(xix) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, legally binding policy or rule of common law or any judicial or
legally binding administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws (except for such permits, authorizations and
approvals the absence of which would not result in a Material Adverse
Effect) and are each in compliance with their requirements, (C) there
are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its
11
subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxi) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act except as described in
the Prospectuses. All applicable "piggy-back" registration rights
otherwise applicable and entitling the persons holding such rights to
have any securities so registered have been duly and validly waived or
otherwise relinquished in respect of the Registration Statement and
the transactions contemplated thereby.
(xxii) Taxes. The Company and each of its subsidiaries have
filed all necessary federal, state, local and foreign income, payroll,
franchise and other tax returns (after giving effect to extensions) and
have paid all taxes shown as due thereon or with respect to any of its
properties, except for taxes being contested in good faith for which
adequate reserves have been provided, and there is no tax deficiency
that has been, or to the knowledge of the Company is likely to be,
asserted against the Company, any of its subsidiaries or any of their
properties or assets that would result in a Material Adverse Effect.
(xxiii) Maintenance of Adequate Insurance. The Company and
each of its subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as is reasonably prudent in the business in which it is
engaged or proposed to engage after giving effect to the transactions
described in the Prospectuses; and the Company does not have any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not result in a Material Adverse
Effect.
(xxiv) Merger. The Company and American Axle & Manufacturing
of Michigan, Inc., a Michigan corporation ("AAMM"), had all corporate
power and authority to carry out the merger of AAMM into the Company
(the "Merger"), and the Company, AAMM and their respective
stockholders have taken all action required by law and their
respective charters and bylaws or otherwise to approve the Merger; the
consummation of the Merger did not contravene any provision of
applicable law or the respective charters or bylaws of the Company and
AAMM or any provision of any material agreement or other material
instrument binding upon the Company or AAMM or any order, writ,
injunction or decree of any jurisdiction, court or governmental body,
and no consent, approval, authorization or order of any court or
governmental agency or body was required for the consummation of the
Merger, except such as were obtained; the Merger became
12
effective on January 22, 1999, in accordance with the laws of Michigan
and Delaware; and the Merger will not result in the recognition of any
material liability under the Internal Revenue Code of 1986, as amended
(the "Code") or otherwise for taxes for the Company or any of its
subsidiaries.
Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Lead Managers or to counsel for the International
Managers and the U.S. Underwriters shall be deemed a representation and
warranty by the Company to each International Manager and each U.S. Underwriter
as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial International Securities. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to each International
Manager, severally and not jointly, and each International Manager, severally
and not jointly, agrees to purchase from the Company, at the price per share
set forth in Schedule B, that number of Initial International Securities set
forth in Schedule A opposite the name of such International Manager, plus any
additional number of Initial International Securities which such International
Manager may become obligated to purchase pursuant to the provisions of Section
10 hereof, subject, in each case, to such adjustments among the International
Managers as the Lead Managers in their sole discretion shall make to eliminate
any sales or purchases of fractional securities.
(b) International Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional 210,000 shares of Common Stock, at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery (a "Date of Delivery") shall be determined by the
Global Coordinator, but shall not be later than seven full business days
13
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of
Initial International Securities set forth in Schedule A opposite the name of
such International Underwriter bears to the total number of Initial
International Securities, and the Company shall sell such number of
International Option Securities, subject in each case to such adjustments as
the Global Coordinator in its discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial International Securities shall be made at the
offices of Mayer Brown & Platt, 190 South LaSalle Street, Chicago, Illinois, or
at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by
the Closing Time or the relevant Date of
14
Delivery, as the case may be, but such payment shall not relieve such
International Manager from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial International Securities and the International Option Securities, if
any, will be made available for examination and packaging by the Lead Managers
in The City of New York not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectuses or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such
15
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the Global
Coordinator or counsel for the International Managers shall reasonably object
in writing within a reasonable period of time.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers and counsel for the International Managers,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead Manager without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment thereto
furnished to the International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"),
such number of copies of the International Prospectus (as amended or
supplemented) as such International Manager may reasonably request. The
International Prospectus and any amendments or supplements thereto furnished to
the International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion
of the distribution of the Securities as contemplated in this Agreement, the
U.S. Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of counsel for the International
Managers or for the Company, to amend the Registration Statement or amend or
supplement the Prospectuses in order that the Prospectuses will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a
16
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectuses in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the Company
will furnish to the International Managers such number of copies of such
amendment or supplement as the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation
in respect of doing business in any jurisdiction in which it is not otherwise
so subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the Securities on the New York Stock Exchange and will
file with the New York Stock Exchange all documents and notices required by the
New York Stock Exchange of companies that have securities listed thereon.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not,
17
without the prior written consent of Merrill Lynch, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or under
the U.S. Purchase Agreement, (B) grants of stock options and other awards
pursuant to the terms of the Company's stock option plans in effect on the date
hereof and described in the Prospectuses, (C) any shares of Common Stock issued
by the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectuses or
(D) offers, sales and issuances of shares of Common Stock, options, rights or
warrants to purchase or any securities convertible into or exercisable or
exchangeable for Common Stock in connection with acquisitions of businesses,
companies or assets by the Company so long as the recipients of such shares,
options, rights, warrants or convertible securities are subject to the
restrictions of this Section 3(j) until the expiration of such 180 day period.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with Rule 463. The Company will comply with the
reporting requirements of Rule 463 of the 1933 Act Regulations.
(m) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for
a period of three months following the date of effectiveness of the
Registration Statement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction
upon such securities for such period of time. Should the Company release, or
seek to release, from such restrictions any of the Reserved Securities, the
Company agrees to reimburse the Underwriters for any reasonable expenses
including, without
18
limitation, legal expenses they incur in connection with such release.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, issuance and delivery of the
certificates for the Securities to the International Managers, including any
stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the International Managers,
(iii) the fees and disbursements of the Company's counsel, accountants and other
advisors, (iv) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation, printing and
delivery of the Blue Sky Survey and any supplement thereto, (v) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vi)
the fees and expenses of any transfer agent or registrar for the Securities,
(vii)the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Securities, (viii) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange and
(ix) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale
to employees and others having a business relationship with the Company. It is
understood, however, that except as provided in this Section or Sections 6, 7 or
9 hereof, the Underwriters shall pay their own costs and expenses, including the
fees and disbursements of their counsel, stock transfer taxes due upon resale of
any of the Securities by them and any advertising expenses incurred in
connection with any offers they may make.
(b) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5 (other than as a
result of the failure to satisfy the condition set forth in Section 5(h)),
Section 9(a)(i) or Section 11 hereof, the Company shall reimburse the
International Managers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of
19
the Company contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected
to rely upon Rule 434, a Term Sheet shall have been filed with the Commission
in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead Managers
shall have received the favorable opinion, dated as of Closing Time, of Simpson
Thacher & Bartlett, counsel for the Company, and Patrick S. Lancaster, Esq.,
General Counsel of the Company, in form and substance satisfactory to counsel
for the International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers to the effect set
forth in Exhibits A-1 and A-2 hereto and to such further effect as counsel to
the International Managers may reasonably request.
(c) Opinion of Counsel for the International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Mayer, Brown & Platt, counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the other
International Underwriters with respect to the matters set forth in clauses (i)
(solely as to the valid existence and good standing and corporate power and
authority of the Company), (ii) (solely as to the Securities), (iii) (solely as
to preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), (iv) through (vi), inclusive, (vii) (solely
as to the information in the Prospectus under "Description of Capital
Stock--Common Stock"), (xvi) and the penultimate paragraph of Exhibit A-1
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the Lead
Managers.
20
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or any of its subsidiaries whether or not arising in
the ordinary course of business, and the Lead Managers shall have received a
certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Lead Managers shall have received from each of Deloitte & Touche
LLP and Ernst & Young LLP a letter dated such date, in form and substance
satisfactory to the Lead Managers together with signed or reproduced copies of
such letter for each of the other International Managers to the effect set
forth in Annex A hereto and otherwise containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from each of Deloitte & Touche LLP and Ernst & Young LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
21
(h) No Objection. The NASD shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of Exhibit
B hereto signed by the persons listed on Schedule C hereto.
(j) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement, the U.S. Underwriters shall have purchased the Initial
U.S. Securities under the U.S. Purchase Agreement.
(k) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in Section
2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company and any
subsidiary of the Company shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Simpson Thacher & Bartlett, counsel for the Company, and Patrick S.
Lancaster, General Counsel for the Company, in form and substance
satisfactory to counsel for the International Managers, dated such
Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for the International Managers. The
favorable opinion of Mayer, Brown & Platt, counsel for the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from each of
Deloitte & Touche LLP and Ernst & Young LLP, in form and substance
satisfactory to the Lead Managers and dated such Date
22
of Delivery, substantially in the same form and substance as the
letter furnished to the Lead Managers pursuant to Section 5(f) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished with
such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Lead Managers and counsel for the
International Managers.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to purchase
the relevant International Option Securities, may be terminated by the Lead
Managers by notice to the Company at any time at or prior to Closing Time or
such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
23
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any International Manager through the Lead Managers expressly for
use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto) and (B) as to any preliminary prospectus, this indemnity
agreement shall not inure to the benefit of any International Manager or any
person, if any, who controls any International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act on account of any
loss, liability, claim, damage or expense arising from the fact that such
International Manager sold Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
International Prospectus (as then amended or supplemented) in any case where
such delivery is required by the 1933 Act if the Company has previously
furnished copies thereof to such International Manager in the quantities
requested and the loss, liability, claim, damage or expense of such
International Manager results from an untrue statement or omission of a
material fact contained in such preliminary prospectus which the Company has
sustained the burden of proving was corrected in the International Prospectus
(as then amended or supplemented).
24
(b) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such International Manager through the Lead
Managers expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the International Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch; and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
in respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
25
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel which are reimbursable
under this Section 6 or Section 7, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms
of such settlement, which notice shall include a statement by the indemnified
party that it proposes to enter into such settlement on such terms to the
extent permitted by this Section 6(d), at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees to indemnify and
hold harmless the Underwriters from and against any and all losses, expenses
and liabilities incurred by them as a result of (i) the failure of the
designated employees or other persons to pay for and accept delivery of shares
which, immediately following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase and (ii) the
violation of any securities laws of foreign jurisdictions where Reserved
Securities have been offered.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the International Managers on the other hand from
the offering of the International Securities pursuant to this Agreement or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the International Managers on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims,
26
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
International Managers on the other hand in connection with the offering of the
International Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the International Managers agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
27
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Managers within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International Securities set forth opposite their respective names in Schedule
A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
International Manager or controlling person, or by or on behalf of the Company,
and shall survive delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company or any of its subsidiaries, whether or not arising in the ordinary
course of business, or (ii) if there has occurred any material adverse change
in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the New York Stock Exchange has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices
28
have been required, by the New York Stock Exchange or by order of the
Commission, the NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the International Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted Securities"), the
Lead Managers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting International Managers, or
any other underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth. If, however, the Lead Manager shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of the
non-defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the International Managers to purchase and of the Company to sell
the International Option Securities to be purchased and sold on such Date of
Delivery, shall terminate without liability on the part of any non-defaulting
International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the International Managers to purchase and the Company to sell
the relevant International Option Securities, as the case may be, either (i)
the Lead Managers or
29
(ii) the Company shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As used herein, the
term "International Manager" includes any person substituted for a
International Manager under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at
Closing Time or at the Date of Delivery to sell the number of International
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall
remain in full force and effect. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at Merrill Lynch,
Sears Tower Building, Suite 5500, Chicago, Illinois 60606, attention of Michael
O'Grady; and notices to the Company shall be directed to it at 1840 Holbrook
Avenue, Detroit, Michigan 48212, attention of Patrick S. Lancaster, Esq.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the International Managers, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
International Managers the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the International Managers, the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any International Manager shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
30
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
31
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the International Managers and the Company in accordance with
its terms.
Very truly yours,
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LIMITED
By: MERRILL LYNCH INTERNATIONAL
By ---------------------------------------------
Authorized Signatory
For themselves and as Lead Manager of the other International Managers named in
Schedule A hereto.
32
SCHEDULE A
Number of
Initial
Name of International Manager International
Securities
Merrill Lynch International...........................
Credit Suisse First Boston Corporation................
Donaldson, Lufkin & Jenrette International............
Morgan Stanley & Co. International Limited............
PaineWebber International (U.K.) Limited..............
-------------
Total............................................. 1,400,000
=============
Sch A-1
SCHEDULE B
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
1,400,000 Shares of Common Stock
(Par Value $0.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $-----.
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $____________,
being an amount equal to the initial public offering price set forth
above less $_________ per share; provided that the purchase price per
share for any International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.
Sch B-1
SCHEDULE C
PERSONS SUBJECT TO LOCK-UP
Blackstone Capital Partners II Merchant Banking Fund L.P.
Blackstone Offshore Capital Partners II L.P.
Blackstone Family Investment Partnership II L.P.
Blackstone Management Associates II L.L.C.
Jupiter Capital Corporation
Richard E. Dauch
B.G. Mathis
Michael D. Alexander
Joel D. Robinson
Marion A. Cumo, Sr.
David C. Dauch
Richard F. Dauch
George J. Dellas
David J. Demos
Patrick S. Lancaster
Allan R. Monich
Daniel V. Sagady, P.E.
Michael D. Straney
Gary J. Witosky
Robert A. Krause
Glenn H. Hutchins
Bret D. Pearlman
David A. Stockman
Sch C-1
Exhibit A-1
FORM OF OPINION OF SIMPSON THACHER & BARTLETT,
COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws
of the State of Delaware and has full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement and the
International Purchase Agreement.
(ii) All outstanding shares of the Company's Common Stock and the
Securities have been duly authorized, and all outstanding
shares of the Company's Common Stock have been and, upon
payment and delivery in accordance with the Purchase
Agreements, the Securities will be, validly issued, fully
paid and nonassessable.
(iii) There are no preemptive rights under federal law, under the
Delaware General Corporation Law or under any agreement or
other instrument known to us to subscribe for or purchase the
Securities. There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Company's capital
stock pursuant to the Company's charter or by-laws or, except
as otherwise disclosed in the Registration Statement and
except for restrictions on transfer applicable to parties to
the Stockholders' Agreement or shares of the Company's Common
Stock issued under the Option Plan or the Replacement Plan (as
such terms are defined in the Registration Statement), any
agreement or other instrument.
(iv) Each of the U.S. Purchase Agreement and the International
Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Registration Statement [, including any Rule 462(b)
Registration Statement,] has become effective under the 1933
Act, and the Prospectuses were timely filed on ___________,
1999 pursuant to Rule 424(b) and, to such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement [or any Rule 462(b) Registration
Statement] has been issued or proceeding for that purpose has
been instituted or threatened by the Commission.
(vi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable
A-1-1
statutory requirements, with any applicable requirements of
the charter and by-laws of the Company and the requirements
of the New York Stock Exchange.
(vii) The statements made in the Prospectuses under the caption
"Description of Capital Stock," insofar as they purport to
constitute summaries of the terms of the Company's Common
Stock (including the Securities), constitute accurate
summaries of the terms of such Common Stock in all material
respects.
(viii) The statements made in the Prospectuses under the captions
"Prospectus Summary -- The Company -- The 1994 Acquisition,"
"-- The Recapitalization" and "-- Business Strategy -- Pursue
Selected Acquisition Opportunities"; "Risk Factors -- Reliance
on GM," "-- Transition from CSA to MOU and LPCs," "-- Labor
Relations," "-- Leverage," "-- Debt Covenants," "-- Inventory
Management; Reliance on Single Source Suppliers," "-- Control
by Principal Stockholder" and "-- Shares Eligible for Future
Sale"; "The Recapitalization"; "Use of Proceeds"; "Dividend
Policy"; "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Company Overview,"
"-- Liquidity and Capital Resources," "-- Financial
Instruments Market Risk" and "-- Litigation and Environmental
Regulations"; "Business -- The 1994 Acquisition," "-- Business
Strategy -- Pursue Selected Acquisition Opportunities,"
"-- Contractual Arrangements with GM," "--Associates," and
"-- Environmental Matters"; "Management -- Stock Options,"
"-- Indemnification of Officers and Directors" and
"-- Employment Agreement"; "Certain Transactions";
"Description of Certain Indebtedness," and "Shares Eligible
for Future Sale," insofar as they purport to constitute
summaries of the terms of contracts and other documents,
constitute accurate summaries of the terms of such contracts
and other documents in all material respects; and, to such
counsel's knowledge, there are no contracts, instruments or
other documents of a character required to be described in the
Registration Statement or Prospectuses or to be filed as
exhibits to the Registration Statement which are not described
and filed as required.
(ix) The statements made in the Prospectuses under the caption
"Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Litigation and Environmental
Regulations," "Business -- Environmental Matters,"
"Description of Capital Stock," and in the Registration
Statement under Item 14, insofar as they purport to
constitute summaries of the terms of New York or federal
statutes or the Delaware General Corporation Law, rules and
regulations thereunder, legal proceedings or legal
conclusions, or the Company's charter and bylaws, constitute
accurate summaries thereof in all material respects.
(x) The statements made in the Prospectuses under the caption
"Certain United States Federal Tax Consequences to Non- U.S.
Holders of Common Stock," insofar as they purport to
constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters
described therein in all material respects.
A-1-2
(xi) No filing, consent, approval, authorization, registration or
qualification of or with any federal or New York governmental
agency or body or any Delaware governmental agency or body
acting pursuant to the Delaware General Corporation Law or,
to such counsel's knowledge, any federal or New York court or
any Delaware court acting pursuant to the Delaware General
Corporation Law is required for the issue and sale of the
Securities by the Company and the compliance by the Company
with all of the provisions of the U.S. Purchase Agreement and
the International Purchase Agreement, except for the
registration under the 1933 Act of the Securities, and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters.
(xii) The issue and sale of the Securities by the Company, the
execution and delivery by the Company of the U.S. Purchase
Agreement and International Purchase Agreement, the
consummation of the transactions provided for in the U.S.
Purchase Agreement and the International Purchase Agreement,
the compliance by the Company with all of the provisions of
the U.S. Purchase Agreement and the International Purchase
Agreement and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption
"Use of Proceeds" do not and will not, whether with or
without the giving of notice or lapse of time or both,
conflict with, breach or result in a default or, except as
contemplated under "Use of Proceeds" in the Registration
Statement, a Repayment Event (as defined in Section 1(x) of
the U.S. Purchase Agreement) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant
to, any indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument
filed as an exhibit to the Registration Statement (except for
such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect),
nor will such action result in a violation of the charter or
bylaws of the Company or any subsidiary, or any federal or New
York statute or the Delaware General Corporation Law or any
rule or regulation that has been issued pursuant to any
federal or New York statute or the Delaware General
Corporation Law or any judgment, order, writ or decree known
to us issued pursuant to any federal or New York statute or
the Delaware General Corporation Law by any court or
governmental agency or body or court having jurisdiction over
the Company or any of its subsidiaries or any of their
properties, assets or operations.
A-1-3
(xiii) To such counsel's knowledge, there are no contracts or
agreements between the Company or any subsidiary and any
person granting such person the right (other than rights
which have been waived) to require the Company to include any
securities of the Company owned or to be owned by such person
in the securities registered pursuant to the Registration
Statement.
(xiv) The Company is not an "investment company" within the meaning
of and subject to regulation under the Investment Company Act
of 1940, as amended.
(xv) The Company had all corporate power and authority to carry
out the merger of and American Axle & Manufacturing of
Michigan, Inc., a Michigan corporation ("AAMM") into the
Company (the "Merger"), and the Company and its stockholders
have taken all action required by law and the Company's
charter and bylaws or otherwise to approve the Merger; the
consummation of the Merger did not contravene any provision
of applicable law or the charter or bylaws of the Company or,
to such counsel's knowledge, any provision of any material
agreement or other material instrument binding upon the
Company or any order, writ, injunction or decree of any
jurisdiction, court or governmental body, and no consent,
approval, authorization or order of any court or governmental
agency or body was required for the consummation of the
Merger, except such as were obtained; the Merger became
effective on January 22, 1999, in accordance with the laws of
Delaware; and the Merger will not result in the recognition of
any material liability under the Internal Revenue Code of
1986, as amended, or otherwise for taxes for the Company or
any of its subsidiaries.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent public accountants
for the Company, representatives
A-1-4
of the Underwriters and counsel for the Underwriters, at which conferences the
contents of the Registration Statement and Prospectuses and related matters
were discussed and, although such counsel are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectuses except as
set forth in paragraphs (vii), (viii), (ix) and (x) above and have not made any
independent check or verification thereof, on the basis of the foregoing, (i) in
such counsel's opinion, the Registration Statement or any amendment thereto,
[including any Rule 462(b) Registration Statement,] the Rule 430A Information
and the Rule 434 Information (if applicable), as the time such Registration
Statement or any such amendment became effective, and the Prospectuses, as of
____________, 1999, complied as to form in all material respects with the
requirements of the 1933 Act and the applicable rules and regulations of the
Commission thereunder, except that such counsel need express no opinion with
respect to the financial statements or other financial data contained in the
Registration Statement or the Prospectuses and (ii) such counsel has no reason
to believe that either the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable), at
the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or the Prospectuses or any amendment or supplement
thereto, at the time the Prospectuses were issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that such counsel need express no opinion with respect to the
financial statements or other financial data contained in the Registration
Statement or the Prospectuses.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials which are furnished to the
Representatives. In addition, such counsel may state their opinion is limited
to matters governed by the laws of the State of New York, the corporate law of
State of Delaware and the federal law of the United States.
A-1-5
Exhibit A-2
FORM OF OPINION OF PATRICK S. LANCASTER, ESQ.,
GENERAL COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material
Adverse Effect.
(ii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, and each such
Subsidiary has corporate power and authority to conduct its
business as described in the Registration Statement and the
Prospectuses, and is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction where such qualification is required, whether by
reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or to be
in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital of each
Subsidiary has been duly authorized and validly issued, is
fully paid and non assessable and, to such counsel's
knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
(iii) To such counsel's knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in
the Registration Statement or the Prospectuses or filed as an
exhibit to the Registration Statement, except for such
defaults that would not result in a Material Adverse Effect.
(iv) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material
A-2-1
Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated
in the U.S. Purchase Agreement and the International Purchase
Agreement or the performance by the Company of its
obligations thereunder.
(v) To such counsel's knowledge, no filing, consent, approval,
authorization, registration or qualification of or with any
governmental agency or body or any court, is required for the
issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of the
U.S. Purchase Agreement and International Purchase Agreement,
except for the registration under the 1933 Act of the Shares,
and such consents, approvals, authorizations, registrations
or qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(vi) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column
entitled "Historical" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the
U.S. Purchase Agreement and the International Purchase
Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to
the exercise of convertible securities or options referred to
in the Prospectuses).
(vii) None of the outstanding shares of Common Stock of the Company
was issued in violation of the preemptive or other similar
rights of any securityholder of the Company; and the issuance
and sale of the Securities by the Company is not subject to
the preemptive or other similar rights of any securityholder
of the Company.
(viii) The issue and sale of the Securities by the Company, the
execution, delivery and performance by the Company of the
U.S. Purchase Agreement and the International Purchase
Agreement, the compliance by the Company with all of the
provisions thereof and the consummation of the transactions
contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement and in the Registration
Statement (including the use of the proceeds from the sale of
the Securities as described in the Prospectuses under the
caption "Use of Proceeds") do not and will not, whether with
or without the giving of notice or lapse of time or both,
conflict with, breach or result in a default or Repayment
Event (as defined in Section 1(x) of the U.S. Purchase
Agreement) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company or any subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note,
A-2-2
lease or any other agreement or instrument, known to such
counsel, to which the Company or any subsidiary is a party or
by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in a violation
of the charter or bylaws of the Company or any subsidiary, or
any applicable law, statute, rule, regulation, judgement,
order, writ or decree, known to such counsel, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or
operations.
(ix) To such counsel's knowledge, the Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by
them, and to such counsel's knowledge, neither the Company
nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render
any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(x) There are no statutes or regulations material to the Company
or its operations or, to such counsel's knowledge, pending or
threatened legal or governmental proceedings required to be
described in the Prospectuses which are not described as
required, or any contracts, instruments or other documents of
a character required to be described in the Registration
Statement or Prospectuses or to be filed as exhibits to the
Registration Statement which are not described and filed as
required; and all descriptions in the Registration Statement
of contracts and other agreements to which the Company or its
subsidiaries are a party are complete and accurate in all
material respects.
(xi) American Axle & Manufacturing of Michigan, Inc., a Michigan
corporation ("AAMM"), had all corporate power and authority
to carry out the merger of AAMM into the Company (the
"Merger"), and AAMM and its stockholders have taken all
action required by law and its charter and bylaws or
otherwise to approve the Merger; the consummation of the
Merger did not contravene any provision of applicable law or
the charter or bylaws of AAMM or any provision of any
material agreement or other material instrument binding upon
the Company or AAMM or any order, writ, injunction or
A-2-3
decree of any jurisdiction, court or governmental body, and
no consent, approval, authorization or order of any court or
governmental agency or body was required for the consummation
of the Merger, except such as were obtained; the Merger
became effective on January __, 1999, in accordance with the
laws of Michigan; and the Merger will not result in the
recognition of any material liability under the Internal
Revenue Code of 1986, as amended, or otherwise for taxes for
the Company or any of its subsidiaries.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel to
the Company, representatives of the independent public accountants for the
Company, representatives of the Underwriters and counsel for the Underwriters,
at which conferences the contents of the Registration Statement and
Prospectuses and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectuses except as set forth in paragraph (vi) above and
has not made any independent check or verification thereof, on the basis of the
foregoing, nothing has come to such counsel's attention that leads him to
believe that either the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
at the time such Registration Statement or any such amendment became effective
or at the Closing Time, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or the Prospectuses or any
amendment or supplement thereto, at the time the Prospectuses were issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express no
opinion with respect to the financial statements or other financial data
contained in the Registration Statement or the Prospectuses.
A-2-4
Exhibit B
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(i)
January __, 1999
MERRILL LYNCH INTERNATIONAL
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
as Lead Managers of the several International Managers to be named in the
within mentioned International Purchase Agreement c/o Merrill Lynch
International 20 Farringdon Road
London EC1M 3NH
England
Re: Proposed Public Offering by American Axle & Manufacturing
Holdings, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
American Axle & Manufacturing Holdings, Inc., a Delaware corporation (the
"Company"), understands that Merrill Lynch International ("Merrill Lynch") and
Credit Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette
International, Morgan Stanley & Co. International Limited and PaineWebber
International (U.K.) Ltd. propose to enter into a International Purchase
Agreement (the "International Purchase Agreement") with the Company providing
for the public offering of shares (the "Securities") of the Company's common
stock, par value $0.01 per share (the "Common Stock"). In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
[and an officer and/or director] of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
International Purchase Agreement that, during a period of 180 days from the
date of the International Purchase Agreement, the undersigned will not, without
the prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or cause the Company to file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or
B-1
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
------------------------------
Print Name:
----------------------------
B-2
Annex A
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included in the Registration Statement
and the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published
rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for
the three month periods ended March 31, 1997 and March 31, 1998
included in the Registration Statement and the Prospectus
(collectively, the "Quarterly Financials"), a reading of the latest
available unaudited interim consolidated financial statements of the
Company, a reading of the minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and the ____________
and ____________ Committees of the Board of Directors of the Company
and any subsidiary committees since January 1, 1998, inquiries of
certain officials of the Company and its subsidiaries responsible for
financial and accounting matters, a review of interim financial
information in accordance with standards established by the American
Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with
respect to the three-month periods ended March 31, 1997 and March 31,
1998 and such other inquiries and procedures as may be specified in
such letter, nothing came to our attention that caused us to believe
that:
(A) the Quarterly Financials included in the Registration Statement
and the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or any material modifications should be made to
the unaudited consolidated financial statements included in the
Registration Statement and the Prospectus for them to be in conformity
with generally accepted accounting principles;
(B) at [_________, 19___ and at] a specified date not more than five
days prior to the date of this Agreement, there was any change in the
___________ of the Company and its subsidiaries or any decrease in the
__________ of the Company and its subsidiaries or any increase in the
__________ of the Company and its subsidiaries, in
A-1
each case as compared with amounts shown in the latest balance sheet
included in the Registration Statement, except in each case for
changes, decreases or increases that the Registration Statement
discloses have occurred or may occur; or
(C) [for the period from _________, 19___ to _________, 19___ and ]
for the period from _________, 19___ to a specified date not more than
five days prior to the date of this Agreement, there was any decrease
in _________, __________ or ___________, in each case as compared with
the comparable period in the preceding year, except in each case for
any decreases that the Registration Statement discloses have occurred
or may occur;
(iii) based upon the procedures set forth in clause (ii) above and a reading
of the Selected Financial Data included in the Registration Statement
and a reading of the financial statements from which such data were
derived, nothing came to our attention that caused us to believe that
the Selected Financial Data included in the Registration Statement do
not comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act, that the
amounts included in the Selected Financial Data are not in agreement
with the corresponding amounts in the audited consolidated financial
statements for the respective periods or that the financial statements
not included in the Registration Statement from which certain of such
data were derived are not in conformity with generally accepted
accounting principles;
(iv) we have compared the information in the Registration Statement under
selected captions with the disclosure requirements of Regulation S-K
of the 1933 Act and on the basis of limited procedures specified
herein nothing came to our attention that caused us to believe that
this information does not comply as to form in all material respects
with the disclosure requirements of Items 302, 402 and 503(d),
respectively, of Regulation S-K;
(v) based upon the procedures set forth in clause (ii) above, a reading of
the unaudited financial statements of the Company for [the most recent
period] that have not been included in the Registration Statement and
a review of such financial statements in accordance with SAS 71,
nothing came to our attention that caused us to believe that the
unaudited amounts for _____________ for the [most recent period] do
not agree with the amounts set forth in the unaudited consolidated
financial statements for those periods or that such unaudited amounts
were not determined on a basis substantially consistent with that of
the corresponding amounts in the audited consolidated financial
statements;
A-2
(vi) we are unable to and do not express any opinion on the Pro Forma
Condensed Consolidated Financial Data (the "Pro Forma Statements)
included in the Registration Statement or on the pro forma adjustments
applied to the historical amounts included in the Pro Forma
Statements; however, for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with SAS 71] of
the financial statements to which the pro forma adjustments
were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the
basis for their determination of the pro forma adjustments
and whether the Pro Forma Statements comply as to form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statements; and on the basis of such procedures and such
other inquiries and procedures as specified herein, nothing
came to our attention that caused us to believe that the Pro
Forma Statements included in the Registration Statement do
not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those
statements; and
(vii) in addition to the procedures referred to in clause (ii) above, we
have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are
specified herein, and have compared certain of such items with, and
have found such items to be in agreement with, the accounting and
financial records of the Company.
A-3