<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 5, 1998
REGISTRATION NO. 333-58613
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
ADVANCED LIGHTING TECHNOLOGIES, INC. ADLT TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
</TABLE>
<TABLE>
<S> <C> <C> <C>
OHIO 34-1803229 DELAWARE APPLIED FOR
STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NUMBER) OF INCORPORATION OR IDENTIFICATION NUMBER)
ORGANIZATION) ORGANIZATION)
</TABLE>
32000 AURORA ROAD
SOLON, OHIO 44139
440/519-0500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WAYNE R. HELLMAN
CHIEF EXECUTIVE OFFICER
ADVANCED LIGHTING TECHNOLOGIES, INC.
32000 AURORA ROAD
SOLON, OHIO 44139
440/519-0500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
<TABLE>
<S> <C>
JAMES S. HOGG JONATHAN B. MILLER
COWDEN, HUMPHREY & SARLSON CO., LPA BROWN & WOOD LLP
1414 TERMINAL TOWER ONE WORLD TRADE CENTER
CLEVELAND, OHIO 44113 NEW YORK, NEW YORK 10048
216/241-2880 212/839-5300
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER UNIT PRICE(1)(2) REGISTRATION FEE(3)
<S> <C> <C> <C> <C>
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Debt Securities of Advanced Lighting
Technologies, Inc. (the
"Company")(5)........................
Common Stock, par value $.001 per
share, of the Company(6).............
Preferred Stock, par value $.001 per
share, of the Company(7)............. $300,000,000 (2) $300,000,000 $88,500(4)
Depositary Shares representing
Preferred Stock, of the Company(8)...
Warrants of the Company(9)...........
Preferred Securities of ADLT Trust I
(the "Trust")(10)....................
Guarantee of Preferred Securities of
the Trust(11)........................
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</TABLE>
(Footnotes on following page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
(Footnotes from previous page)
(1) In no event will the aggregate maximum initial offering price of all
securities issued pursuant to this Registration Statement exceed
$300,000,000. Any securities registered hereunder may be sold separately,
together or as units with other securities registered hereunder.
(2) The proposed maximum offering price per unit (a) has been omitted pursuant
to Instruction II.D of Form S-3 and (b) will be determined, from time to
time, by the applicable Registrant in connection with the issuance by such
Registrant of the securities registered hereunder.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
(4) Previously paid.
(5) Subject to footnote 1, there is being registered hereunder an indeterminate
principal amount of Debt Securities as may be sold, from time to time, by
the Company. Such amount shall be increased, if any Debt Securities are
issued at an original issue discount, by an amount such that the net
proceeds to be received by the Company shall be equal to the above amount
to be registered. Also, in addition to any Debt Securities that may be
issued directly under this Registration Statement, there is being
registered hereunder such indeterminate amount of Debt Securities as may be
issued upon conversion or exchange of other Debt Securities, Preferred
Stock or Depositary Shares of the Company, for which no consideration will
be received by the Company, and such aggregate principal amount of Debt
Securities as may be issued and sold to the Trust in connection with the
issuance by the Trust of Preferred Securities. Any Debt Securities sold to
the Trust as aforesaid may be distributed, under certain circumstances, to
the holders of Preferred Securities for no additional consideration.
(6) Subject to footnote 1, there is being registered hereunder an indeterminate
number of shares of Common Stock as may be sold, from time to time, by the
Company. There also is being registered hereunder an indeterminate number
of shares of Common Stock as may be issuable upon conversion of the Debt
Securities or the Preferred Stock or upon exercise of Warrants registered
hereby. The aggregate amount of Common Stock registered hereunder is
limited, solely for purposes of any at the market offerings, to that which
is permissible under Rule 415(a)(4) of the Securities Act of 1933, as
amended.
(7) Subject to footnote 1, there is being registered hereunder an indeterminate
number of shares of Preferred Stock as may be sold, from time to time, by
the Company. There also is being registered hereunder an indeterminate
number of shares of Preferred Stock as shall be issuable upon exercise of
Warrants registered hereby. In addition, there is being registered
hereunder such indeterminate amount of Debt Securities, for which no
consideration will be received by the Company, as may be issued upon
conversion or exchange of Preferred Stock.
(8) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts, representing a fractional interest of a share of
Preferred Stock. In addition, there is being registered hereunder such
indeterminate amount of Debt Securities, for which no consideration will be
received by the Company, as may be issued upon conversion or exchange of
Depositary Receipts.
(9) Subject to footnote 1, there is being registered hereunder an indeterminate
number of Warrants representing rights to purchase Debt Securities, shares
of Common Stock or Preferred Stock of the Company registered hereby.
(10) Subject to footnote 1, there is being registered hereunder an indeterminate
number of Preferred Securities as may be sold by the Trust.
(11) No separate consideration will be received for the Guarantee of the
Preferred Securities of the Trust.
<PAGE> 3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 5, 1998
PROSPECTUS
- -----------
ADVANCED LIGHTING TECHNOLOGIES, INC.
ADLT TRUST I
By this Prospectus, we may offer up to $300,000,000 of our:
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
PREFERRED SECURITIES OF ADLT TRUST I
Advanced Lighting Technologies, Inc. ("We," or the "Company") is an Ohio
corporation. ADLT Trust I is a statutory Delaware business trust (the "Trust").
The Company is the sponsor of the Trust (the "Sponsor").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY
STATE SECURITIES COMMISSION. NONE OF THOSE AUTHORITIES HAS DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
We will provide the specific terms of these securities in supplements to
this Prospectus. You should read this Prospectus and the supplements carefully
before you invest.
We may offer the securities directly or through underwriters, agents or
dealers. The supplement will describe the terms of that plan of distribution.
"Plan of Distribution" below also provides more information on this topic.
The date of this Prospectus is , 1998.
<PAGE> 4
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the securities covered
by this Prospectus. Those transactions include over-allotment, stabilizing
transactions, short covering transactions and penalty bids. For a description of
those activities, see "Plan of Distribution" in this Prospectus. If begun, they
may discontinue those activities at any time.
WHERE YOU CAN FIND MORE INFORMATION
Advanced Lighting Technologies, Inc. files annual, quarterly and current
reports, proxy and information statements and other information with the SEC.
You may read and copy any document we file at the SEC's public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for more information on the public reference rooms and
their copy charges. Our SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov. You may also inspect our SEC reports and
other information at the National Association of Securities Dealers, Inc.,
Reports Section, 1735 K Street N.W., Washington, D.C. 20006
The SEC allows us to "incorporate by reference" the information we file
with them, which means we can disclose information to you by referring you to
those documents. Information incorporated by reference is part of this
Prospectus. Later information filed with the SEC updates and supersedes this
Prospectus.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed, or subsequent
to the date of the initial Registration Statement and prior to effectiveness of
the Registration Statement:
- Annual Report on Form 10-K of the Company for the year ended June 30,
1997.
- Portions of the Proxy Statement on Schedule 14A for the Company's Annual
Meeting of Shareholders held on November 12, 1997 that have been
incorporated by reference into our 10-K.
- Quarterly Reports on Form 10-Q of the Company for the quarters ended
September 30 and December 31, 1997 and March 31, 1998.
- Current Reports on Form 8-K of the Company dated January 14, March 4, May
5 and July 7, 1998.
- The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed November 13, 1995, including any
amendments or reports filed for the purpose of updating such description.
You may request a copy of those filings, other than exhibits, at no cost,
by contacting us at:
Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
440/519-0500
Attention: Corporate Secretary
2
<PAGE> 5
THE COMPANY
Advanced Lighting Technologies, Inc. is an innovation-driven designer,
manufacturer and marketer of metal halide lighting products. Metal halide
lighting combines energy efficient superior illumination with long lamp (i.e.,
light bulb) life, excellent color rendition and compact lamp and system size. We
believe that we are the only designer and manufacturer in the world focused
primarily on metal halide lighting. As a result of this unique focus, we have
developed substantial expertise in all aspects of metal halide lighting. We
believe that this focus enhances our ability to respond to customer demand and
has contributed to our technologically advanced product development and
manufacturing capabilities.
We have integrated vertically to design, manufacture and market a broad
range of metal halide products, including: materials used in the production of
lamps; lamps and other components for lighting systems; and complete metal
halide lighting systems (i.e., the complete assemblies necessary to create light
when connected to electricity). We also manufacture and market equipment used to
produce metal halide lamps and optical coatings. Our materials and components
are used in the manufacture of our own lighting systems for sale to end-users
and are sold to third party manufacturers for use in the production of their
metal halide products. The vertical integration of our product approach is
illustrated below:
METAL HALIDE INTEGRATION FROM MATERIALS THROUGH SYSTEMS
- --------------- ----------------------
Internally
MATERIALS Developed
Metal Halide
LAMPS Systems
----------------------- ------------ ----------------
POWER SUPPLIES Emerging
CONTROLS Replacement Sales Commercial/ Applications
Industrial/
OPTICS/COATINGS Outdoor - Fiber Optics
Applications - Residental
EQUIPMENT - Projection TV
- ----------------- ------------------------ -------------- -----------------
Metal Halide Systems
Produced By
Third Parties
------------------------
We produce over 300 ultra pure metal halide salts and believe that we
produce 100% of the metal halide salts used in the manufacture of metal halide
lamps in the United States and over 80% of salts used worldwide. Metal halide
salts are the primary ingredient within the arc tube of metal halide lamps and
determine the lighting characteristics of the lamp. We currently market over 240
specialty and 40 standard-type metal halide lamps, giving us the most diverse
product line of any metal halide lamp manufacturer. In addition, we offer
components such as more than 400 power supply products for metal halide and
other discharge lamp systems. We also assemble and market complete metal halide
systems, which may be installed by an end user to produce light. We also design,
manufacture and market turnkey lamp production equipment groups, which we
typically sell to international manufacturers. We produce optical thin film
coatings for a variety of applications as well as measurement and test
instruments for applying thin film coatings.
METAL HALIDE
Invented approximately 35 years ago, metal halide is the newest of all
major lighting technologies and can produce the closest simulation to sunlight
of any available lighting technology. Metal halide lighting is currently used
primarily in commercial and industrial applications such as factories and
warehouses, outdoor site and landscape lighting, sports facilities and large
retail spaces such as superstores. In addition, due to metal halide's superior
lighting characteristics and efficiency, we believe many opportunities exist to
"metal halidize" applications currently dominated by older incandescent and
fluorescent lighting technologies. Metal halide lamps provide excellent color
rendition, long life (10,000 to 20,000 hours) and very high efficiency (70 to
110 lumens per watt) making them the best choice for many applications. For
example, a 100 watt metal halide lamp, which is approximately the same size as a
household incandescent lamp, produces as much light as five 100 watt
incandescent lamps and as much as three 34 watt, four foot long fluorescent
lamps. However, metal halide lamps cannot be used in the incandescent and
fluorescent lighting fixtures which are very common in existing facilities.
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While metal halide systems generally offer lower costs over the life of a
system, the installation of a metal halide lighting system typically involves
higher initial costs than incandescent and fluorescent lighting systems.
We believe that the majority of the growth of metal halide lighting has
occurred in commercial and industrial applications. Recently, metal halide
systems have been introduced in fiber optic, projection television and
automotive headlamp applications. We believe that additional opportunities for
metal halide lighting exist in other applications where energy efficiency and
light quality are important. As a result of our dominant position in metal
halide materials and lamp production equipment, we expect to benefit from
continued growth in metal halide markets. In addition, we expect to be a leader
in metal halide's continued market expansion by providing innovative metal
halide system components and integrated systems.
Our principal place of business is located at 32000 Aurora Road, Solon,
Ohio 44139 and our telephone number is 440/519-0500.
THE TRUST
We formed ADLT Trust I as a statutory business trust under Delaware law.
The Trust is governed by
- a trust agreement (as the same may be amended, supplemented or restated
from time to time, the "Declaration") executed by the Company, as sponsor
for the trust, and certain of the ADLT Trustees (as defined herein) for
the trust and
- a certificate of trust filed with the Delaware Secretary of State on June
1, 1998.
We formed the Trust so that it may engage exclusively in the following
activities:
- issuing the Trust Preferred Securities and common securities representing
undivided beneficial interests in the assets of the Trust (the "Trust
Common Securities" and, together with the Trust Preferred Securities, the
"Trust Securities");
- investing the gross proceeds of the Trust Securities in a specific series
of subordinated Debt Securities issued by us; and
- engaging in only those other activities necessary or incidental to these
purposes.
We will own all of the Trust Common Securities. The Trust Common Securities
will rank equally ("pari passu"), and payments will be made on Trust Common
Securities pro rata, with the Trust Preferred Securities, except that upon an
event of default under the Declaration, our rights as holder of the Trust Common
Securities to payment of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. Prior to making an offering of Trust Preferred Securities,
we will, directly or indirectly, acquire Trust Common Securities in an aggregate
liquidation amount equal to approximately 3% of the total capital of the Trust.
The Trust's business and affairs will be conducted by the trustees (the "ADLT
Trustees") who will be appointed by us. Except in certain limited circumstances,
we will be entitled to appoint, remove or replace any of the ADLT Trustees. We
will be able to change the number of ADLT Trustees. The Declaration sets out the
duties and obligations of the ADLT Trustees. A majority of the ADLT Trustees
(the "Regular Trustees") will be persons who we employ or who are our officers
or affiliates. One ADLT Trustee will be a financial institution which will be
unaffiliated with us and which shall act as property trustee and as indenture
trustee (the "Property Trustee") for purposes of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). In addition, unless the Property
Trustee maintains a principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law, one ADLT Trustee will have
its principal place of business or reside in the State of Delaware (the
"Delaware Trustee").
We will pay all fees and expenses related to the Trust and the offering of
Trust Securities. The payment of distributions with respect to the Trust
Preferred Securities from time to time out of money legally available to the
Trust, and payment on liquidation, redemption or otherwise with respect to the
Trust Preferred Securities, will be guaranteed by us to the extent described
herein. See "Description of Trust Preferred Securities -- Trust Preferred
Securities Guarantee." Our obligations under the Trust Preferred Securities
Guarantee will be subordinate and
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junior in right of payment to all of our other liabilities and will rank equally
("pari passu") in right of payment with the most senior preferred stock, if any,
that we may issue from time to time.
The principal place of business of the Trust will be c/o Advanced Lighting
Technologies, Inc., 32000 Aurora Road, Solon, Ohio 44139 (telephone
440/519-0500).
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED
MARCH 31, YEAR ENDED JUNE 30,
----------- --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1)................ -- 6.3x 5.1x 2.1x 1.7x 1.5x --
Ratio of earnings to fixed charges and preferred
stock dividends(1)................................. -- 6.3x 5.1x 2.1x 1.7x 1.5x --
</TABLE>
- ---------------
(1) For purposes of calculating the unaudited ratio of earnings to fixed charges
and preferred stock dividends, earnings consist of income (loss) from
continuing operations before income taxes and fixed charges. Fixed charges
consist of interest charges and amortization of debt issuance costs, whether
expensed or capitalized, and that portion of rental expense that is
representative of interest. For the nine months ended March 31, 1998,
earnings were inadequate to cover fixed charge requirements by $21,894,000.
For fiscal 1993, earnings were inadequate to cover fixed charge requirements
by $6,346,000.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus and any supplements, including information incorporated by
reference, discuss future expectations, contain projections of our future
operating results or financial condition or state other forward-looking
information relating to, among other things, (i) our potential acquisitions or
joint ventures; (ii) our financing plans; (iii) trends affecting our financial
condition or operating results; (iv) continued growth of the metal halide
lighting market; (v) our operating and growth strategies; and (vi) lawsuits and
claims that may affect us. Known and unknown risks, uncertainties and other
factors could cause the actual results to differ materially from those
contemplated by those statements. The forward-looking information is based on
various factors and was derived using numerous assumptions.
Important factors that may cause actual results to differ include among
other things the results of our efforts to implement our business strategy, the
effect of general economic conditions, actions of our competitors and our
ability to respond to those actions, the cost of our capital, which may depend
in part on our portfolio quality, debt ratings, prospects and outlook, changes
in governmental regulation, tax rates and similar matters, the results of
lawsuits, the ability to attract and retain quality employees and other risks
detailed in our other filings with the SEC. We do not promise to update
forward-looking information to reflect actual results or changes in assumptions
or other factors that could affect those statements.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities for
general corporate purposes. Those purposes include the repayment or refinancing
of debt, acquisitions in the ordinary course of business, working capital,
investment in operations and capital expenditures. We will describe in the
supplement any proposed use of proceeds other than for general corporate
purposes.
DESCRIPTION OF DEBT SECURITIES
The Company may issue Debt Securities either separately, or together with,
or upon the conversion of or in exchange for, other Securities. The Debt
Securities are to be either senior unsecured obligations (the "Senior Debt
Securities") or subordinated unsecured obligations of the Company (the
"Subordinated Debt Securities")
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<PAGE> 8
issued in one or more series under an Indenture (as supplemented from time to
time, the "Indenture") to be entered into between the Company and one or more
U.S. banking institutions (each, a "Trustee") whose name will be set forth in
the applicable Prospectus Supplement. The Indenture may, but need not, have
separate Trustees for Senior and Subordinated Debt Securities. The form of the
Indenture has been filed as an exhibit to the Registration Statement. The terms
of any series of Debt Securities will be those set forth in the Indenture and
such Debt Securities and those made part of the Indenture by the Trust Indenture
Act. The summary of certain provisions of the Indenture and the Debt Securities
set forth below and the summary of certain terms of a particular series of Debt
Securities set forth in the applicable Prospectus Supplement do not purport to
be complete and are subject to and are qualified in their entirety by reference
to all of the provisions of the Indenture, which provisions of the Indenture
(including defined terms) are incorporated herein by reference. Certain
capitalized terms used herein and not defined are defined in the Indenture. As
used in this "Description of Debt Securities," all references to the "Company"
shall mean Advanced Lighting Technologies, Inc., excluding, unless the context
shall otherwise require, its subsidiaries.
In the event that Subordinated Debt Securities are issued to the Trust or a
trustee of the Trust in connection with the issuance of Trust Securities, such
Subordinated Debt Securities will be issued pursuant to the Indenture and
subsequently may be distributed pro rata to the holders of such Trust Securities
in connection with the dissolution of the Trust upon the occurrence of certain
events described in the Prospectus Supplement relating to such Trust Securities
or upon a redemption of Trust Securities. Only one series of Subordinated Debt
Securities will be issued to the Trust or a trustee of the Trust in connection
with the issuance of Trust Securities by the Trust.
The following description of Debt Securities sets forth certain general
terms and provisions of the series of Debt Securities to which any Prospectus
Supplement may relate. Certain other specific terms of any particular series of
Debt Securities will be described in the applicable Prospectus Supplement. To
the extent that any particular terms of the Debt Securities described in a
Prospectus Supplement differ from any of the terms described herein, then such
terms described herein shall be deemed to have been superseded by such
Prospectus Supplement.
In addition, this Prospectus relates to up to $50,000,000 aggregate
principal amount of the Company's 8% Senior Notes Due 2008 (the "8% Notes")
which may be issued by the Company and is in addition to $100,000,000 aggregate
principal amount of 8% Notes outstanding as of the date hereof. The 8% Notes are
issuable under an indenture dated as of March 18, 1998 between the Company and
The Bank of New York. See "8% Senior Notes Due 2008" below.
GENERAL TERMS OF THE DEBT SECURITIES WHICH WILL BE DESCRIBED IN THE APPLICABLE
PROSPECTUS SUPPLEMENT
The Debt Securities may be issued from time to time in one or more series
of Senior Debt Securities and/or one or more series of Subordinated Debt
Securities. The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities of
any series may be issued thereunder up to an aggregate principal amount which
may be authorized from time to time by the Company. Reference is made to the
applicable Prospectus Supplement relating to the series of Debt Securities
offered thereby for specific terms, including (where applicable):
(1) the title or designation of such Debt Securities;
(2) any limit on the aggregate principal amount of such Debt Securities;
(3) the price or prices (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued;
(4) the date or dates on which the principal of and premium, if any, on
such Debt Securities will be payable, or the method or methods, if
any, by which such date or dates will be determined;
(5) the rate or rates at which such Debt Securities will bear interest, if
any, or the method or methods, if any, by which such rate or rates are
to be determined, the date or dates, if any, from which such interest
will accrue, or the method or methods, if any, by which such date or
dates are to be determined, and whether and under what circumstances
Additional Amounts on such Debt Securities will be payable,
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and the basis upon which interest will be calculated if other than
that of a 360-day year of twelve 30-day months;
(6) the dates on which such interest, if any, will be payable and the
record dates, if any, therefor;
(7) the place or places where the principal of, premium, if any, and
interest, if any, or any Additional Amounts on such Debt Securities
will be payable and the place or places where such Debt Securities may
be surrendered for registration of transfer and exchange, if in
addition to or other than The City of New York;
(8) if applicable, the date or dates on which, the period or periods
within which, the price or prices at which and the other terms and
conditions upon which such Debt Securities may be redeemed at the
option of the Company or are subject to repurchase at the option of
the holders;
(9) the terms of any sinking fund or analogous provision;
(10) any addition to, or modification or deletion of, any covenant or Event
of Default with respect to such Debt Securities;
(11) whether any such Debt Securities are to be issuable in registered or
bearer form or both and, if in bearer form, the terms and conditions
relating thereto and any limitations on issuance of such Bearer
Securities (including in exchange for Registered Securities of the
same series);
(12) whether any such Debt Securities will be issued in temporary or
permanent global form and, if so, the identity of the depositary for
such global Debt Security;
(13) whether and under what circumstances the Company will pay Additional
Amounts (as contemplated by the Indenture) on such Debt Securities to
any holder who is a United States Alien (as defined in the Indenture,
as such definition may be modified) in respect of any tax, assessment
or other governmental charge and, if so, whether the Company will have
the option to redeem such Debt Securities rather than pay such
Additional Amounts;
(14) the person to whom any interest on any Registered Securities of the
series shall be payable, if other than the person in whose name the
Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest, the manner in which, or the person to whom, any
interest on any Bearer Security of the series shall be payable, if
other than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the
manner in which, any interest payable on a temporary global Debt
Security will be paid if other than in the manner provided in the
Indenture;
(15) the portion of the principal amount of such Debt Securities which
shall be payable upon acceleration thereof if other than the full
principal amount thereof;
(16) the authorized denominations in which such Debt Securities will be
issuable, if other than denominations of $1,000 and any integral
multiple thereof (in the case of Registered Securities) or $5,000 (in
the case of Bearer Securities);
(17) the terms, if any, upon which such Debt Securities may be convertible
into or exchangeable for other Securities;
(18) whether such Debt Securities will be Senior Debt Securities or
Subordinated Debt Securities, and the terms of subordination, if
applicable;
(19) whether the amount of payments of principal of, and premium, if any,
and interest, if any, on, such Debt Securities may be determined with
reference to an index, formula or other method or methods (any such
Debt Securities being hereinafter called "Indexed Securities") and the
manner in which such amounts will be determined; and
(20) any other terms of such Debt Securities.
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As used in this Prospectus and any Prospectus Supplement relating to the
offering of any Debt Securities, references to the principal of and premium, if
any, and interest, if any, on such Debt Securities will be deemed to include
mention of the payment of Additional Amounts, if any, required by the terms of
such Debt Securities in such context.
Debt Securities may be issued as Original Issue Discount Securities (as
defined in the Indenture) to be sold at a substantial discount below their
principal amount. In the event of an acceleration of the maturity of any
Original Issue Discount Security, the amount payable to the holder thereof upon
such acceleration will be determined in the manner described in the applicable
Prospectus Supplement. Material federal income tax and other considerations
applicable to Original Issue Discount Securities will be described in the
applicable Prospectus Supplement.
Under the Indenture, the terms of the Debt Securities of any series may
differ and the Company, without the consent of the holders of the Debt
Securities of any series, may reopen a previous series of Debt Securities and
issue additional Debt Securities of such series or establish additional terms of
such series.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indenture, however, provides that the Company may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Bearer
Securities shall not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "United States person"
means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States,
any estate the income of which is subject to United States federal income
taxation regardless of its source, or any trust whose administration is subject
to the primary supervision of a United States court and which has one or more
United States fiduciaries who have the authority to control all substantial
decisions of the trust, and "United States" means, except as may be set forth in
the Prospectus Supplement, the United States of America (including the states
thereof and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction. Purchasers of Bearer Securities will be
subject to certification procedures and may be affected by certain limitations
under United States tax laws. Such procedures and limitations will be described
in the Prospectus Supplement relating to the offering of the Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement,
Registered Securities will be issued in denominations of $1,000 or any integral
multiple thereof, and Bearer Securities will be issued in denominations of
$5,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the
principal, premium, if any, and interest, if any, of or on the Debt Securities
will be payable, and Debt Securities may be surrendered for registration of
transfer or exchange, at an office or agency to be maintained by the Company in
the Borough of Manhattan, The City of New York, provided that payments of
interest with respect to any Registered Security may be made at the option of
the Company by check mailed to the address of the person entitled thereto or by
transfer to an account maintained by the payee with a bank located in the United
States. No service charge shall be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge and any other expenses
that may be imposed in connection therewith.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Bearer Securities
will be made, subject to any applicable laws and regulations, at such office or
agency outside the United States as specified in the Prospectus Supplement and
as the Company may designate from time to time. Unless otherwise indicated in
the applicable Prospectus Supplement, payment of interest due on Bearer
Securities on any Interest Payment Date will be made only against surrender of
the coupon relating to such Interest Payment Date.
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Unless otherwise indicated in the applicable Prospectus Supplement, no
payment of principal, premium or interest with respect to any Bearer Security
will be made at any office or agency in the United States or by check mailed to
any address in the United States or by transfer to an account maintained with a
bank located in the United States; provided, however, that if amounts owing with
respect to any Bearer Securities shall be payable in U.S. dollars, payment with
respect to any such Bearer Securities may be made at the Corporate Trust Office
of the Trustee or at any office or agency designated by the Company in the
Borough of Manhattan, The City of New York, if (but only if) payment of the full
amount of such principal, premium or interest at all offices outside of the
United States maintained for such purpose by the Company is illegal or
effectively precluded by exchange controls or similar restrictions.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company will not be required to (i) issue, register the transfer of or exchange
Debt Securities of any series during a period beginning at the opening of
business 15 days before any selection of Debt Securities of that series of like
tenor to be redeemed and ending at the close of business on the day of that
selection; (ii) register the transfer of or exchange any Registered Security, or
portion thereof, called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; (iii) exchange any Bearer Security
called for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor that is simultaneously surrendered for
redemption; or (iv) issue, register the transfer of or exchange any Debt
Security which has been surrendered for repayment at the option of the holder,
except the portion, if any, of such Debt Security not to be so repaid.
RANKING OF DEBT SECURITIES AND HOLDING COMPANY STRUCTURE
The Senior Debt Securities will be unsecured unsubordinated obligations of
the Company and will rank on a parity in right of payment with all other
unsecured and unsubordinated indebtedness of the Company, including the 8%
Notes. At March 31, 1998, the Company had approximately $119.8 million of total
indebtedness outstanding.
Although the Senior Debt Securities and the 8% Notes will rank equally
("pari passu") in right of payment with indebtedness outstanding under the
Company's $85.0 million revolving credit facility entered into on January 2,
1998 (as amended, the "Credit Facility"), such indebtedness is secured by
substantially all of the personal property of the Company and each of its North
American subsidiaries and a pledge of stock of each of the Company's principal
subsidiaries. The Senior Debt Securities and the 8% Notes are unsecured and
therefore do not have the benefit of such collateral. If an event of default
occurs under the Credit Facility, the banks party thereto will have preferential
claims to those assets and may foreclose upon such collateral to the exclusion
of the holders of the Senior Debt Securities and the 8% Notes, notwithstanding
the existence of an event of default with respect to the Senior Debt Securities
and the 8% Notes, respectively. Accordingly, in such an event, the Company's
assets would first be used to repay in full amounts outstanding under the Credit
Facility, resulting in virtually all of the Company's assets being unavailable
to satisfy the claims of holders of the Senior Debt Securities and the 8% Notes
until the indebtedness under the Credit Facility is repaid in full. Any
remaining unpaid claims of creditors under the Credit Facility will rank equally
("pari passu") with the Senior Debt Securities and the 8% Notes and will be
entitled to share in any of the Company's remaining assets.
The Company conducts substantially all of its operations through
subsidiaries and substantially all of its assets consist of the capital stock of
its subsidiaries. Accordingly, the Senior Debt Securities and the 8% Notes will
be effectively subordinated to liabilities of the Company's subsidiaries,
including trade payables. At March 31, 1998, the total liabilities of the
Company's subsidiaries, excluding intercompany debt but including trade
payables, were approximately $40.8 million. At March 31, 1998, the Company and
its subsidiaries would also have had $77.7 million available (subject to
financial ratio compliance and other limitations) to be drawn under the Credit
Facility, which is secured as described above.
The Company's rights and the rights of its creditors, including holders of
the Senior Debt Securities and the 8% Notes, to participate in the assets of any
subsidiary upon such subsidiary's liquidation or recapitalization will be
subject, in the case of any subsidiary, to the prior claims of such subsidiary's
creditors, except to the extent that the Company itself may be a creditor with
recognized claims against the subsidiary, in which case the claims of the
Company would still be effectively subordinated to any mortgage or other liens
on the assets of such
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subsidiary and would be subordinate to any indebtedness of such subsidiary
senior to that held by the Company. Accordingly, there can be no assurance that,
after providing for all prior claims and all equal ("pari passu") claims, there
would be sufficient assets available to satisfy the obligations of the Company
under the Senior Debt Securities and the 8% Notes.
Because the Company conducts substantially all of its operations through
its subsidiaries, the Company is and will be dependent upon the distribution of
the earnings of its subsidiaries to service its debt obligations, including the
Senior Debt Securities and the 8% Notes. The Company's subsidiaries are separate
and distinct legal entities and have no obligation, contingent or otherwise, to
pay any amounts due on the Senior Debt Securities and the 8% Notes or to make
any funds available therefor.
The Subordinated Debt Securities will be unsecured obligations of the
Company and will be subordinated in right of payment to all existing and future
Senior Indebtedness (as defined in the applicable Prospectus Supplement) of the
Company. See "--Subordination of Subordinated Debt Securities" immediately
following this paragraph.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The applicable Prospectus Supplement will set forth the extent to which
Subordinated Debt Securities of or within a particular series are subordinated
to other indebtedness.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Debt Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for individual certificates evidencing
Debt Securities in definitive form represented thereby, a global Debt Security
may not be transferred except as a whole by the Depositary for such global Debt
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series
of global Debt Securities and certain limitations and restrictions relating to a
series of global Bearer Securities will be described in the Prospectus
Supplement relating to such series.
OUTSTANDING DEBT SECURITIES
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, (i) the portion of the
principal amount of an Original Issue Discount Security that shall be deemed to
be outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon a declaration of
acceleration thereof pursuant to the terms of such Original Issue Discount
Security as of the date of such determination, (ii) the principal amount of any
Indexed Security that shall be deemed to be outstanding for such purpose shall
be the principal face amount of such Indexed Security determined on the date of
its original issuance and (iii) any Debt Security owned by the Company or any
obligor on such Debt Security or any Affiliate of the Company or such other
obligor shall be deemed not to be outstanding.
REDEMPTION AND REPURCHASE
The Debt Securities of any series may be redeemable at the option of the
Company, may be subject to mandatory redemption pursuant to a sinking fund or
otherwise, or may be subject to repurchase by the Company at the option of the
holders, in each case upon the terms, at the times and at the prices set forth
in the applicable Prospectus Supplement.
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CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series are convertible
into or exchangeable for Common Stock, Preferred Stock, Depositary Shares or
other Debt Securities will be set forth in the applicable Prospectus Supplement.
Such terms may include provisions for conversion or exchange, either mandatory,
at the option of the holders or at the option of the Company.
COVENANTS OF THE COMPANY
Reference is made to the applicable Prospectus Supplement for information
with respect to covenants specific to a particular series of Debt Securities. If
any such covenants are described, the Prospectus Supplement will also state
whether the "covenant defeasance" provisions described below also apply.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, an
Event of Default with respect to the Debt Securities of any series is defined in
the Indenture as being: (i) default for 30 days in payment of any interest with
respect to any Debt Security of such series; (ii) default in payment of
principal or any premium with respect to any Debt Security of such series when
due upon maturity, redemption or otherwise; (iii) default in making any sinking
fund payment or payment under any analogous provision when due with respect to
any Debt Security of such series; (iv) default by the Company in the
performance, or breach, of any other covenant or warranty in the Indenture
(other than a covenant or warranty included therein solely for the benefit of
one or more series of Debt Securities other than that series) or any Debt
Security of such series which shall not have been remedied for a period of 90
days after notice to the Company by the Trustee or the holders of not less than
25% in aggregate principal amount of the Debt Securities of such series then
outstanding; (v) acceleration of the maturity of any single outstanding issue of
Indebtedness of the Company with an outstanding aggregate principal amount in
excess of $10,000,000 (including an acceleration under the Indenture with
respect to Debt Securities of any other series), as a result of an event of
default thereunder, which acceleration is not annulled or which Indebtedness is
not discharged within 30 days thereafter; (vi) the Company shall fail within 30
days to pay, bond or otherwise discharge any uninsured judgement or court order
for the payment of money in excess of $10,000,000, which is not stayed on appeal
or is not otherwise being appropriately contested in good faith; (vii) certain
events of bankruptcy, insolvency or reorganization of the Company; or (viii) any
other Event of Default established for the Debt Securities of such series. No
Event of Default with respect to any particular series of Debt Securities
necessarily constitutes an Event of Default with respect to any other series of
Debt Securities. The Indenture provides that the Trustee thereunder may withhold
notice to the holders of the Debt Securities of any series of the occurrence of
a default with respect to the Debt Securities of such series (except a default
in payment of principal, premium, if any, interest, if any, or sinking fund
payments, if any) if the Trustee considers it in the interest of the holders to
do so.
The Indenture provides that if an Event of Default with respect to any
series of Debt Securities issued thereunder shall have occurred and be
continuing, either the Trustee or the holders of at least 25% in principal
amount of the Debt Securities of such series then outstanding may declare the
principal amount (or if any Debt Securities of such series are Original Issue
Discount Securities, such lesser amount as may be specified in the terms
thereof) of all the Debt Securities of such series to be due and payable
immediately, but upon certain conditions such declaration and its consequences
may be rescinded and annulled by the holders of a majority in principal amount
of the Debt Securities of such series then outstanding.
Subject to the provisions of the Trust Indenture Act requiring the Trustee,
during an Event of Default under the Indenture, to act with the requisite
standard of care, a Trustee is under no obligation to exercise any of its rights
or powers under the Indenture at the request or direction of any of the holders
of Debt Securities of any series unless such holders have offered the Trustee
reasonable indemnity. Subject to the foregoing, holders of a majority in
principal amount of the then outstanding Debt Securities of any series issued
under the Indenture shall have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee under the Indenture with respect to such series. The
Indenture requires the
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annual filing by the Company with the Trustee of a certificate as to whether or
not the Company is in default under the terms of the Indenture.
Notwithstanding any other provision of the Indenture, the holder of any
Debt Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and interest, if any,
on such Debt Security on the respective due dates therefor (as the same may be
extended in accordance with the terms of such Debt Security) and to institute
suit for enforcement of any such payment, and such right shall not be impaired
without the consent of such holder. In addition, in the case of a Subordinated
Debt Security issued to the Trust or a Trustee of the Trust, if an Event of
Default has occurred and is continuing and such Event of Default is attributable
to the failure by the Company to pay the principal of or premium, if any, or
interest, if any, on such Subordinated Debt Security, then a holder of Trust
Preferred Securities may directly institute a proceeding against the Company for
payment.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Upon the direction of the Company, the Indenture shall cease to be of
further effect with respect to any series of Debt Securities issued thereunder
specified by the Company (subject to the survival of certain provisions thereof,
including the obligation to pay Additional Amounts to the extent described
below) when (i) either (A) all outstanding Debt Securities of such series and,
in the case of Bearer Securities, all coupons appertaining thereto, have been
delivered to the Trustee for cancelation (subject to certain exceptions) or (B)
all Debt Securities of such series and, if applicable, any coupons appertaining
thereto, have become due and payable or will become due and payable at their
stated maturity within one year or are to be called for redemption within one
year and the Company has deposited with the Trustee, in trust, funds in U.S.
dollars in an amount sufficient to pay the entire indebtedness on such Debt
Securities in respect of principal (and premium, if any) and interest to the
date of such deposit (if such Debt Securities have become due and payable) or to
the Maturity thereof, as the case may be, (ii) the Company has paid all other
sums payable under the Indenture with respect to the Debt Securities of such
series, and (iii) certain other conditions are met. If the Debt Securities of
any such series provide for the payment of Additional Amounts, the Company will
remain obligated, following such deposit, to pay Additional Amounts on such Debt
Securities to the extent that the amount thereof exceeds the amount deposited in
respect of such Additional Amounts as aforesaid.
If provided in the applicable Prospectus Supplement, the Company may elect
with respect to any series of Debt Securities either to defease and be
discharged from (a) any and all obligations with respect to such Debt Securities
(except for, among other things, the obligation to pay Additional Amounts, if
any, upon the occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as provided below, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities, to hold moneys for payment in trust, and, if
applicable, to exchange or convert such Debt Securities into other securities in
accordance with their terms) ("defeasance"), or (b) certain restrictive
covenants, if any, in the Indenture and, if indicated in the applicable
Prospectus Supplement, its obligations with respect to any other covenant
applicable to the Debt Securities of such series, and any omission to comply
with such obligations shall not constitute a default or an Event of Default with
respect to the Debt Securities of such series ("covenant defeasance"), in either
case upon the irrevocable deposit with the Trustee (or other qualifying
trustee), in trust for such purpose, of an amount, in U.S. dollars at Stated
Maturity, and/or Government Obligations (as defined in the Indenture) which
through the payment of principal and interest in accordance with their terms
will provide money, in an amount sufficient to pay the principal of and any
premium and any interest on (and, to the extent that (x) the Debt Securities of
such series provide for the payment of Additional Amounts and (y) the amount of
any such Additional Amounts is at the time of deposit reasonably determinable by
the Company (in the exercise of its sole discretion), any such Additional
Amounts with respect to) such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor or the
applicable redemption date, as the case may be.
Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the Indenture or any other
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material agreement or instrument to which the Company is a party or by which it
is bound, (ii) no Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Debt Securities to
be defeased shall have occurred and be continuing on the date of establishment
of such a trust and, with respect to defeasance only, at any time during the
period ending on the 123rd day after such date and (iii) the Company has
delivered to the Trustee an Opinion of Counsel (as specified in the Indenture)
to the effect that the holders of such Debt Securities will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to U.S. federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and such
Opinion of Counsel, in the case of defeasance, must refer to and be based upon a
letter ruling of the Internal Revenue Service received by the Issuer, a Revenue
Ruling published by the Internal Revenue Service or a change in applicable U.S.
federal income tax law occurring after the date of the Indenture.
In the event the Company effects covenant defeasance with respect to any
Debt Securities, and such Debt Securities are declared due and payable because
of the occurrence of any Event of Default or with respect to any other covenant
as to which there has been covenant defeasance, the amount of monies and/or
Government Obligations deposited with the Trustee to effect such covenant
defeasance may not be sufficient to pay amounts due on such Debt Securities at
the time of any acceleration resulting from such Event of Default. However, the
Company would remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting or restricting such defeasance or covenant defeasance with
respect to the Debt Securities of a particular series.
MODIFICATION, WAIVERS AND MEETINGS
The Indenture contains provisions permitting the Company and the Trustee
thereunder, with the consent of the holders of a majority in principal amount of
the outstanding Debt Securities of each series issued under the Indenture and
affected by a modification or amendment, to modify or amend any of the
provisions of the Indenture or of the Debt Securities of such series or the
rights of the holders of the Debt Securities of such series under the Indenture,
provided that no such modification or amendment shall, among other things, (i)
change the stated maturity of the principal of, or premium, if any, or any
installment of interest, if any, on any Debt Securities issued under the
Indenture or reduce the principal amount thereof or any redemption premium
thereon, or reduce the rate of interest thereon, or reduce the amount of
principal of any Original Issue Discount Securities that would be due and
payable upon an acceleration of the maturity thereof, or adversely affect any
right of repayment at the option of any holder, or change any place where, or
the Currency in which, any Debt Securities issued under the Indenture are
payable, or impair the holder's right to institute suit to enforce the payment
of any such Debt Securities on or after the stated maturity thereof, or make any
change that materially adversely affects the right, if any, to convert or
exchange such Debt Securities for other securities in accordance with their
terms, or (ii) reduce the aforesaid percentage of Debt Securities of any series
issued under the Indenture, the consent of the holders of which is required for
any such modification or amendment or the consent of whose holders is required
for any waiver (of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequences) or reduce the requirements
for a quorum or voting at a meeting of holders of such Debt Securities or (iii)
solely in the case of any Subordinated Debt Securities, modify any of the
provisions relating to subordination of such Subordinated Debt Securities or the
definition of Senior Indebtedness in a manner adverse to the holders of the
Subordinated Debt Securities, without in each such case obtaining the consent of
the holder of each outstanding Debt Security issued under the Indenture so
affected.
If the Trust or the Property Trustee holds a series of Subordinated Debt
Securities, no such amendment, modification or waiver which requires approval of
holders of a certain percentage in principal amount of the outstanding
Subordinated Debt Securities of such series shall be effective as to such series
of Subordinated Debt Securities, without the approval of the holders of at least
the same percentage of aggregate liquidation amount of outstanding Trust
Securities.
The Indenture also contains provisions permitting the Company and the
Trustee, without the consent of the holders of any Debt Securities issued
thereunder, to modify or amend the Indenture in order, among other things, (a)
to add to the Events of Default or the covenants of the Company for the benefit
of the holders of all or
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any series of Debt Securities issued under the Indenture; (b) to add or change
any provisions of the Indenture to facilitate the issuance of Bearer Securities;
(c) to establish the form or terms of Debt Securities of any series and any
related coupons; (d) to cure any ambiguity or correct or supplement any
provision therein which may be inconsistent with other provisions therein, or to
make any other provisions with respect to matters or questions arising under the
Indenture which shall not materially and adversely affect the interests of the
holders of any series of Debt Securities issued thereunder in any material
respect; (e) to amend or supplement any provision contained in the Indenture,
provided that such amendment or supplement does not apply to any outstanding
Debt Securities issued prior to the date of such amendment or supplement and
entitled to the benefits of such provision; or (f) to amend or supplement any
provision therein or in any supplemental indenture, provided that no such
amendment or supplement shall materially and adversely affect the interests of
the holders of any Debt Securities then outstanding.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may waive compliance by the Company with certain
restrictive provisions of the Indenture to the extent described in the
Prospectus Supplement. The holders of a majority in aggregate principal amount
of the outstanding Debt Securities of any series may, on behalf of all holders
of Debt Securities of that series, waive any past default under the Indenture
with respect to Debt Securities of that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest, if
any, on, any Debt Securities of such series or in respect of a covenant or
provision which cannot be modified or amended without the consent of each holder
of the outstanding Debt Securities of such series so affected.
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series issued thereunder. A meeting may be called at any
time by the Trustee, and also, upon request, by the Company or the holders of at
least 10% in principal amount of the outstanding Debt Securities of such series,
in any such case upon notice given in accordance with the provisions of the
Indenture. Except for any consent which must be given by the holder of each
outstanding Debt Security affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting duly reconvened at which a quorum
(as described below) is present may be adopted by the affirmative vote of the
holders of a majority in principal amount of the outstanding Debt Securities of
that series; provided, however, that any resolution with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action which
may be made, given or taken by the holders of a specified percentage, which is
less than a majority, in principal amount of the outstanding Debt Securities of
a series may be adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the holders of such
specified percentage in principal amount of the outstanding Debt Securities of
that series. Any resolution passed or decision taken at any meeting of holders
of Debt Securities of any series duly held in accordance with the Indenture will
be binding on all holders of Debt Securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding Debt Securities of a series, subject to
certain exceptions.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
The Trust Indenture Act contains limitations on the rights of a trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company and its subsidiaries from time to time,
provided that if the Trustee acquires any conflicting interest it must eliminate
such conflict upon the occurrence of an Event of Default under the Indenture, or
else resign.
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8% SENIOR NOTES DUE 2008
The Company may issue up to an additional $50,000,000 aggregate principal
amount of its 8% Senior Notes Due 2008 at the date hereof. The additional 8%
Notes are issuable under an indenture dated as of March 18, 1998 (the "8% Notes
Indenture") between the Company and The Bank of New York. The 8% Notes Indenture
has been incorporated by reference as an exhibit to the Registration Statement.
The additional 8% Notes, if issued, will be unsecured senior indebtedness
and will rank equally ("pari passu") with existing and future unsubordinated
unsecured indebtedness, including the Senior Debt Securities and outstanding 8%
Notes, and senior in right of payment to all subordinated indebtedness of the
Company. The 8% Notes will be effectively subordinated to all secured
indebtedness of the Company and its subsidiaries with respect to the collateral
securing such indebtedness, and the 8% Notes will be effectively subordinated to
all liabilities of the Company's subsidiaries, including trade payables. See
"Ranking of Debt Securities and Holding Company Structure" above.
The 8% Notes Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries (as defined in
the 8% Notes Indenture) to incur indebtedness, pay dividends, prepay
subordinated indebtedness, repurchase capital stock, make investments, create
liens, engage in transactions with stockholders and affiliates, sell assets and,
with respect to the Company, engage in mergers and consolidations. However,
these limitations are subject to a number of important qualifications and
exceptions as set forth in the 8% Notes Indenture.
A complete description of the material terms of the 8% Notes will be set
forth in the applicable Prospectus Supplement, if any, relating to an offering
of the 8% Notes.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK AND AMOUNT OUTSTANDING
The Company's authorized capital stock consists of 80.0 million shares of
Common Stock having a par value of $.001 per share and 1.0 million shares of
Preferred Stock having a par value of $.001 per share. As of May 6, 1998,
20,121,153 shares of Common Stock and no shares of Preferred Stock were issued
and outstanding.
COMMON STOCK
Reference is made to the applicable Prospectus Supplement relating to
Common Stock offered thereby for the terms relevant thereto, including the
number of shares offered and the initial public offering price.
Each holder of Common Stock is entitled to one vote for each share held.
Shareholders do not have the right to cumulate their votes in elections of
directors. Accordingly, holders of a majority of the issued and outstanding
Common Stock will have the right to elect the Company's directors and otherwise
control the affairs of the Company.
Holders of Common Stock are entitled to dividends on a pro rata basis upon
declaration of dividends by the Board of Directors. Dividends are payable only
out of unreserved and unrestricted surplus that is legally available for the
payment of dividends. The Board of Directors is not required to declare
dividends, and it currently expects to retain any funds generated from
operations to finance the development of the Company's business. The payment of
dividends in the future will depend upon earnings, capital needs, and other
factors.
Upon a liquidation of the Company, holders of Common Stock will be entitled
to a pro rata distribution of the assets of the Company, after payment of all
amounts owed to the Company's creditors, and subject to any preferential amount
payable to holders of Preferred Stock of the Company, if any.
PREFERRED STOCK
The Company's Articles of Incorporation permit the Company's Board of
Directors to issue shares of Preferred Stock in one or more series, and to fix
the relative rights, preferences, and limitations of each series.
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Among such rights, preferences, and limitations are dividend rights and rates,
provisions for redemption, rights upon liquidation, conversion privileges, and
certain voting powers.
The purpose for authorizing the Board of Directors to issue and to
designate the features of Preferred Stock is, in part, to eliminate delays
associated with a shareholder vote to authorize the issuance of Preferred Stock.
The issuance of Preferred Stock, for example in connection with a shareholder
rights plan, could have the effect of making it more difficult for a third party
to acquire, or of discouraging a third party from acquiring, a majority of the
outstanding capital stock of the Company.
The terms of any particular series of Preferred Stock, including Preferred
Stock represented by Depositary Shares, will be described in the applicable
Prospectus Supplement.
CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION
The Company's Articles of Incorporation provide for a classified Board of
Directors. The directors are divided into three classes. The directors are
elected for three-year terms, which are staggered so that the terms of one-third
of the directors expire each year. The Articles of Incorporation permit
shareholders to remove directors only for cause at a meeting by the affirmative
vote of at least a majority of the outstanding shares of Common Stock. Directors
of the Company may remove directors with or without cause.
The above-described provisions of the Company's Articles of Incorporation
may have certain anti-takeover effects. Such provisions, in addition to the
provisions described below and the possible issuance of preferred stock
discussed above, may make it more difficult for other persons, without the
approval of the Company's Board of Directors, to make a tender offer or
acquisitions of substantial amounts of the Common Stock or to launch other
takeover attempts that a shareholder might consider to be in such shareholder's
best interests.
CERTAIN PROVISIONS OF OHIO LAW
The Company is subject to several anti-takeover provisions under Ohio law
that apply to Ohio public corporations, unless the Company elects to opt out of
these provisions in its Articles of Incorporation or Regulations (by-laws). The
Company has not opted out of these takeover provisions.
Under Ohio's Control Share Acquisition Act (the "Acquisition Act"), any
"control share acquisition" of an Ohio public corporation shall be made only
with the prior authorization of the shareholders of the corporation in
accordance with the provisions of the Acquisition Act. A "control share
acquisition" is defined under the Acquisition Act to mean the acquisition,
directly or indirectly, by any person of shares of a public corporation that,
when added to all other shares of the corporation such person owns, would
entitle such person, directly or indirectly, to exercise voting power in the
election of directors within the following ranges: more than 20%, more than 33%
and a majority.
The Acquisition Act also requires that the acquiring person deliver an
"acquiring person's statement" to the Ohio public corporation. The Ohio public
corporation must then convene a special meeting of its shareholders to vote upon
the proposed acquisition within 50 days after receipt of such acquiring person's
statement, unless the acquiring person agrees to a later date.
The Acquisition Act further specifies that the shareholders of the
corporation must approve the proposed control share acquisition by certain
percentages at a special meeting of shareholders at which a quorum is present.
In order to comply with the Acquisition Act, the acquiring person may only
acquire the stock of the Ohio public corporation upon the affirmative vote of:
(i) a majority of the voting power of the corporation that is represented in
person or by proxy at the special meeting and (ii) a majority of the voting
power of the corporation that is represented in person or by proxy at the
special meeting, excluding those shares of the corporation deemed to be
"interested shares" for purposes of the Act.
"Interested shares" are defined under the Act to mean shares in respect of
which the voting power is controlled by any of the following persons: (i) an
acquiring person; (ii) any officer of the Ohio public corporation; and (iii) any
employee who is also a director of the corporation. "Interested shares" also
include shares of the corporation that are acquired by any person after the date
of the first public disclosure of the proposed acquisition
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and the date of the special meeting, if either (i) the aggregate consideration
paid by such person, and any person acting in concert with him, for such shares
of the Ohio public corporation exceeds $250,000; or (ii) the number of shares
acquired by such person, and any person acting in concert with him, exceeds
one-half of one percent of the outstanding shares of the corporation.
Section 1701.13 of the Ohio Revised Code, inter alia, empowers an Ohio
corporation to indemnify any director, officer, employee or agent of the
corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Similar indemnity is authorized for such person against expenses (including
attorneys' fees) actually and reasonably incurred in connection therewith.
In addition, Section 1701.59 eliminates the personal liability in damages
of a director for violations of the director's fiduciary duty, except if it is
proved by clear and convincing evidence that his action or failure to act
involved acts or omissions undertaken with deliberate intent to cause injury to
the corporation or with reckless disregard for the best interests of the
corporation. The Company has not opted out of Section 1701.59 of the Ohio
Revised Code. This statute does not affect the liability of directors pursuant
to Section 1701.95 of the Ohio Revised Code (providing for liability of
directors for unlawful payment of dividends or unlawful distribution of assets)
nor does it affect the liability of the directors under Federal securities laws.
The Company is also subject to Ohio's Merger Moratorium Act. The Merger
Moratorium Act generally prohibits a wide range of business combinations and
other transactions (including mergers, consolidations, asset sales, loans,
disproportionate distributions of property and disproportionate issuances or
transfers of shares or rights to acquire shares) between an Ohio corporation and
a person that owns, alone or with other related parties, shares representing at
least 10% of the voting power of the corporation (an "Interested Shareholder")
for a period of three years after such person becomes an Interested Shareholder,
unless, prior to the date that the Interested Shareholder became such, the
directors approve either the transaction or the acquisition of the corporation's
shares that resulted in the person becoming an Interested Shareholder. Following
the three-year moratorium period, the corporation may engage in covered
transactions with an Interested Shareholder only if, among other things, (i) the
transaction receives the approval of the holders of two-thirds of all the voting
shares and the approval of the holders of a majority of the voting shares held
by persons other than an Interested Shareholder or (ii) the remaining
shareholders receive an amount for their shares equal to the higher of the
highest amount paid in the past by the Interested Shareholder for the
corporation's shares or the amount that would be due the shareholders if the
corporation were to dissolve.
Contemporaneous with the adoption of Ohio's Merger Moratorium Act, Ohio
enacted a so-called "green mailer disgorgement" statute which provides that a
person who announces a control bid must disgorge profits realized by that person
upon the sale of any equity securities within 18 months of the announcement of
the control bid.
The Company is also subject to Ohio's Control Bid Statute. Ohio's Control
Bid Statute provides that no offeror may make a "control bid" pursuant to a
tender offer or a request or invitation for tenders unless, on the day the
offeror commences a control bid, it files with the Ohio Division of Securities
(the "Securities Division") and the target company certain information in
respect of the offeror, his ownership of the corporation's shares and his plans
for the corporation (including, among other things, plans to terminate employee
benefit plans, close any plant or facility or reduce the work force). If the
Securities Division determines that the offeror's disclosures are inadequate, it
must act within three calendar days from the date of the offeror's filing to
issue a suspension order. If a bid is suspended, a hearing must be held within
10 calendar days from the date of the Securities Division's suspension order.
The hearing procedure must be completed no later than 16 calendar days after the
date on which the suspension was imposed.
A "control bid" under Ohio's Control Bid Statute is defined as the purchase
of or an offer to purchase any equity security of an issuer with certain
connections to Ohio from a resident of Ohio if (i) after the purchase of such
security, the offeror would directly or indirectly be the beneficial owner of
more than 10% of any class of the issued and outstanding equity securities of
the issuer; or (ii) the offeror is the issuer, there is a pending control
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bid by a person other than the issuer and the number of issued and outstanding
shares of the corporation will be reduced by more than 10%.
Finally, Ohio law provides for the right of the Board of Directors to
consider the interests of various constituencies, including employees,
customers, suppliers and creditors of the Company, as well as the communities in
which the Company is located, in addition to the interest of the Company and its
shareholders, in discharging their duties in determining what is in the
Company's best interests.
The above-described provisions of Ohio law may have certain antitakeover
effects. Those provisions make it more difficult for other persons, without the
approval of the Company's Board of Directors, to make a tender offer or
acquisitions of substantial amounts of the Common Stock or to launch other
takeover attempts that a shareholder might consider in such shareholder's best
interests.
TRANSFER AGENT
American Stock Transfer & Trust Company, New York, New York, acts as
transfer agent for the Company's Common Stock.
The transfer agent for any series of Preferred Stock will be named in the
applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The Company may offer Depositary Shares (either separately or together with
other Securities) representing fractional interests in shares of Preferred Stock
of any series. In connection with the issuance of any Depositary Shares, the
Company will enter into a deposit agreement (a "Deposit Agreement") with a bank
or trust company, as depositary (the "Preferred Stock Depositary"), which will
be named in the applicable Prospectus Supplement. Depositary Shares will be
evidenced by depositary receipts (the "Depositary Receipts") issued pursuant to
the related Deposit Agreement. The summary of certain provisions of the
Depositary Shares and the Deposit Agreement set forth below and the summary of
certain terms of a particular issue of Depositary Shares and the related Deposit
Agreement set forth in the applicable Prospectus Supplement do not purport to be
complete and are subject to and qualified in their entirety by reference to all
the provisions of the form of Deposit Agreement, together with the form of
related Depositary Receipt which will be filed as an exhibit to or incorporated
by reference in the Registration Statement, all of which are incorporated herein
by reference.
The following description of Depositary Shares sets forth certain general
terms and provisions of the Depositary Shares and the related Deposit Agreement
to which any Prospectus Supplement may relate. Certain other terms of any such
Depositary Shares and the related Deposit Agreement will be described in the
applicable Prospectus Supplement. To the extent that any particular terms of the
Depositary Shares or the related Deposit Agreement described in a Prospectus
Supplement differ from any of the terms described herein, then such terms
described herein shall be deemed to have been superseded by such Prospectus
Supplement.
INFORMATION TO BE PROVIDED IN THE APPLICABLE PROSPECTUS SUPPLEMENT
The Company may provide for the issuance by the Preferred Stock Depositary
of Depositary Receipts evidencing the related Depositary Shares, each of which
Depositary Shares in turn will represent a fractional interest (which will be
specified in the applicable Prospectus Supplement) in one share of a series of
Preferred Stock. Shares of Preferred Stock of any series represented by
Depositary Shares will be deposited under a separate Deposit Agreement. Subject
to the terms of the Deposit Agreement, each owner of a Depositary Receipt will
be entitled, in proportion to the fraction of a share of Preferred Stock
represented by the related Depositary Share, to all the rights, preferences and
privileges of, and will be subject to all of the limitations and restrictions
on, the Preferred Stock represented thereby (including, if applicable and
subject to certain matters discussed below, dividend, voting, conversion,
exchange, redemption and liquidation rights).
Depositary Shares may be issued in respect of shares of the Preferred Stock
of any series. Immediately following the issuance of any such shares of
Preferred Stock by the Company, the Company will deposit such
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shares of Preferred Stock with the relevant Preferred Stock Depositary and will
cause the Preferred Stock Depositary to issue, on behalf of the Company, the
related Depositary Receipts.
Reference is made to the applicable Prospectus Supplement relating to the
Depositary Shares offered thereby for specific terms, including (where
applicable): (i) the terms of the series of Preferred Stock deposited by the
Company under the related Deposit Agreement; (ii) the number of such Depositary
Shares and the fraction of one share of such Preferred Stock represented by one
such Depositary Share; (iii) whether such Depositary Shares will be listed on
any securities exchange; (iv) whether such Depositary Shares will be sold with
any other Securities and, if so, the amount and terms thereof; and (v) any other
specific terms of such Depositary Shares and the related Deposit Agreement.
Depositary Receipts may be surrendered for transfer or exchange for new
Depositary Receipts of different authorized denominations at any office or
agency of the relevant Preferred Stock Depositary maintained for such purpose,
subject to the terms of the related Deposit Agreement. Unless otherwise
specified in the applicable Prospectus Supplement, Depositary Receipts will be
issued in denominations evidencing any whole number of Depositary Shares. No
service charge will be made for any permitted transfer or exchange of Depositary
Receipts, but the Company or the Preferred Stock Depositary may require payment
of any tax or other governmental charge payable in connection therewith.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related Preferred Stock to the
record holders of Depositary Receipts in proportion, insofar as possible, to the
number of Depositary Receipts owned by such holders on the relevant record date.
The Preferred Stock Depositary will distribute only such amount, however, as can
be distributed without attributing to any holder of Depositary Receipts a
fraction of one cent, and any balance not so distributed will be added to and
treated as part of the next sum, if any, received by the Preferred Stock
Depositary for distribution to the record holders of Depositary Receipts.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto in proportion, insofar as possible, to the
number of Depositary Receipts owned by such holders on the relevant record date,
unless the Preferred Stock Depositary determines that it is not feasible to make
such distribution, in which case the Preferred Stock Depositary may, with the
approval of the Company, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including sale (public or
private) of such property and distribution of the net proceeds from such sale to
such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the related series of Preferred Stock will be made available to holders of
Depositary Receipts.
The amount distributed in any of the foregoing cases will be reduced by any
amount required to be withheld by the Company or the Preferred Stock Depositary
on the account of taxes.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of the Depositary Receipts at an office or agency of the
Preferred Stock Depositary maintained for such purpose (unless the related
shares of Preferred Stock have previously been called for redemption), the
holder thereof will be entitled to delivery, at such office or agency, to or
upon such holder's order, of the number of whole shares of the related series of
Preferred Stock and any money or other property represented by such Depositary
Receipts. Shares of Preferred Stock so withdrawn, however, may not be
redeposited. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of whole shares of Preferred
Stock to be withdrawn, the Preferred Stock Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares.
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REDEMPTION AND REPURCHASE OF PREFERRED STOCK
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption at the option of the Company, then, whenever the Company redeems
shares of Preferred Stock of such series held by the Preferred Stock Depositary,
the Preferred Stock Depositary will redeem as of the same redemption date the
number of Depositary Shares representing the shares of the Preferred Stock so
redeemed, provided the Company shall have paid in full to the Preferred Stock
Depositary the redemption price of the Preferred Stock to be redeemed plus any
other amounts or property payable with respect to the Preferred Stock to be
redeemed. The redemption price per Depositary Share will be equal to the
redemption price and any other amounts or property per share payable with
respect to the Preferred Stock multiplied by the fraction of a share of
Preferred Stock represented by one such Depositary Share. If less than all of
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by the Preferred Stock Depositary by lot or pro rata or other
equitable method, in each case as may be determined by the Company. If the
Depositary Shares evidenced by a Depositary Receipt are to be redeemed in part
only, one or more new Depositary Receipts will be issued for any Depositary
Shares not so redeemed.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Receipts evidencing the Depositary Shares so called
for redemption will cease, except the right to receive any monies payable upon
such redemption and any money or other property to which the holders of such
Depositary Receipts were entitled upon such redemption upon surrender of such
Depositary Receipts to the Preferred Stock Depositary.
Depositary Shares, as such, are not subject to repurchase by the Company at
the option of the holders. Nevertheless, if the Preferred Stock represented by
Depositary Shares is subject to repurchase of the option of the holders, the
related Depositary Receipts may be surrendered by the holders thereof to the
Preferred Stock Depositary with written instructions to the Preferred Stock
Depositary to instruct the Company to repurchase the Preferred Stock represented
by the Depositary Shares evidenced by such Depositary Receipts at the applicable
repurchase price specified in the related Prospectus Supplement. The Company,
upon receipt of such instructions and subject to the Company having funds
legally available therefor, will repurchase the requisite whole number of shares
of such Preferred Stock from the Preferred Stock Depositary, who in turn will
repurchase such Depositary Receipts. Notwithstanding the foregoing, holders
shall only be entitled to request the repurchase of Depositary Shares
representing one or more whole shares of the related Preferred Stock. The
repurchase price per Depositary Share will be equal to the repurchase price and
any other amounts per share payable with respect to the Preferred Stock
multiplied by the fraction of a share of Preferred Stock represented by one
Depositary Share. If the Depositary Shares evidenced by a Depositary Receipt are
to be repurchased in part only, one or more new Depositary Receipts will be
issued for any Depositary Shares not to be repurchased.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock of any series represented by Depositary Shares are entitled to vote, the
relevant Preferred Stock Depositary will mail the information contained in such
notice of meeting to the record holders of the related Depositary Receipts. Each
record holder of Depositary Receipts evidencing Depositary Shares on the record
date (which will be the same date as the record date for the Preferred Stock)
will be entitled to instruct the Preferred Stock Depositary as to the exercise
of the voting rights pertaining to the amount of Preferred Stock represented by
such holder's Depositary Shares. The Preferred Stock Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
represented by such Depositary Shares in accordance with such instructions, and
the Company will agree to take all reasonable action which may be deemed
necessary by the Preferred Stock Depositary in order to enable the Preferred
Stock Depositary to do so. The Preferred Stock Depositary will abstain from
voting shares of Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Receipts evidencing the Depositary
Shares representing such Preferred Stock.
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CONVERSION AND EXCHANGE OF PREFERRED STOCK
If the Preferred Stock represented by Depositary Shares is exchangeable at
the option of the Company for other Securities, then, whenever the Company
exercises its option to exchange all or a portion of such shares of Preferred
Stock held by the Preferred Stock Depositary, the Preferred Stock Depositary
will exchange as of the same exchange date a number of such Depositary Shares
representing the shares of the Preferred Stock so exchanged, provided the
Company shall have issued and deposited with the Preferred Stock Depositary the
Securities for which such shares of Preferred Stock are to be exchanged. The
exchange rate per Depositary Share shall be equal to the exchange rate per share
of Preferred Stock multiplied by the fraction of a share of Preferred Stock
represented by one Depositary Share. If less than all of the Depositary Shares
are to be exchanged, the Depositary Shares to be exchanged will be selected by
the Preferred Stock Depositary by lot or pro rata or other equitable method, in
each case as may be determined by the Company. If the Depositary Shares
evidenced by a Depositary Receipt are to be exchanged in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary Shares not to
be exchanged.
Depositary Shares, as such, are not convertible or exchangeable at the
option of the holders into other Securities or property. Nevertheless, if the
Preferred Stock represented by Depositary Shares is convertible into or
exchangeable for other Securities at the option of the holders, the related
Depositary Receipts may be surrendered by holders thereof to the Preferred Stock
Depositary with written instructions to the Preferred Stock Depositary to
instruct the Company to cause conversion or exchange, as the case may be, of the
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipts into a whole number of shares of Common Stock or Preferred
Stock, a whole number of Common Stock Warrants, or Debt Securities in authorized
denominations, as specified in the related Prospectus Supplement. The Company,
upon receipt of such instructions and any amounts payable in respect thereof,
will cause the conversion or exchange, as the case may be, and will deliver to
the holders such number of whole shares of Common Stock or Preferred Stock, a
whole number of Common Stock Warrants, or a principal amount of Debt Securities
in authorized denominations (and cash in lieu of any fractional Security). The
exchange or conversion rate per Depositary Share shall be equal to the exchange
or conversion rate per share of Preferred Stock multiplied by the fraction of a
share of Preferred Stock represented by one Depositary Share. If the Depositary
Shares evidenced by a Depositary Receipt are to be converted or exchanged in
part only, a new Depositary Receipt or Receipts will be issued for any
Depositary Shares not to be converted or exchanged.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The Depositary Receipts evidencing Depositary Shares and any provision of
the related Deposit Agreement may at any time be amended by agreement between
the Company and the Preferred Stock Depositary. However, any amendment that
materially and adversely alters the rights of the holders of Depositary Receipts
issued under any Deposit Agreement will not be effective unless such amendment
has been approved by the holders of at least a majority of such Depositary
Receipts then outstanding (or such greater proportion as may be required by the
rules of any securities exchange on which the related Depositary Shares may be
listed). In no event may any such amendment impair the right of any holder of
Depositary Receipts, subject to the conditions specified in the Deposit
Agreement, to receive the related Preferred Stock upon surrender of such
Depositary Receipts as described above under "--Withdrawal of Preferred Stock."
The Deposit Agreement may be terminated by the Company upon not less than
60 days' notice to the Preferred Stock Depositary. In any such case, the
Preferred Stock Depositary shall deliver or make available to each holder of the
related Depositary Receipts, upon surrender of such Depositary Receipts, such
number of whole shares of the related series of Preferred Stock represented by
the Depositary Shares evidenced by such Depositary Receipts, together with cash
in lieu of any fractional shares (to the extent the Company has deposited such
cash with the Preferred Stock Depositary). The Deposit Agreement will
automatically terminate if all of the shares of Preferred Stock deposited
thereunder shall have been withdrawn, redeemed, converted or exchanged or if
there shall have been a final distribution in respect of such Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company.
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CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay the fees and expenses of the Preferred Stock
Depositary in connection with the performance of its duties under the Deposit
Agreement, and will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. Holders of
Depositary Receipts will be required to pay all other transfer and other taxes
and governmental charges (including taxes and other governmental charges in
connection with the transfer, exchange, surrender or conversion of Depositary
Receipts) and such other charges as are expressly provided in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if
either is prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder without gross negligence or
willful misconduct, and the Company and the Preferred Stock Depositary will not
be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or any related shares of Preferred Stock or Depositary
Receipts unless satisfactory indemnity is furnished. The Company and the
Preferred Stock Depositary may rely on advice of counsel, accountants or other
advisors, and information provided by persons presenting shares of Preferred
Stock for deposit, holders of Depositary Receipts or other persons believed to
be authorized or competent and on documents believed to be genuine.
In the event that the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
DESCRIPTION OF WARRANTS
The Company has no Warrants outstanding (other than options issued under
the Company's stock option plans). The Company may issue Warrants for the
purchase of Debt Securities, Common Stock or Preferred Stock registered hereby.
Warrants may be issued independently or together with any other securities
offered by any Prospectus Supplement and may be attached to or separate from
such securities. Each series of Warrants will be issued under a separate warrant
agreement (each, a "Warrant Agreement") to be entered into between the Company
and a warrant agent specified in the applicable Prospectus Supplement (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any provisions of the
Warrants offered hereby. Further terms of the Warrants and the applicable
Warrant Agreements will be set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (i) the title of such Warrants; (ii) the
aggregate number of such Warrants; (iii) the price or prices at which such
Warrants will be issued; (iv) the designation, terms and number of securities
purchasable upon exercise of such Warrants; (v) the designation and terms of the
securities, if any, with which such Warrants are issued and the number of such
Warrants issued with each such security; (vi) the date, if any, on and after
which such Warrants and the related securities will be separately transferable;
(vii) the price at which each security purchasable upon exercise of such
Warrants may be
22
<PAGE> 25
purchased; (viii) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire; (ix) the minimum or
maximum amount of such Warrants which may be exercised at any one time; (x)
information with respect to book-entry procedures, if any; and (xi) any other
terms of such Warrants, including terms, procedures and limitations relating to
the exchange and exercise of such Warrants.
DESCRIPTION OF TRUST PREFERRED SECURITIES
The Trust may issue only one series of Trust Preferred Securities which
shall have terms described in the Prospectus Supplement relating thereto. The
Declaration of Trust will authorize the Regular Trustees to issue on behalf of
the Trust the Trust Preferred Securities. The Declaration will be qualified as
an indenture under the Trust Indenture Act. The form of Declaration has been or
will be filed or incorporated by reference as an exhibit to the Registration
Statement. The terms of the Declaration will be those set forth in the
Declaration and those made part of the Declaration by the Trust Indenture Act.
The summary of certain provisions of the Trust Preferred Securities and the
Declaration set forth below and in any Prospectus Supplement do not purport to
be complete and are subject to and are qualified in their entirety by reference
to all of the provisions of the Declaration and the Trust Securities, which
provisions (including defined terms) are incorporated herein by reference.
The following description of the Trust Preferred Securities and the
Declaration sets forth certain general terms and provisions of the Trust
Preferred Securities and the Declaration to which any Prospectus Supplement may
relate. Certain other specific terms of the Trust Preferred Securities and the
Declaration will be described in the applicable Prospectus Supplement. To the
extent that any particular terms of any Trust Preferred Securities or the
Declaration described in a Prospectus Supplement differ from any of the terms
described herein, then such terms described herein shall be deemed to have been
superseded by such Prospectus Supplement.
The Trust Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation, conversion rights and such other
preferred, deferred or other special rights or such restrictions as shall be set
forth in the Declaration or made part of the Declaration by the Trust Indenture
Act, and which will generally mirror the terms of the Subordinated Debt
Securities held by the Trust and described in the Prospectus Supplement related
23
<PAGE> 26
thereto. Reference is made to the Prospectus Supplement relating to the Trust
Preferred Securities for specific terms, including
<TABLE>
<C> <S>
(i) the designation of such Trust Preferred Securities;
(ii) the number of Trust Preferred Securities;
(iii) the annual distribution rate (or method of determining such
rate) for the Trust Preferred Securities and the date or
dates upon which such distributions shall be payable;
(iv) whether distributions on the Trust Preferred Securities
shall be cumulative, and, in the case of Trust Preferred
Securities having such cumulative distribution rights, the
date or dates or method of determining the date or dates
from which distributions on the Trust Preferred Securities
shall be cumulative;
(v) the amount or amounts which shall be paid out of the assets
of the Trust to the holders of the Trust Preferred
Securities upon voluntary or involuntary dissolution,
winding-up or termination of the Trust;
(vi) the right or obligation, if any, of the Trust to purchase or
redeem the Trust Preferred Securities and the price or
prices at which, the period or periods within which, and the
terms and conditions upon which, the Trust Preferred
Securities shall or may be purchased or redeemed, in whole
or in part, pursuant to such obligation;
(vii) the voting rights, if any, of the Trust Preferred Securities
in addition to those required by law, including the number
of votes per Trust Preferred Security and any requirement
for the approval by the holders of the Trust Preferred
Securities, as a condition to specified action or amendments
to the Declaration;
(viii) the terms and conditions, if any, upon which the Trust
Preferred Securities may be converted into or exchanged for
shares of Common Stock or other Securities, including the
conversion price per share or conversion rate and the
circumstances, if any, under which any such conversion right
shall expire;
(ix) the terms and conditions, if any, upon which the
Subordinated Debt Securities may be distributed to holders
of the Trust Preferred Securities;
(x) if applicable, any securities exchange upon which the Trust
Preferred Securities shall be listed; and
(xi) any other relevant rights, preferences, privileges,
limitations or restrictions of the Trust Preferred
Securities.
</TABLE>
All Trust Preferred Securities offered hereby will be guaranteed by the
Company to the extent set forth below under "Trust Preferred Securities
Guarantee." Certain United States Federal income tax considerations applicable
to any offering of Trust Preferred Securities will be described in the
Prospectus Supplement relating thereto.
In connection with the issuance of Trust Preferred Securities, the Trust
will issue one series of Trust Common Securities. The Declaration will authorize
the Regular Trustees to issue on behalf of the Trust one series of Trust Common
Securities having such terms including distributions, redemption, voting and
liquidation rights or such restrictions as shall be set forth therein. The terms
of the Trust Common Securities will be substantially identical to the terms of
the Trust Preferred Securities, and the Trust Common Securities will rank
equally ("pari passu"), and payments will be made thereon pro rata, with the
Trust Preferred Securities except that, upon an event of default under the
Declaration, the rights of the holders of the Trust Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. Except in certain limited circumstances, the Trust Common
Securities will also carry the right to vote to appoint, remove or replace any
of the Trustees. All of the Trust Common Securities will be directly or
indirectly owned by the Company.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an event of default under the Declaration occurs and is continuing, then
the holders of the Trust Preferred Securities would rely on the enforcement by
the Property Trustee of its rights as a holder of the Subordinated Debt
Securities against the Company. In addition, the holders of a majority in
liquidation amount of the Trust
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<PAGE> 27
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Subordinated Debt
Securities. If the Property Trustee fails to enforce its rights under such
Subordinated Debt Securities, a holder of the Trust Preferred Securities, to the
fullest extent permitted by law, may institute a legal proceeding directly
against the Company to enforce the Property Trustee's rights under such
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. Notwithstanding the
foregoing, if an event of default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Company to pay
the principal of or premium or interest, if any, on such Subordinated Debt
Securities on the date such principal, premium or interest, as the case may be,
is otherwise payable (or in the case of redemption, on the redemption date),
then a holder of the Trust Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal, premium
or interest, as the case may be, on such Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the Trust
Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Subordinated Debt Securities. In connection
with such Direct Action, the Company will be subrogated to the rights of such
holder of the Trust Preferred Securities under the Declaration to the extent of
any payment made by the Company to such holder of Trust Preferred Securities in
such Direct Action.
TRUST PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Trust Preferred
Securities Guarantee which will be executed and delivered by the Company for the
benefit of the holders from time to time of Trust Preferred Securities. The
Trust Preferred Securities Guarantee will be qualified as an indenture under the
Trust Indenture Act. A trustee whose name will be set forth in the applicable
Prospectus Supplement will act as the trustee under the Trust Preferred
Securities Guarantee (the "Preferred Guarantee Trustee") for purposes of the
Trust Indenture Act. The form of Trust Preferred Securities Guarantee has been
or will be filed or incorporated by reference as an exhibit to the Registration
Statement. The terms of the Trust Preferred Securities Guarantee will be those
set forth in the Trust Preferred Securities Guarantee and those made part of the
Trust Preferred Securities Guarantee by the Trust Indenture Act. The summary of
certain provisions of the Trust Preferred Securities Guarantee set forth below
and in any Prospectus Supplement does not purport to be complete and is subject
to and qualified in its entirety by reference to all of the provisions of the
Trust Preferred Securities Guarantee, which provisions of the Trust Preferred
Securities Guarantee (including defined terms) are incorporated herein by
reference. The Trust Preferred Securities Guarantee will be held by the
Preferred Guarantee Trustee for the benefit of the holders of the Trust
Preferred Securities.
The following description of the Trust Preferred Securities Guarantee sets
forth certain general terms and provisions of the Trust Preferred Securities
Guarantee to which any Prospectus Supplement may relate. Certain other specific
terms of the Trust Preferred Securities Guarantee will be described in the
applicable Prospectus Supplement. To the extent that any particular terms of the
Trust Preferred Securities Guarantee described in a Prospectus Supplement differ
from any of the terms described herein, then such terms described herein shall
be deemed to have been superseded by such Prospectus Supplement.
Terms of the Trust Preferred Securities Guarantee
Pursuant to the Trust Preferred Securities Guarantee, the Company will
agree, to the extent set forth therein, to pay in full to the holders of the
Trust Preferred Securities, the Guarantee Payments (as defined herein) (except
to the extent paid by the Trust), as and when due, regardless of any defense,
right of setoff or counterclaim which the Trust may have or assert. The
following payments with respect to the Trust Preferred Securities to the extent
not paid by the Trust (the "Guarantee Payments"), will be subject to the Trust
Preferred Securities Guarantee thereof (without duplication):
(i) any accrued and unpaid distributions which are required to be paid on
such Trust Preferred Securities, to the extent the Trust shall have
funds available therefor;
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<PAGE> 28
(ii) the redemption price (if any) set forth in the applicable Prospectus
Supplement (the "Redemption Price"), which will not be lower than the
liquidation amount, and all accrued and unpaid distributions, to the
extent the Trust has funds available therefor, with respect to any
Trust Preferred Securities called for redemption by the Trust and
(iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with the
distribution of Subordinated Debt Securities to the holders of Trust
Preferred Securities or the conversion or redemption of all of the
Trust Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the
Trust Preferred Securities to the date of payment, to the extent the
Trust has funds available therefor, and (b) the amount of assets of
the Trust remaining available for distribution to holders of the
Trust Preferred Securities in liquidation of the Trust.
The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of Trust
Preferred Securities or by causing the Trust to pay such amounts to such
holders.
The Trust Preferred Securities Guarantee will not apply to any payment of
distributions on the Trust Preferred Securities except to the extent the Trust
shall have funds available therefor. If the Company does not make interest
payments on the Subordinated Debt Securities purchased by the Trust, the Trust
will not pay distributions on the Trust Preferred Securities issued by the Trust
and will not have funds available therefor. The Trust Preferred Securities
Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Indenture and the Declaration, including its
obligations to pay certain costs, expenses, debts and liabilities of the Trust
(other than with respect to the Trust Securities), will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Trust Preferred Securities.
The Company has also agreed separately to guarantee the obligations of the
Trust with respect to the Trust Common Securities (the "Trust Common Securities
Guarantee") to the same extent as the Trust Preferred Securities Guarantee,
except that upon an event of default under the Indenture, holders of Trust
Preferred Securities shall have priority over holders of Trust Common Securities
with respect to distributions and payments on liquidation, redemption or
otherwise.
Certain covenants of the Company to be set forth in the Trust Preferred
Securities Guarantee will be described in the applicable Prospectus Supplement.
Modification of the Trust Preferred Securities Guarantee; Assignment
Except with respect to any changes which do not materially adversely affect
the rights of holders of Trust Preferred Securities (in which case no vote will
be required), the Trust Preferred Securities Guarantee may be amended only with
the prior approval of the holders of not less than a majority in liquidation
amount of the outstanding Trust Preferred Securities. The manner of obtaining
any such approval of holders of such Trust Preferred Securities will be as set
forth in an accompanying Prospectus Supplement. All guarantees and agreements
contained in the Trust Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of the Trust Preferred Securities then
outstanding.
Termination
The Trust Preferred Securities Guarantee will terminate (a) upon full
payment of the Redemption Price of all Trust Preferred Securities, (b) upon
distribution of the Subordinated Debt Securities held by the Trust to the
holders of the Trust Preferred Securities or the conversion or redemption, if
applicable, of all of the Trust Preferred Securities or (c) upon full payment of
the amounts payable in accordance with the Declaration upon liquidation of the
Trust. The Trust Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Trust
Preferred Securities must restore payment of any sums paid under the Trust
Preferred Securities or the Trust Preferred Securities Guarantee.
26
<PAGE> 29
Events of Default
An event of default under the Trust Preferred Securities Guarantee will
occur upon (a) the failure of the Company to perform any of its payment or other
obligations thereunder or (b) if applicable, the failure by the Company to
deliver Common Stock or other applicable securities upon an appropriate election
by the holder or holders of Trust Preferred Securities to convert the Trust
Preferred Securities into shares of Common Stock or other applicable securities,
as the case may be.
The holders of a majority in liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of the Trust Preferred Securities Guarantee or to direct the exercise of
any trust or power conferred upon the Preferred Guarantee Trustee under such
Trust Preferred Securities. If the Preferred Guarantee Trustee fails to enforce
such Trust Preferred Securities Guarantee, any holder of Trust Preferred
Securities may institute a legal proceeding directly against the Company to
enforce the Preferred Guarantee Trustee's rights under such Trust Preferred
Securities Guarantee, without first instituting a legal proceeding against the
Trust, the Preferred Guarantee Trustee or any other person or entity. The
Company will waive any right or remedy to require that any action be brought
first against the Trust or any other person or entity before proceeding directly
against the Company.
Status of the Trust Preferred Securities Guarantee
The Trust Preferred Securities Guarantee will constitute an unsecured
obligation of the Company and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Company, (ii) pari passu in right of
payment with the most senior preferred or preference stock now or hereafter
issued by the Company, if any, and with any guarantee now or hereafter entered
into by the Company in respect of any preferred or preference stock of any
affiliate of the Company and (iii) senior to Common Stock. The terms of the
Trust Preferred Securities provide that each holder of Trust Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Trust Preferred Securities Guarantee relating thereto.
The Trust Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity).
Information Concerning the Preferred Guarantee Trustee
The Preferred Guarantee Trustee, prior to the occurrence of a default with
respect to the Trust Preferred Securities Guarantee, undertakes to perform only
such duties as are specifically set forth in such Trust Preferred Securities
Guarantee and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Preferred Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Trust Preferred
Securities Guarantee at the request of any holder of the Trust Preferred
Securities, unless offered reasonable indemnity against the costs, expenses and
liabilities which might be incurred thereby.
PLAN OF DISTRIBUTION
The Company or the Trust may offer securities directly or through
underwriters, dealers or agents. The supplement will identify those
underwriters, dealers or agents and will describe the plan of distribution. If
we do not name a firm in the supplement, that firm may not directly or
indirectly participate in any underwriting of those securities, although it may
participate in the distribution of securities under circumstances entitling it
to a dealer's allowance or agent's commission.
Any underwriting agreement probably will entitle the underwriters to
indemnity against certain civil liabilities under the Federal securities laws
and other laws. The underwriters' obligations to purchase securities will be
subject to certain conditions and generally will require them to purchase all of
the securities if any are purchased.
27
<PAGE> 30
Unless otherwise noted in the supplement, the securities will be offered by
the underwriters, if any, when, as and if issued by the Company or the Trust,
delivered to and accepted by the underwriters and subject to their right to
reject orders in whole or in part.
The Company and the Trust may sell securities to dealers, as principals.
Those dealers then may resell the securities to the public at varying prices set
by those dealers from time to time.
The Company and the Trust also may offer securities through agents. Agents
generally act on a "best efforts" basis during their appointment, meaning they
are not obligated to purchase securities.
Dealers and agents may be entitled to indemnification as underwriters by us
against certain liabilities under the Federal securities laws and other laws.
The Company or the Trust or the underwriters or agents may solicit offers
by institutions approved by us to purchase securities under contracts providing
for future payment. Permitted institutions include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others. Certain conditions apply to those purchases.
Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Securities Exchange Act of 1934. Over-allotment involves sales in
excess of the offering size, which creates a short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Short covering transactions
involve purchases of the securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the underwriters to
reclaim a selling concession from a dealer when the securities originally sold
by the dealer are purchased in a covering transaction to cover short positions.
Those activities may cause the price of the securities to be higher than it
would otherwise be. If commenced, the underwriters may discontinue those
activities at any time.
The supplement will set forth the anticipated delivery date of the
securities being sold at that time.
LEGAL MATTERS
Unless otherwise noted in a supplement, Cowden, Humphrey & Sarlson Co.,
L.P.A., Cleveland, Ohio, will pass on the legality of the securities offered
through this Prospectus and any supplement. Brown & Wood LLP, New York, New York
will act as counsel for any underwriters or agents, unless otherwise noted in a
supplement. Cowden, Humphrey & Sarlson Co., L.P.A. will rely as to certain
matters of New York law upon the opinion of Brown & Wood LLP, and Brown & Wood
LLP will rely as to certain matters of Ohio law upon the opinion of Cowden,
Humphrey & Sarlson Co., L.P.A.
EXPERTS
The consolidated financial statements of Advanced Lighting Technologies,
Inc. and subsidiaries as of June 30, 1997 and 1996 and for each of the three
years in the period ended June 30, 1997 incorporated by reference in this
Prospectus and Registration Statement and the financial statements of Ruud
Lighting, Inc. as of November 30, 1997 and 1996 and for each of the three years
in the period ended November 30, 1997 incorporated by reference in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors as set forth in their reports thereon and are incorporated
by reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
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<PAGE> 31
- ------------------------------------------------------
- ------------------------------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY SUPPLEMENT HERETO. WE HAVE AUTHORIZED NO ONE
TO PROVIDE YOU WITH DIFFERENT INFORMATION.
WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY LOCATION WHERE THE OFFER
IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS, INCLUDING
INFORMATION INCORPORATED BY REFERENCE, IS ACCURATE AS OF ANY DATE OTHER THAN THE
DATE ON THE FRONT OF THE PROSPECTUS.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information... 2
The Company........................... 3
The Trust............................. 4
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends........... 5
Special Note Regarding Forward-Looking
Statements.......................... 5
Use Of Proceeds....................... 5
Description Of Debt Securities........ 5
Description Of Capital Stock.......... 15
Description Of Depositary Shares...... 18
Description of Warrants............... 22
Description of Trust Preferred
Securities.......................... 23
Plan Of Distribution.................. 27
Legal Matters......................... 28
Experts............................... 28
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$300,000,000
ADVANCED LIGHTING
TECHNOLOGIES, INC.
ADLT TRUST I
DEBT SECURITIES, COMMON STOCK,
PREFERRED STOCK, DEPOSITARY SHARES
AND WARRANTS OF
ADVANCED LIGHTING TECHNOLOGIES, INC.
TRUST PREFERRED SECURITIES OF
ADLT TRUST I
------------------------
PROSPECTUS
------------------------
, 1998
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 32
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated amounts of the expenses of and related to the offering are as
follows:
<TABLE>
<S> <C>
Registration fee............................................ $ 88,500
Rating agency fees*......................................... 25,000
Printing fees*.............................................. 150,000
NASD fee.................................................... 30,500
Legal fees and expenses*.................................... 240,000
Accounting fees and expenses*............................... 180,000
NASDAQ National Market listing fees*........................ 35,000
Trustee fees and expenses*.................................. 4,500
Miscellaneous expenses*..................................... 46,500
--------
Total*................................................. $800,000
</TABLE>
- ------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 1701.59 of the Ohio Revised Code, which
eliminates the personal liability in damages of a director for violations of the
director's fiduciary duty, except if it is proved by clear and convincing
evidence that his action or failure to act involved acts or omissions undertaken
with deliberate intent to cause injury to the corporation or with reckless
disregard for the best interests of the corporation. This statute does not
affect the liability of directors pursuant to Section 1701.95 of the Ohio
Revised Code (providing for liability of directors for unlawful payment of
dividends or unlawful distribution of assets).
Reference is made to section 1701.13 of the Ohio Revised Code, which
provides that a corporation may indemnify directors and officers as well as
other employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative other than an action by or in the name of the corporation (a
"derivative action") if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful. A similar standard is applicable in the case
of derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's articles of
incorporation, code of regulations, disinterested director vote, shareholder
vote, agreement or otherwise.
Reference is made to Article Seven of the Code of Regulations (by-laws) of
the Company contained in Exhibit 3.2 hereto which provides for the
indemnification of directors and officers to the fullest extent permitted by
Ohio law.
Reference is also made to the Underwriting Agreement to be filed or
incorporated by reference as Exhibit 1.1 hereto, which will provide for
indemnification of controlling persons, directors and certain officers of the
Company against certain liabilities.
II-1
<PAGE> 33
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Articles of Incorporation of Advanced
Lighting Technologies, Inc. (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the Quarterly Period ended December 31, 1996)
3.2 Code of Regulations of Advanced Lighting Technologies, Inc.
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (No. 33-97902), effective
December 11, 1995)
4.1 Form of Indenture**
4.2 Indenture, dated as of March 18, 1998, between the Company
and the Bank of New York (incorporated by reference to
Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
for the Quarterly Period ended March 31, 1998)
4.3 Form of Senior Debt Security*
4.4 Form of Subordinated Debt Security*
4.5 Form of Convertible Debt Security*
4.6 Form of Preferred Stock Certificate of Designation*
4.7 Form of Warrant*
4.8 Form of Warrant Agreement*
4.9 Form of Deposit Agreement*
4.10 Declaration of Trust of ADLT Trust I**
4.11 Form of Amended and Restated Declaration of Trust, including
form of Preferred Security of the Trust
4.12 Form of Guarantee Agreement with respect to the Preferred
Securities of the Trust
4.13 Form of 8% Senior Note due 2008**
5.1 Opinion of Cowden, Humphrey & Sarlson Co., L.P.A. as to the
legality of the securities to be issued other than the
Preferred Securities of the Trust**
5.2 Opinion of Brown & Wood LLP regarding certain matters
relating to New York law**
5.3 Opinion of Potter Anderson & Corroon LLP as to the validity
of the Preferred Securities of the Trust
12.1 Statement of Computation of Ratios of Advanced Lighting
Technologies, Inc.**
23.1 Consent of Ernst & Young LLP, Independent Auditors**
23.2 Consent of Cowden, Humphrey & Sarlson Co., L.P.A. (included
in Exhibit 5.1)**
23.3 Consent of Brown & Wood LLP (included in Exhibit 5.2)**
23.4 Consent of Potter Anderson & Corroon LLP (included in
Exhibit 5.3)
24.1 Powers of Attorney**
25.1 Form T-1 Statement of Eligibility with respect to the Debt
Securities*
25.2 Form T-1 Statement of Eligibility with respect to the Debt
Securities issuable under the Indenture dated as of March
18, 1998, between the Company and The Bank of New York**
25.3 Form T-1 Statement of Eligibility with respect to the
Amended and Restated Declaration of Trust*
25.4 Form T-1 Statement of Eligibility with respect to the
Preferred Securities Guarantee*
</TABLE>
- ---------------
* To be filed with a Current Report on Form 8-K or a Post-Effective Amendment
to Registration Statement
** Previously filed
ITEM 17. UNDERTAKINGS
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement.
II-2
<PAGE> 34
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high and of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrants pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d) The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
<PAGE> 35
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT (FORM S-3, NO. 333-58613) TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE
OF OHIO, ON AUGUST 5, 1998.
ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/ Wayne R. Hellman
------------------------------------
Wayne R. Hellman,
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Wayne R. Hellman Chief Executive Officer and Director August 5, 1998
- ------------------------------------------
Wayne R. Hellman
/s/ Nicholas R. Sucic Chief Financial Officer, Vice President August 5, 1998
- ------------------------------------------ and Treasurer (Chief Accounting Officer)
Nicholas R. Sucic
/s/ Alan J. Ruud* Director August 5, 1998
- ------------------------------------------
Alan J. Ruud
/s/ Louis S. Fisi Director August 5, 1998
- ------------------------------------------
Louis S. Fisi
/s/ Theodore A. Filson* Director August 5, 1998
- ------------------------------------------
Theodore A. Filson
/s/ Francis H. Beam* Director August 5, 1998
- ------------------------------------------
Francis H. Beam
/s/ Susuma Harada* Director August 5, 1998
- ------------------------------------------
Susuma Harada
/s/ A Gordon Tunstall* Director August 5, 1998
- ------------------------------------------
A Gordon Tunstall
/s/ John R. Buerkle* Director August 5, 1998
- ------------------------------------------
John R. Buerkle
</TABLE>
- ---------------
* The undersigned by signing his name hereto, does hereby execute this Amendment
No. 1 to the Registration Statement on behalf of the above indicated officers
and directors of Advanced Lighting Technologies, Inc., pursuant to the Powers
of Attorney executed by each such officer and director appointing the
undersigned as attorney-in-fact and filed with the Securities and Exchange
Commission.
By: /s/ Wayne R. Hellman
------------------------------------
Wayne R. Hellman
Attorney-in-Fact
II-4
<PAGE> 36
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT (FORM S-3, NO. 333-58613) TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE
OF OHIO, ON AUGUST 5, 1998.
ADLT TRUST I
By: Advanced Lighting Technologies,
Inc.,
As Sponsor
By: /s/ Wayne R. Hellman
------------------------------------
Wayne R. Hellman
Chief Executive Officer
II-5
<PAGE> 37
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Articles of Incorporation of Advanced
Lighting Technologies, Inc. (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the Quarterly Period ended December 31, 1996)
3.2 Code of Regulations of Advanced Lighting Technologies, Inc.
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (No. 33-97902), effective
December 11, 1995)
4.1 Form of Indenture**
4.2 Indenture, dated as of March 18, 1998, between the Company
and the Bank of New York (incorporated by reference to
Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
for the Quarterly Period ended March 31, 1998)
4.3 Form of Senior Debt Security*
4.4 Form of Subordinated Debt Security*
4.5 Form of Convertible Debt Security*
4.6 Form of Preferred Stock Certificate of Designation*
4.7 Form of Warrant*
4.8 Form of Warrant Agreement*
4.9 Form of Deposit Agreement*
4.10 Declaration of Trust of ADLT Trust I**
4.11 Form of Amended and Restated Declaration of Trust, including
form of Preferred Security of the Trust
4.12 Form of Guarantee Agreement with respect to the Preferred
Securities of the Trust
4.13 Form of 8% Senior Note due 2008**
5.1 Opinion of Cowden, Humphrey & Sarlson Co., L.P.A. as to the
legality of the securities to be issued other than the
Preferred Securities of the Trust**
5.2 Opinion of Brown & Wood LLP regarding certain matters
relating to New York law**
5.3 Opinion of Potter Anderson & Corroon LLP as to the validity
of the Preferred Securities of the Trust
12.1 Statement of Computation of Ratios of Advanced Lighting
Technologies, Inc.**
23.1 Consent of Ernst & Young LLP, Independent Auditors**
23.2 Consent of Cowden, Humphrey & Sarlson Co., L.P.A. (included
in Exhibit 5.1)**
23.3 Consent of Brown & Wood LLP (included in Exhibit 5.2)**
23.4 Consent of Potter Anderson & Corroon LLP (included in
Exhibit 5.3)
24.1 Powers of Attorney**
25.1 Form T-1 Statement of Eligibility with respect to the Debt
Securities*
25.2 Form T-1 Statement of Eligibility with respect to the Debt
Securities issuable under the Indenture dated as of March
18, 1998, between the Company and The Bank of New York**
25.3 Form T-1 Statement of Eligibility with respect to the
Amended and Restated Declaration of Trust*
25.4 Form T-1 Statement of Eligibility with respect to the
Preferred Securities Guarantee*
</TABLE>
- ---------------
* To be filed with a Current Report on Form 8-K or a Post-Effective Amendment
to Registration Statement
** Previously filed
<PAGE> 1
Exhibit 4.11
=================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
ADLT TRUST I
---------------------------------------
DATED AS OF __________, __ ______
---------------------------------------
=================================================
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
PAGE
ARTICLE I
DEFINITIONS
<S> <C> <C>
Section 1.1 Definitions............................................................................2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.......................................................7
Section 2.2 Lists of Holders of Preferred Securities...............................................7
Section 2.3 Reports by the Property Trustee........................................................8
Section 2.4 Periodic Reports to Property Trustee...................................................8
Section 2.5 Evidence of Compliance with Conditions Precedent.......................................8
Section 2.6 Events of Default; Waiver..............................................................8
Section 2.7 Events of Default; Notice.............................................................10
ARTICLE III
ORGANIZATION
Section 3.1 Name..................................................................................10
Section 3.2 Office................................................................................10
Section 3.3 Issuance of the Trust Securities......................................................11
Section 3.4 Purchase of Debentures................................................................11
Section 3.5 Purpose...............................................................................12
Section 3.6 Authority.............................................................................12
Section 3.7 Title to Property of the Trust........................................................12
Section 3.8 Powers and Duties of the Regular Trustees.............................................12
Section 3.9 Prohibition of Actions by Trust and Trustees..........................................15
Section 3.10 Powers and Duties of the Property Trustee.............................................15
Section 3.11 Delaware Trustee......................................................................18
Section 3.12 Certain Rights and Duties of the Property Trustee.....................................18
Section 3.13 Registration Statement and Related Matters............................................20
Section 3.14 Filing of Amendments to Certificate of Trust..........................................21
Section 3.15 Execution of Documents by Regular Trustees............................................21
Section 3.16 Trustees Not Responsible for Recitals or Issuance of Securities.......................21
Section 3.17 Duration of Trust.....................................................................22
Section 3.18 Mergers...............................................................................22
ARTICLE IV
SPONSOR
Section 4.1 Purchase of Common Securities by Sponsor..............................................23
Section 4.2 Expenses..............................................................................23
</TABLE>
i
<PAGE> 3
ARTICLE V
TRUSTEES
<TABLE>
<CAPTION>
<S> <C> <C>
Section 5.1 Number of Trustees; Qualifications....................................................24
Section 5.2 Appointment, Removal and Resignation of Trustees......................................26
Section 5.3 Vacancies among Trustees..............................................................27
Section 5.4 Effect of Vacancies...................................................................27
Section 5.5 Meetings..............................................................................27
Section 5.6 Delegation of Power...................................................................28
Section 5.7 Merger, Conversion, Consolidation or Succession
to Business...........................................................................28
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.........................................................................28
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities...............................................29
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust..................................................................30
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities................................................................31
Section 9.2 Transfer of Certificates..............................................................32
Section 9.3 Deemed Security Holders...............................................................32
Section 9.4 Book Entry Interests..................................................................32
Section 9.5 Notices to Holders of Certificates....................................................33
Section 9.6 Appointment of Successor Clearing Agency..............................................33
Section 9.7 Definitive Preferred Securities Certificates..........................................33
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.....................................34
ARTICLE X
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 10.1 Exculpation...........................................................................34
Section 10.2 Indemnification.......................................................................35
Section 10.3 Outside Business......................................................................35
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year...........................................................................36
Section 11.2 Certain Accounting Matters............................................................36
Section 11.3 Banking...............................................................................36
Section 11.4 Withholding...........................................................................36
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE XII
AMENDMENTS AND MEETINGS
<S> <C> <C>
Section 12.1 Amendments............................................................................37
Section 12.2 Meetings of the Holders of Securities; Action by Written Consent......................38
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee....................................39
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices...............................................................................40
Section 14.2 Undertaking for Costs.................................................................41
Section 14.3 Governing Law and Consent to Jurisdiction.............................................41
Section 14.4 Headings..............................................................................42
Section 14.5 Partial Enforceability................................................................42
Section 14.6 Counterparts..........................................................................42
Section 14.7 Intention of the Parties..............................................................42
Section 14.8 Successors and Assigns................................................................42
EXHIBIT A:........CERTIFICATE OF TRUST
EXHIBIT B:........TERMS OF THE PREFERRED SECURITIES
EXHIBIT C:........TERMS OF THE COMMON SECURITIES
</TABLE>
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture Act Section of
OF 1939, AS AMENDED DECLARATION
<S> <C>
310(a)............................................................ 5.1(a)
310(b)............................................................ 5.1(c)
310(c)............................................................ Inapplicable
311(a) and (b).................................................... 2.2(b)
311(c)............................................................ Inapplicable
312(a)............................................................ 2.2(a)
312(b)............................................................ 2.2(b)
313............................................................... 2.3
314(a)............................................................ 2.4
314(b)............................................................ Inapplicable
314(c)............................................................ 2.5
314(d)............................................................ Inapplicable
314(e)............................................................ 2.5
314(f)............................................................ Inapplicable
315(a)............................................................ 3.12(b)
315(b)............................................................ 2.7
315(c)............................................................ 3.12(a)
315(d)............................................................ 3.12(b)
316(a)............................................................ 2.6
316(b)............................................................ 2.6
316(c)............................................................ 3.8(f)
---------------
</TABLE>
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any of its terms
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
ADLT TRUST I
----------, --------
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of __________, ______ by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Advanced
Lighting Technologies, Inc., an Ohio corporation, as trust sponsor ("ADLT" or
the "Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and Mark A. Ferruci entered into a Declaration of
Trust dated as of June 1, 1998 (the "Original Declaration") in order to
establish a statutory business trust (the "Trust") under the Business Trust Act
(as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the
Trust was filed with the office of the Secretary of State of the State of
Delaware on June 1, 1998 and is being restated on even date herewith;
WHEREAS, the Trustees and the Sponsor desire to continue the Trust
pursuant to the Business Trust Act for the purpose of, as described more fully
in Sections 3.3 and 3.4 hereof, (i) issuing and selling Preferred Securities (as
defined herein) representing preferred undivided beneficial interests in the
assets of the Trust for cash and investing the proceeds thereof in Debentures
(as hereinafter defined) of ADLT issued under the Indenture (as hereinafter
defined) to be held as assets of the Trust, (ii) issuing and selling Common
Securities (as defined herein) representing common undivided beneficial
interests in the assets of the Trust to ADLT in exchange for cash and investing
the proceeds thereof in additional Debentures issued under the Indenture to be
held as assets of the Trust and (iii) making Distributions (as hereinafter
defined) to holders of the Preferred Securities and the Common Securities; and
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act, that the
Original Declaration be amended and restated in its entirety as provided herein
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets referred to in clauses (i) and (ii)
of the previous Whereas clause purchased by the Trust will be held in trust for
the benefit of the Holders (as defined herein) from time to time, of the
Certificates (as defined herein) representing undivided beneficial interests in
the assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
<PAGE> 7
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Amended and Restated Declaration of Trust (including Exhibits A, B and C
hereto (the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Sums" has the meaning specified in the Supplemental
Indenture.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Base Indenture" means the indenture dated as of __________, ______
between ADLT and the Debenture Trustee.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in the City of New York, in the State of New
York are authorized or required by applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Certificate of Trust" has the meaning set forth in the second Whereas
clause above.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depository
for the Preferred Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global
2
<PAGE> 8
Certificate and which shall undertake to effect book entry transfers and pledges
of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section ((Sec.))
of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission as from time
to time constituted, or if at any time after the execution of this Declaration
such Commission is not existing and performing the duties now assigned to it
under applicable Federal securities law, then the body performing such duties at
such time.
"Common Security" has the meaning specified in Section 7.1(b).
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
"Common Stock" means the common stock of ADLT, par value $.001 per
share.
["Conversion Agent" has the meaning specified in Section 7.2.]
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or its Affiliates, (ii)
any officer, director, shareholder, employees, representatives or agents of ADLT
or its Affiliates and (iii) the Holders from time to time of the Securities.
"Debenture Trustee" means __________________, as trustee under the
Indenture until a successor is appointed thereunder and thereafter means such
successor trustee.
"Debentures" means the series of Junior Subordinated Debentures issued
by ADLT under the Indenture to the Property Trustee and entitled the "[_____%]
[Floating Rate] Junior Subordinated Debentures due _____".
"Deferred Interest" has the meaning specified in the Supplemental
Indenture.
"Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.1(a)(iii).
3
<PAGE> 9
"Depositary Agreement" means the agreement among the Trust, the
Property Trustee and DTC dated as of the Closing Date, as the same may be
amended or supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Indenture
Event of Default has occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee,
[any Conversion Agent,] any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee or Paying
Agent, or any employee or agent of the Trust or its Affiliates.
"Indenture" means the Base Indenture as supplemented by the
Supplemental Indenture.
"Indenture Event of Default" means an event or condition defined as an
"Event of Default" with respect to the Debentures under Section _____ of the
Indenture has occurred and is continuing.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time or any successor legislation.
"Legal Action" has the meaning specified in Section 3.8(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and
C hereto establishing the terms of the Securities.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph [6] of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting
4
<PAGE> 10
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Exhibits B and C hereto.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of even
date herewith of ADLT in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1(b).
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate in
fully registered form representing a Preferred Security substantially in the
form of Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.1(c) and having the duties set forth for the
Property Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and
the Delaware Trustee.
5
<PAGE> 11
"Related Party" means any direct or indirect wholly owned subsidiary of
ADLT or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of ADLT.
"Resignation Request" has the meaning specified in Section 5.2(d).
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Property Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the
Securities as set forth in Exhibits B and C hereto.
"Sponsor" or "ADLT" means Advanced Lighting Technologies, Inc., an Ohio
corporation, or any successor entity in a merger, in its capacity as sponsor of
the Trust.
"Stock Exchange" has the meaning specified in Section 3.8(s).
"Successor Delaware Trustee" has the meaning specified in Section
5.2(b)(ii).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.1(c).
"10% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph [6] of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities,
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such
6
<PAGE> 12
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
__________, ______ among the Trust, the Sponsor and ____________.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law
and/or the rules and regulations of the Commission, shall be the only Trustee
which is a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee with such information as is required under
ss. 312(a) of the Trust Indenture Act at the times and in the manner provided in
ss. 312(a); and
(b) the Property Trustee shall comply with its obligations under ss.ss.
310(b), 311 and 312(b) of the Trust Indenture Act.
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Section 2.3 Reports by the Property Trustee.
Within 60 days after _________ of each year, commencing __________
______, the Property Trustee shall provide to the Holders of the Securities such
reports as are required by ss. 313 of the Trust Indenture Act, if any, in the
form, in the manner and at the times provided by ss. 313 of the Trust Indenture
Act. The Property Trustee shall also comply with the requirements of ss. 313(d)
of the Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as required
by ss. 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by ss. 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by ss. 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to ss. 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each Fiscal Year).
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given pursuant to ss. 314(c) shall comply
with ss. 314(e) of the Trust Indenture Act.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Indenture
Event of Default:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii)requires the consent or vote of (x) holders of
Debentures representing a specified percentage greater than a majority
in principal amount of the Debentures (a "Super Majority") or (y) each
holder of Debentures affected thereby to be waived under the Indenture,
then the Event of Default under the Declaration may only be waived by
the vote of, in the case of (x) above, Holders of Preferred Securities
representing at least such specified percentage of the aggregate
liquidation amount of the outstanding Preferred Securities or, in the
case of (y) above, each Holder of outstanding Preferred Securities
affected thereby.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture
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Act. Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent there on. Any
waiver by the Holders of the Preferred Securities of an Event of Default with
respect to the Preferred Securities shall also be deemed to constitute a waiver
by the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Indenture
Event of Default:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of (x) a Super Majority
or (y) each holder of Debentures affected thereby to be waived,
except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of, in the case of clause
(x) above, Holders of Common Securities representing at least such
specified percentage of the aggregate liquidation amount of the
outstanding Common Securities or, in the case of clause (y) above,
each holder of outstanding Common Securities affected thereby;
provided further, each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events
of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default with
respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Institutional Trust will be deemed to be
acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to
direct the Property Trustee in accordance with the terms of the
Securities.
The foregoing provisions of this Section 2.6(b) shall be in lieu of
Section 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act and such
Section 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property Trustee
at the direction of the Holders of the Preferred Securities constitutes a waiver
of the corresponding Event of Default
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under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Indenture Event of Default with respect to the Debentures, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures, the
Property Trustee shall be protected in withholding such notice if and so long as
a Responsible Officer of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default with respect to the Debentures except:
(i) a default with respect to the Debentures under (A)
Section of the Base Indenture, as amended and restated by
Section of the Supplemental Indenture, or (B) Section
of the Base Indenture; or
(ii) any default with respect to the Debentures as to which
the Property Trustee shall have received written notice or of which a
Responsible Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust continued by this Declaration is named "ADLT Trust I" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o Advanced
Lighting Technologies, Inc., 32000 Aurora Road, Solon, Ohio 44139. Upon ten
days' written notice to the Holders, the Regular Trustees may change the
location of the Trust's principal office. The name of the registered agent
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and office of the Trust in the State of Delaware is __________. At any time, the
Regular Trustees may designate another registered agent and/or registered
office.
Section 3.3 Issuance of the Trust Securities.
On __________, ______ the Sponsor, on behalf of the Trust and pursuant
to the Original Declaration, executed and delivered the Underwriting Agreement.
On the Closing Date and contemporaneously with the execution and delivery of
this Declaration, the Regular Trustees, on behalf of the Trust, shall execute
and deliver to (i) the underwriters named in the Underwriting Agreement, a
Global Certificate, registered in the name of the nominee of the initial
Clearing Agency as specified in Section 9.4, in an aggregate amount of
___________ Preferred Securities having an aggregate liquidation amount of
$___________, against receipt of the aggregate purchase price of such Preferred
Securities of $__________, and (ii) the Sponsor, Common Securities Certificates,
registered in the name of the Sponsor, in an aggregate amount of _________
Common Securities having an aggregate liquidation amount of $_________, against
receipt of the aggregate purchase price of such Common Securities of
$__________. In the event and to the extent the overallotment option granted by
the Trust pursuant to the Underwriting Agreement is exercised by such
underwriters, on the Option Closing Date the Regular Trustees, on behalf of the
Trust, shall execute and deliver to (i) such underwriters a Global Certificate,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.4, in an aggregate amount of up to __________ Preferred
Securities having an aggregate liquidation amount of up to $__________ against
receipt of the aggregate purchase price of such Preferred Securities of up to
$__________, and (ii) the Sponsor, Common Security Certificates, registered in
the name of the Sponsor, in an aggregate amount of ______ Common Securities
having an aggregate liquidation amount of up to $_________, against receipt of
the aggregate purchase price of such Common Securities of up to $___________.
Section 3.4 Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and
delivery of this Declaration, the Regular Trustees, on behalf of the Trust,
shall purchase from the Sponsor with the proceeds received by the Trust from the
sale of the Securities on such date pursuant to Section 3.3, at a purchase price
of 100% of the principal amount thereof, Debentures, registered in the name of
the Property Trustee and having an aggregate principal amount equal to
$__________, and, in satisfaction of the purchase price for such Debentures, the
Regular Trustee, on behalf of the Trust, shall deliver or cause to be delivered
to the Sponsor the sum of $__________. In the event the overallotment option
granted by the Trust with respect to the Preferred Securities pursuant to the
Underwriting Agreement is exercised by the underwriters named therein, on the
Option Closing Date the Regular Trustees, on behalf of the Trust, shall purchase
from the Sponsor with the proceeds received by the Trust from the sale of the
Preferred Securities on such date pursuant to Section 3.3, at a purchase price
of 100% of the principal amount thereof, additional Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount of up
to $___________, and, in satisfaction of the purchase price for such Debentures,
the Regular Trustees, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor an amount equal to the aggregate principal amount of
the Debentures being purchased.
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Section 3.5 Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue
and sell Preferred Securities for cash and use the proceeds of such sales to
acquire from ADLT Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; (iii) to
issue and sell Common Securities to ADLT for cash and use the proceeds of such
sale to purchase as trust assets an equal aggregate principal amount of
Debentures issued under the Indenture; and (iv) to make Distributions to Holders
of the Securities; and (b) except as otherwise limited herein, to engage in only
those other activities necessary, convenient or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets or at any time while the Securities are
outstanding, otherwise undertake (or permit to be undertaken) any activity that
would result in or cause the Trust to be treated as anything other than a
grantor trust for United States federal income tax purposes.
Section 3.6 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.7 Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and
the Property Account or unless otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
individual undivided beneficial interest in the assets of the Trust.
Section 3.8 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty
to cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case
in accordance with this Declaration; provided, however, that the Trust may issue
no more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to (x) a one-time, simultaneous issuance of both Preferred Securities
and Common
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Securities on the Closing Date and (y) any subsequent issuance of Preferred
Securities on the Option Closing Date pursuant to an exercise of the
over-allotment option granted to the underwriters in the Underwriting Agreement;
(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale
of the Preferred Securities and Common Securities; provided, however, that the
Regular Trustees shall cause legal title to all of the Debentures to be vested
in, and the Debentures to be held of record in the name of, the Property Trustee
for the benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) to cause the Trust to enter into the Underwriting Agreement and
such other agreements and arrangements as may be necessary or desirable in
connection with the sale of Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided, that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining to
take any Ministerial Action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of Section 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by ss.
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
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(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities, the Regular Trustees hereby initially
appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of
the Regular Trustee pursuant to the terms of the Securities set forth in
Exhibits B and C hereto;
(n) to execute all documents or instruments, perform all duties and
powers and do all things for and on behalf of the Trust in all matters necessary
or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(p) to take all action, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
reasonable and necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.8, in order that:
(i) the Trust will not be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States
federal income tax purposes as an association taxable as a corporation
or a partnership and will be treated as a grantor trust for United
States federal income tax purposes; and
(iii) the Trust will comply with any requirements imposed
by any taxing authority on holders of instruments treated as
indebtedness for United States federal income tax purposes; provided
that such action does not adversely affect the interests of Holders;
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust; and
(r) subject to the requirements of Rule 3a-7 and ss. 317(b) of the
Trust Indenture Act, to appoint one or more Paying Agents in addition to the
Property Trustee; and
(s) at the direction of the Sponsor, execute and file an application,
prepared by the Sponsor, to the New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market (any of the
foregoing, a "Stock Exchange") for listing or quotation of the Preferred
Securities.
The Regular Trustees must exercise the powers set forth in this Section
3.8 in a manner which is consistent with the purposes and functions of the Trust
set out in Section 3.5 and the Regular Trustees shall not take any action which
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.5.
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Subject to this Section 3.8, the Regular Trustees shall have none of
the powers nor any of the authority of the Property Trustee set forth in Section
3.10.
Section 3.9 Prohibition of Actions by Trust and Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures but shall promptly distribute all such proceeds (net of any
Additional Sums) to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership of,
or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h) other than as provided in this Declaration, (i) direct the time,
method and place of exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (ii) waive any past default that is
waivable under Section ____ of the Indenture, (iii) exercise any right to
rescind or annul any declaration that the principal of all of the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, unless in the case of this clause (h) the Property Trustee shall have
received an unqualified opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that such action will not
cause the Trust to be classified for United States federal income tax purposes
as an association taxable as a corporation or partnership and that the Trust
will continue to be classified as a grantor trust for United States federal
income tax purposes.
Section 3.10 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Article 5. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
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(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or, if the Property Trustee
does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing bank account (the "Property Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
of the Securities and on the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Account and, without any further acts of the
Property Trustee or the Regular Trustees, promptly make payments to the
Holders of the Preferred Securities and Common Securities from the
Property Account in accordance with Section 6.1. Funds in the Property
Account shall be held uninvested, and without liability for interest
thereon, until disbursed in accordance with this Declaration. The
Property Account shall be an account which is maintained with a banking
institution whose long term unsecured indebtedness is rated by a
"nationally recognized statistical rating organization", as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act, at
least equal to (but in no event less than "A" or the equivalent) the
rating assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect promptly the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature;
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect promptly the distribution
pursuant to terms of the Securities of Debentures to Holders of
Securities upon the occurrence of a Special Event; and
(iv) have the legal power to exercise all of the rights,
powers and privileges of a holder of the Debentures under the Indenture
and, if an Event of Default occurs and is continuing, the Property
Trustee, subject to Section 2.6, shall for the benefit of the Holders
of the Securities, enforce its rights as holder of the Debentures under
the Indenture, subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration, the Business
Trust Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration, the Business Trust Act or the Trust
Indenture Act; provided however, that the Holders of a Majority in liquidation
amount of the Preferred Securities will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee or
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to direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Debentures. If the
Property Trustee fails to enforce its rights under the Debentures, a Holder of
Preferred Securities, to the extent permitted by law, may institute a legal
proceeding directly against ADLT to enforce the Property Trustee's rights under
the Debentures without first instituting any legal proceeding against the
Property Trustee or any other Person; provided further, that, if an Event of
Default has occurred and is continuing and such event is attributed to the
failure of the Sponsor to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder (a
"Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of such Holder
of Preferred Securities to the extent of any payment made by the Sponsor to such
Holders of Preferred Securities in such Holder Direct Action. Except as provided
in the preceding sentences, the Holders of Preferred Securities will not be able
to exercise directly any remedy available to the Holders of the Debentures.
(f) All moneys deposited in the Property Account, and all Debentures
held by the Property Trustee for the benefit of the Holders of the Securities,
will not be subject to any right, charge, security interest, lien or claim of
any kind in favor of, or for the benefit of the Property Trustee or its agents
or their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of
a default with respect to the Securities known to the Property Trustee, transmit
by mail, first class postage prepaid, to the holders of the Securities, as their
names and addresses appear upon the register, notice of all such defaults with
respect to the Securities, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
3.10(g) being hereby defined to be an Indenture Event of Default, not including
any periods of grace provided for in the Indenture and irrespective of the
giving of any notice provided therein); provided, that, except in the case of
default in the payment of the principal of (or premium, if any) or interest on
any of the Debentures, the Property Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Property
Trustee in good faith determine that the withholding of such notice is in the
interests of the Holders of the Securities. The Property Trustee shall not be
deemed to have knowledge of any default, except (i) a default in the payment of
principal, premium or interest on the Debentures or (ii) any default as to which
the Property Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Declaration shall have obtained written
notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the
proceeds thereof distributed to the Holders of Securities pursuant to
the terms of the Securities; or
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(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and the Preferred Securities and, subject to Section 3.8(f),
may authorize one or more Persons (each, including the Property Trustee in such
capacity, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to the Preferred
Securities. Any such Paying Agent shall comply with ss. 317(b) of the Trust
Indenture Act. Any Paying Agent may be removed by the Property Trustee, after
consultation with the Regular Trustees, at any time and a successor Paying Agent
or additional Paying Agents may be appointed at any time by the Property
Trustee, subject to Section 3.08(r).
(j) The Property Trustee shall give prompt written notice to the
Holders of the Securities of any notice received by it from ADLT of its election
to defer payments of interest on the Debentures by extending the interest
payment period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none
of the powers or the authority of the Regular Trustees set forth in Section 3.8.
(l) The Property Trustee shall exercise the powers, duties and rights
set forth in this Section 3.10 and Section 3.12 in a manner which is consistent
with the purposes and functions of the Trust set out in Section 3.5, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.5.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.1(a)(iii), the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees and the Property Trustee (except as
required under the Business Trust Act) described in this Declaration. Except as
set forth in Section 5.1(a)(iii), the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
Section 3.12 Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default
and after the curing or waiving pursuant to Section 2.6 of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration, and no implied covenants shall be
read into this Declaration against the Property Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Property Trustee shall exercise such of the rights and powers vested
in it by this Declaration, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
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(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration, and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders as provided herein
relating to the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee hereunder or under the
Indenture, or exercising any trust or power conferred upon the Property
Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part
and, if the Trust is excluded from the definition of Investment Company
solely by means of Rule 3a-7, subject to the requirements of Rule 3a-7,
request and rely upon a certificate, which shall comply with the
provisions of ss. 314(e) of the Trust Indenture Act, signed by any two
of the Regular Trustees or by an authorized officer of the Sponsor, as
the case may be;
(ii) The Property Trustee (A) may consult with counsel
(which may be counsel to the Sponsor or any of its Affiliates and may
include any of its employees) selected by it in
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good faith and with due care and the written advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice and opinion and (B) shall have the right at
any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
(iii) The Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) The Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holders, unless such Holders shall
have offered to the Property Trustee reasonable security and indemnity
against the costs, expenses (including attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with such
request or direction; provided that nothing contained in this clause
(iv) shall relieve the Property Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or waived)
to exercise such of the rights and powers vested in it by this
Declaration, and to use the same degree of care and skill in this
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; and
(v) Any action taken by the Property Trustee or its agents
hereunder shall bind the Holders of the Securities and the signature of
the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and provisions of
this Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action.
Section 3.13 Registration Statement and Related Matters.
In accordance with the Original Declaration, ADLT and the Trustees have
authorized and directed, and hereby confirm the authorization of, ADLT, as the
sponsor of the Trust, (i) to file with the Commission and execute, in each case
on behalf of the Trust, (a) the Registration Statement on Form S-3 (File No.
333-58613) (the "1933 Act Registration Statement") including any amendments
thereto and any further pre-effective or post-effective amendments to such
Registration Statement, relating to the registration under the Securities Act of
the Preferred Securities of the Trust and (b) a Registration Statement on Form
8-A or other appropriate form (the "1934 Act Registration Statement") (including
all pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b) of the
Exchange Act; (ii) to file with any Stock Exchange and execute on behalf of the
Trust a listing application and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on such Stock Exchange;
(iii) to file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable to
register the Preferred Securities under the securities or "Blue Sky" laws of
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such jurisdictions as ADLT, on behalf of the Trust, may deem necessary or
desirable and (iv) to execute on behalf of the Trust the Underwriting Agreement.
In the event that any filing referred to in clauses (i)-(iii) above is required
by the rules and regulations of the Commission, such Stock Exchange or state
securities or Blue Sky laws, to be executed on behalf of the Trust by the
Trustees, the Regular Trustees, in their capacities as Trustees of the Trust,
are hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Property Trustee and the Delaware Trustee, in their capacities as Trustees of
the Trust, shall not be required to join in any such filing or execute on behalf
of the Trust any such document unless required by the rules and regulations of
the Commission, such Stock Exchange or state securities or blue sky laws. In
connection with all of the foregoing, ADLT and each Trustee, solely in its
capacity as Trustee of the Trust, have constituted and appointed, and hereby
confirm the appointment of, _________________ and ________________ and each of
them, as his, her or its, as the case may be, true and lawful attorneys-in-fact,
and agents, with full power of substitution and resubstitution, for ADLT or such
Trustee or in ADLT's or such Trustee's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to the 1933 Act Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as ADLT or such Trustee might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, shall do or cause
to be done by virtue hereof.
Section 3.14 Filing of Amendments to Certificate of Trust.
The Restated Certificate of Trust as filed with the Secretary of State
of the State of Delaware on ___________, ______ and restated on _____________,
______ is attached hereto as Exhibit A. On or after the date of execution of
this Declaration, the Trustees shall cause the filing with the Secretary of
State of the State of Delaware of such amendments to the Certificate of Trust as
the Trustees shall deem necessary or desirable.
Section 3.15 Execution of Documents by Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as
otherwise required by the Business Trust Act with respect to the Certificate of
Trust or otherwise, a majority of, or if there are only two, both of, the
Regular Trustees are authorized to execute and deliver on behalf of the Trust
any documents which the Regular Trustees have the power and authority to execute
or deliver pursuant to this Declaration.
Section 3.16 Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
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Section 3.17 Duration of Trust.
The Trust, absent termination pursuant to the provisions of Article 8
hereof, shall have existence until ________________ .
Section 3.18 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.18(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by a trust organized as such under the laws of any State; PROVIDED,
THAT:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments
upon liquidation, redemption and maturity;
(ii) if the Trust is not the survivor, the Sponsor
expressly acknowledges or appoints a trustee of the Successor Entity
that possesses the same powers and duties as the Property Trustee as
the holder of the Debenture;
(iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity);
(vi) such successor entity has a purpose identical to that of
the Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee; and
(c) notwithstanding Section 3.18(b), the Trust shall not consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Purchase of Common Securities by Sponsor.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities to
be issued on such date are issued, such purchase to be in an amount equal to 3%
of the total capital of the Trust (including for this purpose the maximum amount
of Preferred Securities, if any, which may be issued on the Option Closing Date
pursuant to the exercise of the overallotment option set forth in the
Underwriting Agreement).
Section 4.2 Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), the costs and expenses relating to the
operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
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registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.2 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.2 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.2.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace the,
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(i) the number of Trustees shall be at least five (5)
unless the Trustee that acts as the Property Trustee also acts as the
Delaware Trustee, in which cases the number of Trustees shall be at
least four (4);
(ii) at least a majority of the Trustees shall at all
times be officers, directors or employees of ADLT;
(iii) if required by the Business Trust Act, one Trustee
(the "Delaware Trustee") shall be either a natural person who is a
resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware and otherwise is permitted to act as a Trustee hereunder under
the laws of the State of Delaware, except that if the Property Trustee
has its principal place of business in the State of Delaware and
otherwise is permitted to act as a Trustee hereunder under the laws of
the State of Delaware, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application; and
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(iv) there shall at all times be a Property Trustee
hereunder which shall satisfy the requirements of Section 5.1(c). Each
Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed
representatives.
(b) The initial Regular Trustees shall be:
---------------
---------------
---------------
c/o Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
(c) There shall at all times be one Trustee which shall act as Property
Trustee. In order to act as Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association
organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of
Columbia, or a corporation, national banking association or other
Person permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
Person publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.1(c)(ii),
the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" (as defined in Rule 3a-7) of the Trust, the
Property Trustee shall possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.2(d).
If the Property Trustee has or shall acquire any "conflicting interest"
within the meaning of ss. 310(b) of the Trust Indenture Act, the Property
Trustee and the Holders of the Common Securities (as if such Holders were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
The Preferred Guarantee shall be deemed to be specifically described in this
Declaration for the purposes of clause (i) of the first proviso contained in ss.
310(b) of the Trust Indenture Act.
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The initial Trustee which shall serve as the Property Trustee is
_______________, a [national banking association], whose address is as set forth
in Section 14.1(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is ,
a Delaware corporation, whose address is as set forth in Section 14.1(b).
(e) Any action taken by Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of Holders of Common Securities convened
for such purpose or by written consent as provided in Section 12.2.
(f) No amendment may be made to this Section 5.1 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
Section 5.2 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.2(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written
instrument executed by the Sponsor;
(ii) Unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, with respect to the
Property Trustee and the Delaware Trustee, by vote of the Holders of a
Majority in liquidation amount of the Preferred Securities voting as a
class at a meeting of Holders of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.2(a) until a Successor Property Trustee
possessing the qualifications to act as Property Trustee under Section
5.1(c) has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees, the Sponsor and the Property Trustee being
removed; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.2(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Section
5.1(a)(iii) (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation.
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(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until:
(A) a Successor Property Trustee possessing the
qualifications to act as Property Trustee under Section 5.1(c)
has been appointed and has accepted such appointment by
instrument executed by such Successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7, until the
assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.2 within 60 days after delivery to the Sponsor and the Trust of a Resignation
Request, the resigning Property Trustee or Delaware Trustee may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
Section 5.3 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1 or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with the requirements of this
Article 5.
Section 5.4 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to annul the Trust or otherwise cause its
dissolution. Whenever a vacancy in the number of Regular Trustees shall occur
until such vacancy is filled as provided in this Article 5, the Regular Trustees
in office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
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Section 5.5 Meetings.
Meetings of the Regular Trustees shall be held from time to time upon
the call of any Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meeting of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meeting of the Regular Trustees or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter; provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
Section 5.6 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any registration statement or amendment
thereto or other document or schedule filed with the Commission or making any
other governmental filing (including, without limitation to filings referred to
in Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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Section 5.7 Merger, Conversion, Consolidation or Succession to
Business.
Any Corporation into which the Property Trustee may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which the Property Trustee shall
be a party, or any Corporation succeeding to all or substantially all of the
corporate trust business of the Property Trustee, shall be the successor of the
Property Trustee hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated but not delivered by the Property Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Property Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Property
Trustee had itself authenticated such Securities.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. Distributions shall be made on the
Preferred Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that ADLT
makes a payment of interest (including Deferred Interest), premium and principal
on the Debentures (or the Sponsor makes a payment in respect of the Preferred
Guarantee) held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed to, to the extent
funds are legally available for that purpose, make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall issue on behalf of the Trust securities
in fully registered form representing undivided beneficial interests in the
assets of the Trust in accordance with Section 7.1(b) and for the consideration
specified in Section 3.3.
(b) The Regular Trustees shall issue on behalf of the Trust one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by reference in, and made a
part of, this Declaration as if specifically set forth herein, and one class of
common securities representing undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Exhibit C (the "Common
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
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(c) The Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular Trustees by any two of
the Regular Trustees). Such signatures may be the manual or facsimile signatures
of the present or any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not
affect the validity of any Certificate. In case any Regular Trustee of the Trust
who shall have signed any of the Certificates shall cease to be such Regular
Trustee before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
Securities may be listed, or to conform to usage. Pending the preparation of
definitive Certificates, the Regular Trustees on behalf of the Trust may execute
temporary Certificates (printed, lithographed or typewritten), in substantially
the form of the definitive Certificates in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Certificates, all as may be determined by the Regular Trustees. Each
temporary Certificate shall be executed by the Regular Trustees on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by this Declaration.
Section 7.2 [Conversion Agent.
The Trust shall maintain an office or agency where Preferred Securities
may be presented for conversion ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
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another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may act as Conversion Agent. The Trust shall act
as Conversion Agent for the Common Securities. The Conversion Agent shall be
entitled to the rights and protections extended to the Property Trustee when
acting in such capacity.
The Property Trustee is hereby initially appointed as Conversion Agent
for the Preferred Securities.]
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; upon receipt by the Trust of
the consent of the Holders of at least a Majority in liquidation amount
of the outstanding Securities voting together as a single class to
dissolve the Trust and file a certificate of cancellation with respect
thereto, or the revocation of the Sponsor's charter and the expiration
of 90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and, after satisfaction of liabilities
of creditors (whether by payment or reasonable provision for payment),
when all of the Debentures held by the Property Trustee shall have been
distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) [upon the conversion of all outstanding Preferred
Securities into ADLT Common Stock or other cash, securities or
property, as the case may be;]
(vii) the expiration of the term of the Trust on ; or
(viii) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), after satisfaction of liabilities of creditors (whether by
payment or reasonable provision for
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payment), the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware and the Trust shall terminate.
(c) The provisions of Article 10 shall survive the termination of the
Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration. Any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) Subject to this Article 9, ADLT and any Related Party may only
transfer Common Securities to ADLT or a Related Party; provided that any such
transfer shall be subject to the condition that the transferor shall have
obtained (1) either a ruling from the Internal Revenue Service or an unqualified
written opinion addressed to the Trust and delivered to the Trustees of
nationally recognized independent tax counsel experienced in such matters to the
effect that such transfer will not (i) cause the Trust to be treated as issuing
a class of interests in the Trust differing from the class of interests
represented by the Common Securities originally issued to ADLT, (ii) result in
the Trust acquiring or disposing of, or being deemed to have acquired or
disposed of, an asset, or (iii) result in or cause the Trust to be treated as
anything other than a grantor trust for United States federal income tax
purposes and (2) an unqualified written opinion addressed to the Trust and
delivered to the Trustees of a nationally recognized independent counsel
experienced in such matters that such transfer will not cause the Trust to be an
Investment Company or controlled by an Investment Company.
Section 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges which may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
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Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance (including Preferred
Securities, if any, issued on the Option Closing Date pursuant to the exercise
of the overallotment option set forth in the Underwriting Agreement), will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) (i) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein or in Rule
3a-7 with respect to the Property Trustee, shall have no obligation to the
Preferred Security Beneficial Owners; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as definitive
Preferred Security Certificates have not been issued (pursuant to Section 9.7
hereof), the Trustees may conclusively rely on, and shall be protected in
relying on, any written instrument (including a proxy) delivered to the Trustees
by the Clearing Agency setting forth the Preferred Security Beneficial Owners'
votes or assigning the right to vote on any matter to any other Persons either
in whole or in part;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will
make book entry transfers among the Clearing Agency Participants and
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receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants.
Section 9.5 Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to
be given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.7, the relevant
Trustees shall give all such notices and communications, specified herein to be
given to Preferred Securities Holders, to the Clearing Agency and, with respect
to any Preferred Security Certificate registered in the name of a Clearing
Agency or the nominee of a Clearing Agency, the Trustees shall, except as set
forth herein or in Rule 3a-7 with respect to the Property Trustee, have no
notice obligations to the Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
Section 9.7 Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6 or (ii) the Regular Trustees elect after consultation
with the Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, such instructions.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b) there
shall be delivered to the Regular Trustees such security or indemnity as may be
required by them to keep each of them harmless, then in the absence of notice
that such Certificate shall have been acquired by a bona fide purchaser, any two
Regular Trustees on behalf of the Trust shall execute and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Regular Trustees may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this section shall constitute conclusive
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evidence of an ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
ARTICLE X
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 10.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (but, in the
case of the Property Trustee, subject to the Trust Indenture Act) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
Section 10.2 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (but, in the case of the Property Trustee,
subject to the Trust Indenture Act) or willful misconduct with respect to such
acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of
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the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in this
Section 10.2.
(c) The provisions of this Section 10.2 shall survive the termination
of this Declaration or the resignation or removal of any Trustee.
Section 10.3 Outside Business.
The Sponsor and any Trustee may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. Neither the Sponsor nor any
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and the Sponsor or any
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor or may act
as depository for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be
_________________, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books and records of the Trust,
together with a copy of this Declaration and a certified copy of the Certificate
of Trust, or any amendment thereto, shall at all times be maintained at the
principal office of the Trust and shall be open for inspection for any
examination by any Holder or its duly authorized representative for any purpose
reasonably related to its interest in the Trust during normal business hours.
(a) The Regular Trustees shall cause to be prepared and mailed to each
Holder of Securities, an annual United States federal income tax information
statement, on such form as is required by the Code, containing such information
with regard to the Securities held by each
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Holder as is required by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later date, the
Regular Trustees shall endeavor to deliver all such statements within 30 days
after the end of each Fiscal Year of the Trust.
(b) The Regular Trustees shall cause to be prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority, such returns to be filed as soon as practicable
after the end of each Fiscal Year of the Trust.
Section 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
Section 11.4 Withholding.
The Trust and the Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount to be withheld was not withheld from a
Distribution, the Trust may reduce subsequent Distributions by the amount of
such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and only
by, a written instrument executed by a majority of the Regular Trustees;
provided, however, that (i) no amendment to this Declaration shall be made
unless the Regular Trustees shall have obtained (A) either a ruling from the
Internal Revenue Service or a written unqualified opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that such amendment will not cause the Trust to be
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classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership and to the effect that the Trust will
continue to be treated as a grantor trust for purposes of United States federal
income taxation and (B) a written unqualified opinion of nationally recognized
independent counsel experienced in such matters to the effect that such
amendment will not cause the Trust to be an Investment Company which is required
to be registered under the Investment Company Act, (ii) at such time after the
Trust has issued any Securities which remain outstanding, any amendment which
would adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be set
forth in the terms of such Securities, (iii) Section 4.2, Section 9.1(c) and
this Section 12.1 shall not be amended without the consent of all of the Holders
of the Securities, (iv) no amendment which adversely affects the rights, powers
and privileges of the Property Trustee shall be made without the consent of the
Property Trustee, (v) Article 4 shall not be amended without the consent of the
Sponsor, and (vi) the rights of Holders of Common Securities under Article 5 to
increase or decrease the number of, and to appoint, replace or remove, Trustees
shall not be amended without the consent of each Holder of Common Securities.
(b) Notwithstanding Section 12.2(a)(ii), this Declaration may be
amended without the consent of the Holders of the Securities to (i) cure any
ambiguity, (ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration, (iii)
to add to the covenants, restrictions or obligations of the Sponsor, and (iv) to
conform to any changes in Rule 3a-7 or any change in interpretation or
application of Rule 3a-7 by the Commission, which amendment does not adversely
affect the rights, preferences or privileges of the Holders.
Section 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common
Securities may be called at any time by the Regular Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading. The Regular
Trustees shall call a meeting of Holders of Preferred Securities or Common
Securities, if directed to do so by Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
specified Certificates shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to
all the Holders of Securities having a right to vote thereat not less
than 7 days nor more than 60 days prior to the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which
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the Preferred Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by Holders of Securities
owning not less than the minimum aggregate liquidation amount of
Securities that would be necessary to authorize or take such action at
a meeting at which all Holders of Securities having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities entitled
to vote who have not consented in writing. The Regular Trustees may
specify that any written ballot submitted to the Holders of Securities
for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular
Trustees.
(ii) Each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of a Security is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of the Security executing it. Except as otherwise provided
herein or in the terms of the Securities, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act,
this Declaration or the rules of any stock exchange or trading system
on which the Preferred Securities are then listed or admitted for
trading, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee.
(a) The Trustee which acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
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(i) The Property Trustee is a national banking association
or a banking corporation with trust powers, duly organized, validly
existing and in good standing under the laws of the United States or
the laws of the state of its incorporation, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law).
(iii) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the Charter or By-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or
registration with or notice to, any banking authority which supervises
or regulates the Property Trustee is required for the execution,
delivery or performance by the Property Trustee, of this Declaration.
(v) The Property Trustee satisfies the qualifications set
forth in Section 5.1(c).
(b) The Trustee which acts as initial Delaware Trustee represents and
warrants to the Trust and the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that it satisfies the qualifications set forth in Section
5.1(a)(iii).
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Regular
Trustees on behalf of the Trust may give notice of to the Holders of the
Securities and the other Trustees):
ADLT Trust I
c/o Advanced Lighting Technologies, Inc.
32000 Aurora Road
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Solon, Ohio 44139
Attention:
Facsimile No:
(b) if given to the Property Trustee, at the mailing address of the
Property Trustee set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities and the other Trustees):
--------------------------
--------------------------
--------------------------
Attention:
Telecopy:
(c) if given to the Delaware Trustee, at the mailing address of the
Delaware Trustee set forth below (or such other address as the Delaware Trustee
may give notice of to the Holders of the Securities and the other Trustees):
--------------------------
--------------------------
--------------------------
Telecopy:
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust and the other Trustees):
Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
Attention:
Facsimile No:
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee
shall also be sent to the Trust. All notices shall be deemed to have been given,
when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.2 Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any
Securities by his or her acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Declaration, or in any suit against the
41
<PAGE> 47
Property Trustee for any action taken or omitted by it as Property Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 14.2 shall not apply to
any suit instituted by the Property Trustee, to any suit instituted by any
Holder of Preferred Securities, or group of Holders of Preferred Securities,
holding more than 10% in aggregate liquidation amount of the outstanding
Preferred Securities, or to any suit instituted by any Holder of Preferred
Securities for the enforcement of the payment of the principal of (or premium,
if any) or interest on the Debentures, on or after the respective due dates
expressed in such Debentures.
Section 14.3 Governing Law and Consent to Jurisdiction.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provisions of law
(whether statutory or common) of the State of Delaware pertaining to trusts
(other than the Business Trust Act) that relate to or regulate in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the acquisition, holding or disposition of any
property, (d) the allocation of receipts and expenditures between income and
principal, (e) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding or investing trust assets, or (f) the
establishment of fiduciary or other standards of responsibility or limitations
on the acts or powers of trustees that are inconsistent (whether more or less
restrictive) with the provisions of this Declaration. In addition to any other
provision of Title 12 of the Delaware Code excluded in this Declaration, Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
The parties hereto, including any Person who becomes a Holder after the
date hereof, hereby consent to (i) the non-exclusive jurisdiction of the courts
of the State of Delaware and any Federal court sitting in Wilmington, Delaware,
and (ii) service of process by certified mail. The foregoing shall not preclude
any party from bringing an action in any other jurisdiction or from serving
process in any other legal means.
Section 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.5 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
42
<PAGE> 48
Section 14.6 Counterparts.
This Declaration may contain more than one counterpart of the signature
pages and this Declaration may be executed by the affixing of the signature of
the Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 14.7 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be
classified for United States federal income tax purposes as an association
taxable as a corporation or partnership but that the Trust be treated as a
grantor trust for United States federal income tax purposes. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
Section 14.8 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
43
<PAGE> 49
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
Advanced Lighting Technologies, Inc.
as Sponsor
By:
------------------------------------------
Name:
Title:
--------------------------------
as Trustee
--------------------------------
as Trustee
--------------------------------
as Trustee
--------------------------------
as Property Trustee
By:
------------------------------------------
Name:
Title:
--------------------------------
as Delaware Trustee
By:
------------------------------------------
Name:
Title:
44
<PAGE> 50
EXHIBIT A
RESTATED CERTIFICATE OF TRUST
OF
ADLT TRUST I
THIS Restated Certificate of Trust of ADLT Trust I (the "Trust"), dated
__________, ____, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. Code ss. 3801 et seq.).
WHEREAS, the Trustees entered into a Certificate of Trust dated as of
June 1, 1998 (the "Original Certificate") in order to form a business trust
under the Delaware Business Trust Act (12 Del. Code ss. 3801 et seq.).
NOW, THERETOFORE, it is the intention of the parties hereto that the
Original Certificate of Trust be amended and restated in its entirety as
provided herein.
1. Name. The name of the business trust being formed hereby is ADLT
Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware is
______________________________.
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
--------------------------
as Delaware Trustee
--------------------------
Name: ____________________
Title: ____________________
--------------------------
as Property Trustee
--------------------------
Name: ____________________
Title: ____________________
--------------------------
---------------
as Trustee
--------------------------
------------------
as Trustee
<PAGE> 51
--------------------------
------------------
as Trustee
2
<PAGE> 52
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust of ADLT Trust I dated as of _________, ______ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. Preferred Securities of the Trust with an
aggregate liquidation amount in the assets of the Trust of _______________
Dollars ($__________) (plus up to an additional ____________ Dollars
($__________) issuable upon exercise of the overallotment option set forth in
the Underwriting Agreement) and a liquidation amount in the assets of the Trust
of $___ per Preferred Security, are hereby designated as "$______ Trust
Preferred Securities, Series A". The Preferred Security Certificates evidencing
the Preferred Securities shall be substantially in the form attached hereto as
Annex I, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice or to conform to the rules of
any stock exchange on which the Preferred Securities are listed. In connection
with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of ADLT having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities so issued and bearing interest at an
annual rate equal to the annual Distribution rate on the Preferred Securities
and Common Securities and having payment and redemption provisions which
correspond to the payment and redemption provisions of the Preferred Securities
and Common Securities.
2. DISTRIBUTIONS. (a) Unless floating rate terms are set forth in Annex
II hereto, Distributions on each Preferred Security will be payable at a fixed
rate per annum of _____% (the "Coupon Rate") of the stated liquidation amount of
$__ per Preferred Security. Distributions in arrears for more than one calendar
quarter will bear interest at the rate per annum of _____% thereof (to the
extent permitted by law), compounded monthly. The term "Distributions" as used
herein means such periodic cash distributions and any such interest payable
unless otherwise stated. A Distribution will be made by the Property Trustee
only to the extent that interest payments are made in respect of the Debentures
held by the Property Trustee. The amount of Distributions payable for any period
will be computed for any quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months.
(b) Distributions on the Preferred Securities will be cumulative, will
accrue from _________, ______ and will be payable quarterly in arrears, on the
last day of each quarter commencing on __________, ______, except as otherwise
described below, but only if and to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. So long as ADLT shall
not be in default in the payment of interest on the Debentures, ADLT has the
right under the Indenture for the Debentures to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarterly interest periods (each, an
"Extension Period") and, as a consequence, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by
<PAGE> 53
applicable law) at the rate of _____% per annum, compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
ADLT may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may not
exceed 20 consecutive quarterly interest periods; and provided that no Extension
Period shall last beyond the date of maturity or any redemption date of the
Debentures.. Upon the termination of any Extension Period and the payment of all
amounts then due, ADLT may commence a new Extension Period, subject to the above
requirements. Payments of accrued Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and records
of the Trust on the relevant record dates. While the Preferred Securities remain
in book-entry only form, the relevant record dates shall be one business day
prior to the relevant Distribution date, and if the Preferred Securities are no
longer in book-entry only form, the Regular Trustees shall have the right to
select relevant record dates which shall be more than one business day prior to
the relevant payment dates. Distributions payable on any Preferred Securities
that are not punctually paid on any Distribution payment date as a result of
ADLT having failed to make the corresponding interest payment on the Debentures
will forthwith cease to be payable to the person in whose name such Preferred
Security is registered on the relevant record date, and such defaulted
Distribution will instead be payable to the person in whose name such Preferred
Security is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless ADLT has elected to make a full
or partial payment of interest accrued on the Debentures on such Distribution
payment date. Subject to any applicable laws and regulations and the provisions
of the Declaration, each payment in respect of the Preferred Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) All Distributions paid with respect to the Preferred Securities and
the Common Securities will be paid Pro Rata to the Holders thereof entitled
thereto. If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities with respect to
Distributions.
(e) [In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock pursuant to the terms
of the Securities as set forth in this Exhibit B to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that if a Security is surrendered for conversion after the close of business on
any regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution date, then, notwithstanding such
conversion, the Distribution payable on such
2
<PAGE> 54
Distribution date will be paid in cash to the person in whose name the Security
is registered at the close of business on such record date, and (other than a
Security or a portion of a Security called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution date) when
so surrendered for conversion, the Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
(g) If, as evidenced by the terms thereof being set forth in Annex II
hereto, Distributions on each Preferred Security will be payable at a floating
rate in accordance with the floating rate terms set forth in Annex II hereto. In
such case, the terms and provisions of Annex II shall supersede any and all
terms hereof to the extent that any such terms of Annex II shall be inconsistent
with the terms as set forth herein.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and Common Securities at the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive Pro Rata solely out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $___ per Preferred Security and Common Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and Common Securities and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Preferred Securities and Common Securities, shall be
distributed Pro Rata to the Holders of the Preferred Securities and Common
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities and Common Securities shall be paid, subject
to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
4. REDEMPTION AND DISTRIBUTION OF DEBENTURES. The Preferred Securities
and Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or distributed as set
forth below:
3
<PAGE> 55
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
__________, or at any time in certain circumstances upon the occurrence of a Tax
Event, the proceeds of such repayment will be promptly applied to redeem Pro
Rata Preferred Securities and Common Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so repaid or
redeemed, upon not less than 30 nor more than 60 days' notice, at a redemption
price per Preferred and Common Security equal to the redemption price of the
Debentures, together with accrued and unpaid Distributions thereon through the
date of redemption, payable in cash (the "Redemption Price"). The date of any
such repayment or redemption of Preferred Securities and Common Securities shall
be established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities to be redeemed
will be redeemed as described in paragraph 4(f)(ii) below. If a partial
redemption would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed, ADLT pursuant to the Indenture will only redeem
Debentures in whole and, as a result, the Trust may only redeem the Preferred
Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, unless the Debentures are redeemed in
the limited circumstances described below, dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee having
an aggregate principal amount equal to the aggregate stated liquidation amount
of and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Preferred Securities and
Common Securities, to be distributed to the Holders of the Preferred Securities
and Common Securities on a Pro Rata basis in liquidation of such Holders'
interests in the Trust, within 90 days following the occurrence of such Special
Event (the "90 Day Period"), provided, however, that in the case of the
occurrence of a Tax Event, as a condition of such dissolution and distribution,
the Regular Trustees shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on any then applicable published revenue
ruling of the Internal Revenue Service, to the effect that the Holders of the
Preferred Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of the dissolution of the Trust and
distribution of Debentures; and provided, further, that, if and as long as at
the time there is available to the Trust the opportunity to eliminate, within
the 90 Day Period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, ADLT or the Holders of the
Preferred Securities ("Ministerial Action"), the Trust will pursue such measure
in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Regular
Trustees have received an opinion (a "Redemption Tax Opinion") of nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that ADLT would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to the
Holders of Preferred
4
<PAGE> 56
Securities and Common Securities in liquidation of such Holder's interest in the
Trust as described in this paragraph 4(c) or (ii) the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, ADLT shall have the right at any time, upon not less
than 30 nor more than 60 days' notice, to redeem the Debentures in whole or in
part for cash at the Redemption Price within 90 days following the occurrence of
such Tax Event, and promptly following such redemption Preferred Securities and
Common Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed will be redeemed by the Trust at
the Redemption Price on a Pro Rata basis; provided, however, that, if at the
time there is available to ADLT or the Regular Trustees on behalf of the Trust
the opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, ADLT or the Regular Trustees on behalf of the Trust
will pursue such measure in lieu of redemption and; provided, further, that ADLT
shall have no right to redeem the Debentures while the Regular Trustees on
behalf of the Trust are pursuing such Ministerial Action. The Common Securities
will be redeemed Pro Rata with the Preferred Securities, except that if an Event
of Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with respect to
payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after _______,
______ as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, (b)
any amendment to, or change in, an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after ___________, ______, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date thereof, subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
other taxes, duties or other governmental charges or (iii) interest payable by
ADLT to the Trust on the Debentures is not, or within 90 days of the date
thereof will not be, deductible by ADLT for United States federal income tax
purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment Company
which is required to be registered under the Investment Company Act, which
Change in 1940 Act Law becomes effective on or after ________,_______.
5
<PAGE> 57
On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Preferred Securities will no longer be deemed to be
outstanding and (ii) certificates representing Preferred Securities will be
deemed to represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing accrued
and unpaid interest equal to accrued and unpaid Distributions on, such Preferred
Securities until such certificates are presented to ADLT or its agent for
transfer or reissuance.
(d) The Trust may not redeem any outstanding Preferred Securities
unless all accrued and unpaid Distributions have been paid on all Preferred
Securities for all quarterly Distribution periods terminating on or prior to the
date of redemption.
(e) If Debentures are distributed to Holders of the Preferred
Securities, ADLT, pursuant to the terms of the Indenture, will use its best
efforts to have the Debentures listed on the Stock Exchange on which the
Preferred Securities were listed immediately prior to the distribution of the
Debentures.
(f) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and Common Securities (a
"Redemption/ Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph (f)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by first-
class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed will be
redeemed Pro Rata from each Holder of Preferred Securities (subject to
adjustment to eliminate fractional Preferred Securities), it being understood
that, in respect of Preferred Securities registered in the name of and held of
record by DTC (or successor Clearing Agency) or any other nominee, the Preferred
Securities will be redeemed from, and the distribution of the proceeds of such
redemption will be made to, each Clearing Agency Participant (or person on whose
behalf such nominee holds such securities) in accordance with the procedures
applied by such agency or nominee.
(iii) Subject to paragraph 9 hereof, if the Trust gives a Redemption/
Distribution Notice in respect of a redemption of Preferred Securities as
provided in this paragraph 4 (which notice will be irrevocable) then (A) while
the Preferred Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on the redemption date,
provided that ADLT has paid the Property Trustee, in immediately available
funds, a sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will deposit irrevocably with
DTC (or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give DTC (or
successor Clearing
6
<PAGE> 58
Agency) irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities and (B) if the Preferred Securities are
issued in definitive form, with respect to the Preferred Securities and provided
that ADLT has paid the Property Trustee, in immediately available funds, a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Property Trustee will pay the relevant Redemption Price
to the Holders of such Preferred Securities by check mailed to the address of
the relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given and
funds deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, Distributions will cease to accrue on
the Preferred Securities called for redemption, such Preferred Securities will
no longer be deemed to be outstanding and all rights of Holders of such
Preferred Securities so called for redemption will cease, except the right of
the Holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the transfer of any
Preferred Securities which have been so called for redemption. If any date fixed
for redemption of Preferred Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If ADLT fails to repay Debentures at maturity or on the date fixed
for this redemption or if payment of the Redemption Price in respect of
Preferred Securities is improperly withheld or refused and not paid either by
the Property Trustee or by ADLT pursuant to the Preferred Securities Guarantee,
Distributions on such Preferred Securities will continue to accrue, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holders of
the Preferred Securities.
(v) Upon the date of dissolution of the Trust and distribution of
Debentures as a result of the occurrence of a Special Event, Preferred Security
Certificates shall be deemed to represent beneficial interests in the Debentures
so distributed, and the Preferred Securities will no longer be deemed
outstanding and may be canceled by the Regular Trustees. The Debentures so
distributed shall have an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so distributed.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), ADLT or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. [CONVERSION RIGHTS. The Holders of Securities shall have the right
at any time prior to the close of business on _________, ___ (or, in the case of
Securities called for redemption, prior to the close of business on the Business
Day prior to the redemption date), at their option, to
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<PAGE> 59
cause the Conversion Agent to convert Securities, on behalf of the converting
Holders, into shares of Common Stock in the manner described herein on and
subject to the following terms and conditions:
The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $___ principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock at
an initial rate of _______ shares of Common Stock per $__ principal amount of
Debentures (which is equivalent to a conversion price of $_____ per share of
Common Stock, subject to certain adjustments set forth in Sections 5.03 and 5.04
of the Supplemental Indenture (as so adjusted, the "Conversion Price")).
(a) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Property Trustee of the Holder's election to
exchange Securities for a portion of the Debentures held by the Trust and the
Property Trustee shall, upon receipt of such notice, deliver to the Conversion
Agent the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Property
Trustee of the Holder's election to convert such Debentures into shares of
Common Stock. If a Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Security is
registered at the close of business on such record date, and (other than a
Security or a portion of a Security called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Security must be accompanied by
payment of an amount equal to the Distribution payable on such Distribution
payment date. Except as provided above, neither the Trust nor the Sponsor will
make, or be required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions accumulated on
the Securities surrendered for conversion, or on account of any accumulated and
unpaid dividends on the shares of Common Stock issued upon such conversion.
Securities shall be deemed to have been converted immediately prior to the close
of business on the day on which the Conversion Request relating to such
Securities is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive Common Stock
issuable upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue and deliver
at the office of the Conversion Agent a certificate or certificates for the
number of full shares of Common Stock issuable upon such
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<PAGE> 60
conversion, together with the cash payment, if any, in lieu of any fraction of
any share to the Person or Persons entitled to receive the same, unless
otherwise directed by the Holder in the Conversion Request and the Conversion
Agent shall distribute such certificate or certificates, together with the
applicable cash payment, if any, to such Person or Persons.
(b) Each Holder of a Security by his acceptance thereof appoints
___________________ as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
section and (ii) to convert all or a portion of the Debentures into Common Stock
and thereupon to deliver such shares of Common Stock in accordance with the
provisions of this section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Sponsor to the Conversion Agent, which in turn will make such payment to
the Holder or Holders of Securities so converted.
(d) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Sponsor shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Sponsor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Trust shall deliver the shares of Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall prepare
and shall use its best efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or qualification of
Common Stock (and all requirements to list Common Stock issuable upon conversion
of Debentures that are at the time applicable), in order to enable the Sponsor
to lawfully issue Common Stock to the Trust upon conversion of the Debentures
and the Trust to lawfully deliver Common Stock to each Holder upon conversion of
the Securities.
(e) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. The Sponsor shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the person requesting
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<PAGE> 61
such issue has paid to the Trust the amount of any such tax, or has established
to the satisfaction of the Trust that such tax has been paid.
Nothing in the preceding subparagraph (e) shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Securities as set forth in
this Exhibit B to the Declaration or to the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.]
6. VOTING RIGHTS. (a) Except as provided under subparagraph 6(b) below
and as otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the Holder of the Common Securities.
If an Event of Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the Holders of a Majority in
liquidation amount of the outstanding Preferred Securities. In no event will the
Holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Regular Trustees, which voting rights are vested exclusively in the
Sponsor as Holder of the Common Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Preferred
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal as
a class and such amendment or proposal shall not be effective except with the
approval of the Holders of Securities representing a Majority in liquidation
amount of such Securities; provided, however, that (A) if any amendment or
proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities and (B) amendments to the Declaration shall
be subject to such further requirements as are set forth in Sections 12.1 and
12.2 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to
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<PAGE> 62
that amendment, modification or termination as directed by, in the case of
clause (1) above, the vote of Holders of Securities representing such specified
percentage of the aggregate liquidation amount of the Securities, or, in the
case of clause (2) above, each Holder of Securities; and provided, further, that
the Property Trustee shall be under no obligation to take any action in
accordance with the directions of the Holders of Securities unless the Property
Trustee shall have received, at the expense of the Sponsor, an opinion of
nationally recognized independent tax counsel recognized as expert in such
matters to the effect that the Trust will not be classified for United States
federal income tax purposes as an association taxable as a corporation or a
partnership on account of such action and will be treated as a grantor trust for
United States federal income tax purposes following such action.
Subject to Section 2.6 of the Declaration, and the provisions of this
and the next succeeding paragraph, the Holders of a Majority in liquidation
amount of the Preferred Securities, voting separately as a class shall have the
right to (A) on behalf of all Holders of Preferred Securities, waive any past
default that is waivable under the Declaration (subject to, and in accordance
with the Declaration) and (B) direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as the holder of the
Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section ____ of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable; provided that
where the taking of any action under the Indenture requires the consent or vote
of (1) holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only take such action if directed by, in the case of
clause (1) above, the vote of Holders of Preferred Securities representing such
specified percentage of the aggregate liquidation amount of the Preferred
Securities, or, in the case of clause (2) above, each Holder of Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall be under no obligation to
take any of the foregoing actions at the direction of the Holders of Preferred
Securities unless the Property Trustee shall have received, at the expense of
the Sponsor, an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will be
treated as a grantor trust for United States federal income tax purposes
following such action. If the Property Trustee fails to enforce its rights under
the Declaration (including, without limitation, its rights, powers and
privileges as a holder of the Debentures under the Indenture), any Holder of
Preferred Securities may, to the extent permitted by law, after a period of 30
days has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly against ADLT to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then the
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<PAGE> 63
registered holder of the Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Holder Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Holder Direct Action, the Sponsor will be subrogated to the
rights of such Holder of Preferred Securities under the Declaration to the
extent of any payment made by the Sponsor to such Holder of Preferred Securities
in such Holder Direct Action. Except as provided in the preceding sentences, the
holders of Preferred Securities will not be able to exercise any other remedy
available to the holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at
the direction of the Holders of the Preferred Securities will constitute a
waiver of the corresponding Event of Default under the Declaration in respect of
the Securities.
Any required approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities of the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or distribute
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by ADLT or by any entity
directly or indirectly controlling or controlled by or under direct or indirect
common control with ADLT shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
Except as provided in this paragraph 6, Holders of the Preferred
Securities will have no rights to increase or decrease the number of Trustees or
to appoint, remove or replace a Trustee, which voting rights are vested solely
in the Holders of the Common Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of
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<PAGE> 64
Common Securities pro rata according to the aggregate liquidation amount of
Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.
8. RANKING. The Preferred Securities rank pari passu and payment
thereon will be made Pro Rata with the Common Securities except that where an
Event of Default occurs and is continuing, the rights of Holders of Preferred
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise rank in priority to the rights of Holders of the Common
Securities.
9. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS. Except as permitted by
Section 3.18 of the Declaration, the Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets to, any corporation or other entity.
10. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions
and payments on redemption of the Preferred Securities will be payable, the
transfer of the Preferred Securities will be registrable, and Preferred
Securities will be exchangeable for Preferred Securities of other denominations
of a like aggregate liquidation amount, at the [principal corporate trust
office] of the Property Trustee in The City of New York; provided that payment
of Distributions may be made at the option of the Regular Trustees on behalf of
the Trust by check mailed to the address of the persons entitled thereto and
that the payment on redemption of any Preferred Security will be made only upon
surrender of such Preferred Security to the Property Trustee.
11. ACCEPTANCE OF INDENTURE AND PREFERRED GUARANTEE. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee, including the subordination provisions therein and (ii)
the Indenture and the Debentures, including the subordination provisions of the
Indenture.
12. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall
have no preemptive rights to subscribe to any additional Preferred Securities or
Common Securities.
13. MISCELLANEOUS. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder without charge on written request to the Trust at its principal
place of business.
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Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
(IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company ("DTC") or a nominee of DTC. This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than DTC or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.)
Number ___________
Preferred Securities ___________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
ADLT Trust I
$_______ Trust Preferred Securities, Series A
(liquidation amount $__ per security)
ADLT Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________ (the "Holder")
is the registered owner of ___________ (______) preferred securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the $________ Trust Preferred Securities, Series A (liquidation
amount $___ per security) (the "Preferred Securities"). The Preferred Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Declaration of Trust of the Trust dated as of
_________, ______, as the same may be amended from time to time (the
"Declaration") including the designation of the terms of Preferred Securities as
set forth in Exhibit B thereto. The Preferred Securities and the Common
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
<PAGE> 66
defined in the Declaration) issued by Advanced Lighting Technologies, Inc., an
Ohio corporation ("ADLT"), to the Trust pursuant to the Indenture referred to in
the Declaration. The Holder is entitled to the benefits of the Guarantee
Agreement of ADLT dated as of ___________, ______ (the "Guarantee") to the
extent provided therein. The Trust will furnish a copy of the Declaration, the
Guarantee and the Indenture to the Holder without charge upon written request to
the Trust at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior and Subordinated Debt (as defined in the Indenture) as and to the
extent provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is subordinate and junior in right of payment to
all other liabilities of ADLT, including the Debentures, and ranks pari passu in
right payment with the most senior preferred stock issued, from time to time, by
ADLT.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
certificate this _________ day of _______.
ADLT TRUST I
By:_________________________, as Trustee
Name:
Title: Trustee
By:_________________________, as Trustee
Name:
Title: Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
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(FORM OF REVERSE OF SECURITY)
Except as otherwise set forth in Annex II to Exhibit B to the
Declaration (which Annex II, if applicable, is attached to and forms part of
this Preferred Security and is incorporated herein by reference), Distributions
on each Preferred Security will be payable at a fixed rate per annum of _____%
of the stated liquidation amount of $__ per Preferred Security, such rate being
the rate of interest payable on the Debentures to be held by the Property
Trustee. Distributions in arrears for more than one quarter will bear interest
thereon at the rate per annum of _____% thereof (to the extent permitted by law)
compounded quarterly. The term "Distributions" as used herein means such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months. If Distributions are payable at a floating rate as specified in Annex
II, the terms set forth in Annex II shall supersede the terms set forth herein
to the extent inconsistent therewith.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from __________, ______ and will be
payable quarterly in arrears, on the last day of each quarter, commencing on
__________, ______, but only if and to the extent that interest payments are
made in respect of the Debentures held by the Property Trustee. So long as ADLT
shall not be in default in the payment of interest on the Debentures, ADLT has
the right under the Indenture for the Debentures to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarters (each an "Extension Period") and,
as a consequence, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the rate of _____% per
annum, compounded quarterly during such Extension Period; provided that no
Extension Period shall last beyond the date of maturity or any redemption date
of the Debentures. Prior to the termination of any such Extension Period, ADLT
may commence a new Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
ADLT may commence a new Extension Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
[The Preferred Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.]
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[CONVERSION REQUEST
To: ___________________________ as Property Trustee of ADLT Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into common stock of Advanced Lighting Technologies, Inc. (the
"Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust, dated as of _________, ______ (as amended from time to
time, the "Declaration"), by _______________ and ____________ as Regular
Trustees, _____________, as Delaware Trustee, ___________________, as Property
Trustee, Advanced Lighting Technologies, Inc., as Sponsor, and by the Holders,
from time to time, of undivided beneficial interests in the assets of the Trust
to be issued pursuant to the Declaration. Pursuant to the aforementioned
exercise of the option to convert these Preferred Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Declaration)
to (i) exchange such Preferred Securities for a portion of the Debentures (as
that term is defined in the Declaration) held by the Trust (at the rate of
exchange specified in the terms of the Preferred Securities set forth as Exhibit
B to the Declaration) and (ii) immediately convert such Debentures on behalf of
the undersigned, into Common Stock (at the conversion rate specified in the
terms of the Trust Preferred Securities set forth as Exhibit B to the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned, please indicate
in the spaces below the name or names in which the shares of Common
Stock are to be issued, along with the address or addresses of such
person or persons
---------------------------------
---------------------------------
---------------------------------
4
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---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
---------------------------------
---------------------------------
---------------------------------
Signature Guarantee:*_________]
* /*/(Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
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Annex II
[Floating Rate Terms, if applicable]
7
<PAGE> 72
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust of ADLT Trust I dated as of ___________, ______ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. Common Securities of the Trust with an
aggregate liquidation amount in the assets of the Trust of
__________________________ Dollars ($___________) and a liquidation amount in
the assets of the Trust of $__ per Common Security, are hereby designated as
"______% Common Trust Securities". The Common Security Certificates evidencing
the Common Securities shall be substantially in the form attached hereto as
Annex I, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice. The Common Securities are to
be issued and sold to Advanced Lighting Technologies, Inc. ("ADLT") in
consideration of $__________ in cash. In connection with the issuance and sale
of the Preferred Securities and the Common Securities, the Trust will purchase
as trust assets Debentures of ADLT having an aggregate principal amount equal to
the aggregate liquidation amount of the Preferred Securities and Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and Common Securities and having
payment and redemption provisions which correspond to the payment and redemption
provisions of the Preferred Securities and Common Securities.
2. (a) DISTRIBUTIONS. (a) Unless floating rate terms are set forth in
Annex II hereto, Distributions on each Common Security will be payable at a
fixed rate per annum of _____% (the "Coupon Rate") of the stated liquidation
amount of $__ per Common Security. Distributions in arrears for more than one
calendar quarter will bear interest at the rate per annum of ______% thereof (to
the extent permitted by applicable law), compounded monthly. The term
"Distributions" as used in these terms means such periodic cash distributions
and any such interest payable unless otherwise stated. A Distribution will be
made by the Property Trustee only to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed for any monthly
Distribution period on the basis of a 360-day year of twelve 30 day months.
(b) Distributions on the Common Securities will be cumulative, will
accrue from _________, ______ and will be payable quarterly in arrears, on the
last day of each month commencing on __________, ______, except as otherwise
described below, but only if and to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. So long as ADLT shall
not be in default in the payment of interest on the Debentures, ADLT has the
right under the Indenture for the Debentures to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarterly interest periods (each, an
"Extension Period") and, as a consequence, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the rate of ______% per annum, compounded quarterly during any such
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Extension Period; provided that no Extension Period shall last beyond the date
of maturity or any redemption date of the Debentures. Prior to the termination
of any such Extension Period, ADLT may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, ADLT may commence a new Extension Period, subject to the above
requirements. Payments of accrued Distributions will be payable to Holders of
Common Securities as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by
the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and records
of the Trust on the relevant record dates which will be one business day prior
to the relevant Distribution date unless the Preferred Securities are no longer
in book-entry only form in which event the Regular Trustees shall have the right
to select relevant record dates which shall be more than one business day prior
to the relevant payment dates. Distributions payable on any Common Securities
that are not punctually paid on any Distribution date as a result of ADLT having
failed to make the corresponding interest payment on the Debentures will
forthwith cease to be payable to the person in whose name such Common Security
is registered on the relevant record date, and such defaulted Distribution will
instead be payable to the person in whose name such Common Security is
registered on the special record date established by the Regular Trustees, which
record date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution payment date
falling within an Extension Period unless ADLT has elected to make a full or
partial payment of interest accrued on the Debentures on such Distribution
payment date. Subject to any applicable laws and regulations and the provisions
of the Declaration, each payment in respect of the Common Securities will be
made as described in paragraph 9 `hereof. If any date on which Distributions are
payable on the Common Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) All Distributions paid with respect to the Common Securities and
the Preferred Securities will be paid Pro Rata to the Holders thereof entitled
thereto. If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities with respect to
Distributions.
(e) [In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock pursuant to the terms
of the Securities as set forth in this Exhibit C to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that if a Security is surrendered for conversion after the close of business on
any regular record date for payment of a Distribution date will be paid in cash
to the person in whose name the Security is registered at the close of business
on such record date, and (other than a Security or a portion of a Security
called for redemption on a redemption date occurring after such record date and
on or prior to such Distribution date) when so surrendered for conversion, the
Security must be
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accompanied by payment of an amount equal to the Distribution payable on such
Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
(g) If, as evidenced by the terms thereof being set forth in Annex II
hereto, Distributions on each Preferred Security will be payable at a floating
rate in accordance with the floating rate terms set forth in Annex II hereto. In
such case, the terms and provisions of Annex II shall supersede any and all
terms hereof to the extent that any such terms of Annex II shall be inconsistent
with the terms as set forth herein.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and Common Securities at the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive Pro Rata solely out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities, after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $__ per Preferred Security and Common Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and Common Securities
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Preferred Securities and Common Securities, shall be
distributed Pro Rata to the Holders of the Preferred Securities and Common
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities and Common Securities shall be paid, subject
to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
4. REDEMPTION AND DISTRIBUTION OF DEBENTURES. The Preferred Securities
and Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or distributed as set
forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
__________, ____, or at any time in certain circumstances upon the occurrence of
a Tax Event, the proceeds of such repayment will be promptly applied to redeem
Pro Rata Preferred Securities and Common Securities having an
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aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price per Preferred and Common Security equal to the
redemption price of the Debentures, together with accrued and unpaid
Distributions thereon through the date of redemption, payable in cash (the
"Redemption Price"). The date of any such repayment or redemption of Preferred
Securities and Common Securities shall be established to coincide with the
repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities to be redeemed
will be redeemed as described in paragraph 4(e)(ii) below. If a partial
redemption would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed, ADLT pursuant to the Indenture will only redeem
Debentures in whole and, as a result, the Trust may only redeem the Common
Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, unless the Debentures are redeemed in
the limited circumstances described below, dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee having
an aggregate principal amount equal to the aggregate stated liquidation amount
of and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Preferred Securities and
Common Securities, to be distributed to the Holders of the Preferred Securities
and Common Securities on a Pro Rata basis in liquidation of such Holders'
interests in the Trust, within 90 days following the occurrence of such Special
Event (the "90 Day Period"); provided, however, that in the case of the
occurrence of a Tax Event, as a condition of such dissolution and distribution,
the Regular Trustees shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on any then applicable published revenue
rulings of the Internal Revenue Service, to the effect that the Holders of the
Preferred Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of the dissolution of the Trust and
distribution of Debentures; and provided, further, that, if and as long as at
the time there is available to the Trust the opportunity to eliminate, within
such 90 Day Period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, ADLT or the Holders of the
Preferred Securities ("Ministerial Action") the Trust will pursue such measure
in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Regular
Trustees have received an opinion (a "Redemption Tax Opinion") of nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that ADLT would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to the
Holders of Preferred Securities and Common Securities in liquidation of such
Holder's interest in the Trust as described in this paragraph 4(c) or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, ADLT shall have the right
at any time, upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures in whole or in part for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event, and
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promptly following such redemption Preferred Securities and Common Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed will be redeemed by the Trust at the Redemption Price
on a Pro Rata basis: provided, however, that, if at the time there is available
to ADLT or the Regular Trustees on behalf of the Trust the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some Ministerial
Action, ADLT or the Holders of the Preferred Securities, ADLT or the Regular
Trustees on behalf of the Trust will pursue such measure in lieu of redemption;
and provided, further, that ADLT shall have no right to redeem the Debentures
while the Regular Trustees on behalf of the Trust are pursuing such Ministerial
Action. The Common Securities will be redeemed Pro Rata with the Preferred
Securities, except that if an Event of Default under the Indenture has occurred
and is continuing, the Preferred Securities will have a priority over the Common
Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after __________,
______ as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, (b)
any amendment to, or change in, an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after ___________, ______, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date thereof, subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
taxes, duties or other governmental charges or (iii) interest payable by ADLT to
the Trust on the Debentures is not, or within 90 days of the date thereof will
not be, deductible by ADLT for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment Company
which is required to be registered under the Investment Company Act, which
Change in 1940 Act Law becomes effective on or after _________, _______.
On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Common Securities will no longer be deemed to be
outstanding and (ii) any certificates representing Common Securities will be
deemed to represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
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accrued and unpaid interest equal to accrued and unpaid Distributions on, such
Common Securities until such certificates are presented to ADLT or its agent for
transfer or reissuance.
(d) The Trust may not redeem any outstanding Common Securities unless
all accrued and unpaid Distributions have been paid on all Common Securities for
all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and Common Securities (a
"Redemption/Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph (e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common Securities
are to be redeemed, the Common Securities to be redeemed will be redeemed Pro
Rata from each Holder of Common Securities (subject to adjustment to eliminate
fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in respect of
a redemption of Common Securities as provided in this paragraph 4 (which notice
will be irrevocable) then immediately prior to the close of business on the
redemption date, provided that ADLT has paid to the Property Trustee in
immediately available funds a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, Distributions will cease to
accrue on the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of such
Common Securities so called for redemption will cease, except the right of the
Holders of such Common Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Common
Securities which have been so called for redemption. If any date fixed for
redemption of Common Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of Common Securities
is improperly withheld or refused and not paid by the Property Trustee,
Distributions on such Common Securities will continue to accrue, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
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(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to the Holders of the Common Securities.
(v) Upon the date of dissolution of the Trust and distribution of
Debentures as a result of the occurrence of a Special Event, Common Security
Certificates shall be deemed to represent beneficial interests in the Debentures
so distributed, and the Common Securities will no longer be deemed outstanding
and may be canceled by the Regular Trustees. The Debentures so distributed shall
have an aggregate principal amount equal to the aggregate liquidation amount of
the Common Securities so distributed.
5. [CONVERSION RIGHTS. The Holders of Securities shall have the right
at any time prior to the close of business on ___________, ____ (or, in the case
of Securities called for redemption, prior to the close of business on the
Business Day prior to the redemption date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Common Stock in the manner described herein on and subject to the
following terms and conditions.
The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $__ principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock at
an initial rate of ________ shares of Common Stock per $__ principal amount of
Debentures (which is equivalent to a conversion price of $_____ per share of
Common Stock, subject to certain adjustments set forth in Sections 5.03 and 5.04
of the Supplemental Indenture (as so adjusted, "Conversion Price")).
(a) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Property Trustee of the Holder's election to
exchange Securities for a portion of the Debentures held by the Trust and the
Property Trustee shall, upon receipt of such notice, deliver to the Conversion
Agent the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Property
Trustee of the Holder's election to convert such Debentures into shares of
Common Stock. If a Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Security is
registered at the close of business on such record date, and (other than a
Security or a portion of a Security called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Security must be accompanied by
payment of an amount
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equal to the Distribution payable on such Distribution payment date. Except as
provided above, neither the Trust nor the Sponsor will make, or be required to
make, any payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accumulated on the Securities surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion. Securities shall be deemed
to have been converted immediately prior to the close of business on the day on
which a Conversion Request relating to such Securities is received by the Trust
in accordance with the foregoing provision (the "Conversion Date"). The Person
or Persons entitled to receive Common Stock issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after the
Conversion Date, the Sponsor shall issue and deliver at the office of the
Conversion Agent a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Persons entitled to
receive the same, unless otherwise directed by the Holder in the Conversion
Request and the Conversion Agent shall distribute such certificate or
certificates, together with the applicable cash payment, if any, to such Person
or Persons.
(b) Each Holder of a Security by his acceptance thereof appoints
____________ "Conversion Agent" for the purpose of effecting the conversion of
Securities in accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent shall be acting as
agent of the Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust in connection with
the conversion of such Securities in accordance with this section and (ii) to
convert all or a portion of the Debentures into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions of this
section and to deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Company to the Conversion Agent, which in turn will make such payment to
the Holder or Holders of Securities so converted.
(d) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, shall be entitled to deliver upon conversion of Debentures, shares of
Common Stock reacquired and held in the treasury of the Sponsor (in lieu of the
issuance of authorized and unissued shares of Common Stock), so long as any such
treasury shares are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received upon
conversion of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. Each of the Sponsor and the Trust shall prepare and shall use
its best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply with
all applicable requirements as to registration or qualification of Common Stock
(and all requirements to list
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Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the company to lawfully issue Common Stock to
the Trust upon conversion of the Debentures and the Trust to lawfully deliver
Common Stock to each Holder upon conversion of the Securities.
(e) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. The Sponsor shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the Trust the
amount of any such tax, or has established to the satisfaction of the Trust that
such tax has been paid.
(f) Nothing in the preceding Paragraph (e) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Securities or set
forth in this Exhibit C to the Declaration or to the Declaration itself or
otherwise require the Property Trustee or the Trust to pay any amounts on
account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the Holder of the Common Securities.
If an Event of Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the Holders of a Majority in
liquidation amount of the outstanding Preferred Securities. In no event will the
Holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Regular Trustees, which voting rights are vested exclusively in the
Sponsor as Holder of the Common Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Common
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal as
a class and such amendment or proposal shall not be effective except with the
approval of the Holders of Securities representing a Majority in liquidation
amount of such Securities; provided, however, that (A) if any amendment or
proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities, (B) the rights 4.2 of the Declaration to
increase or decrease the number of, and
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to appoint, replace or remove, Trustees shall not be amended without the consent
of each Holder of Common Securities, and (C) amendments to the Declaration shall
be subject to such further 12.1 and 12.2 of the Declaration.
In the event the consent of the Property Trustee as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of the Securities unless the Property Trustee shall have received, at
the expense of the Sponsor, an opinion of nationally recognized independent tax
counsel recognized as an expert in such matters to the effect that the Trust
will not be classified for United States federal income tax purposes as an
association taxable as a corporation or a partnership on account of such action
and will be treated as a grantor trust for United States federal income tax
purposes following such action.
Subject to Section 2.6 of the Declaration, and the provisions of this
and the next succeeding paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class shall have the
right to (A) on behalf of all Holders of Common Securities, waive any past
default that is waivable under the Declaration (subject to, and in accordance
with the Declaration) and (B) direct the time, method, and place of conducting
any proceeding for any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as holder of the Debentures,
to (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section ____ of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable; provided that
where the taking of any action under the Indenture requires the consent or vote
of (1) holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (e) each holder of Debentures,
the Property Trustee may only take such action if directed by, in the case of
clause (1) above, the vote of Holders of Common Securities representing such
specified percentage of the aggregate liquidation amount of the Common
Securities, or, in the case of clause (2) above, each Holder of Common
Securities. Pursuant to this paragraph, the Property Trustee shall not revoke,
or take any action inconsistent with, any action previously authorized or
approved by a vote of the Holders of the Preferred Securities, and shall not
take any action in accordance with the direction of the Holders of the Common
Securities under this paragraph if the action is prejudicial to the Holders of
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to
10
<PAGE> 82
the Property Trustee or the Debenture Trustee as set forth above,the Property
Trustee shall be under no obligation to take any of the foregoing actions at the
direction of the Holders of Common Securities unless the Properties Trustee
shall have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as expert in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as an association taxable as a corporation or a partnership on
account of such action and will be treated as a grantor trust for United States
income tax purposes following such action.
Notwithstanding any other provision of these terms, each Holder of
Common Securities will be deemed to have waived any Event of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Declaration or of the Securities. In the event
that any Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in the Declaration, the Holders
of Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under the Declaration without any further act, vote or consent of the Holders of
the Common Securities.
A waiver of an Indenture Event of Default by the Property Trustee at
the direction of the Holders of the Preferred Securities will constitute a
waiver of the corresponding Event of Default under the Declaration in respect of
the Securities.
Any required approval of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities of the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of Common Securities will be required
for the Trust to redeem and cancel Common Securities in accordance with the
Declaration.
7. PRO RATA TREATMENT. A reference in these terms of the Common
Securities to any payment, distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only
11
<PAGE> 83
after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Common Securities rank pari passu and payment thereon
will be made Pro Rata with the Preferred Securities except that where an Event
of Default occurs and is continuing, the rights of Holders of Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise are subordinate to the rights of Holders of the Preferred
Securities.
9. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS. Except as permitted by
Section 3.18 of the Declaration, the Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets to, any corporation or other body.
10. TRANSFERS, EXCHANGES, METHOD OF PAYMENTS. Payment of Distributions
and payments on redemption of the Common Securities will be payable, the
transfer of the Common Securities will be registrable, and Common Securities
will be exchangeable for Common Securities of other denominations of a like
aggregate liquidation amount, at the principal corporate trust office of the
Property Trustee in The City of New York; provided that payment of Distributions
may be made at the option of the Regular Trustees on behalf of the Trust by
check mailed to the address of the persons entitled thereto and that the payment
on redemption of any Common Security will be made only upon surrender of such
Common Security to the Property Trustee. Notwithstanding the foregoing,
transfers of Common Securities are subject to conditions set forth in Section
9.01 of the Declaration.
11. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of the Indenture and the
Debentures, including the subordination provisions thereof.
12. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have
no preemptive rights to subscribe to any additional Common Securities or
Preferred Securities.
13. MISCELLANEOUS. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder without charge on written request to the Trust at its principal
place of business.
12
<PAGE> 84
Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
_________ _________
Certificate Evidencing Common Securities of ADLT Trust I
[_____%] [Floating Rate] Common Trust Securities
(liquidation amount $__ per Common Security)
ADLT Trust I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that Advanced Lighting
Technologies, Inc. (the "Holder") is the registered owner of
____________________________ (_________) common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the "[_____%] [Floating Rate] Common Trust Securities" (liquidation
amount $__ per security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer and satisfaction of the other conditions set forth in
the Declaration (as defined below) including, without limitation Section 9.1
thereof. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of _________, ______, as the same may
be amended from time to time (the "Declaration") including the designation of
the terms of Common Securities as set forth in Exhibit C thereto. The Common
Securities and the Preferred Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by Advanced
Lighting Technologies, Inc., a Delaware corporation, to the Trust pursuant to
the Indenture referred to in the Declaration. The Trust will furnish a copy of
the Declaration and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Debt (as defined in the Indenture) as and to the extent provided in
the Indenture.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
certificate this ______ day of ______,______
13
<PAGE> 85
ADLT TRUST I
By________________________, as Trustee
Name:
Title: Trustee
By_________________________, as Trustee
Name:
Title: Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
14
<PAGE> 86
(FORM OF REVERSE OF SECURITY)
Except as otherwise set forth in Annex II to Exhibit C to the
Declaration (which Annex II, if applicable, is attached to and forms part of
this Common Security and is incorporated herein by reference), Distributions on
each Common Security will be payable at a fixed rate per annum of _____% (the
"Coupon Rate") of the stated liquidation amount of $__ per Common Security, such
rate being the rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions in arrears for more than one quarter will bear
interest thereon at the rate per annum of ______% thereof (to the extent
permitted by law) compounded monthly. The term "Distributions" as used herein
means such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months. If Distributions are payable at a floating rate as
specified in Annex II, the terms set forth in Annex II shall supersede the terms
set forth herein to the extent inconsistent therewith.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from __________, ______ and will be
payable quarterly in arrears, on the last day of each quarter, commencing on
________, ______, but only if and to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. So long as ADLT shall
not be in default in the payment of interest on the Debentures, ADLT has the
right under the Indenture for the Debentures to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarters (each an "Extension Period") and,
as a consequence, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the rate of _____% per
annum, compounded quarterly during such Extension Period; provided that no
Extension Period shall last beyond the date of maturity or any redemption date
of the Debentures. Prior to the termination of any such Extension Period, ADLT
may commence a new Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
ADLT may commence a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
[The Common Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.]
15
<PAGE> 87
[CONVERSION REQUEST
To: ___________________________________
as Property Trustee of ADLT Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Advanced Lighting Technologies, Inc. (the
"Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust dated as of _________, ______ (as amended from time to
time, the "Declaration"), by ____________________ and ________________, as
Regular Trustees, __________________, as Delaware Trustee, __________________,
as Property Trustee, Advanced Lighting Technologies, Inc., as Sponsor, and by
the Holders, from time to time, of undivided beneficial interests in the assets
of the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Common Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Common Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Common Securities set forth
as Exhibit C to the Declaration) and (ii) immediately convert such Debentures on
behalf of the undersigned, into Common Stock (at the conversion rate specified
in the terms of the Common Securities set forth as Exhibit C to the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _____________, _____
in whole ___ in part ___
Number of Common Securities
to be converted:
---------------------------
If a name or names other
than the undersigned,
please indicate in the
spaces below the name or
names in which the shares
of Common Stock are to be
issued, along with the
address or addresses of
such person or persons
---------------------------
---------------------------
---------------------------
16
<PAGE> 88
---------------------------
---------------------------
---------------------------
---------------------------
Signature (for conversion
only)
Please Print or Typewrite
Name and Address, Including
Zip Code, and Social
Security or Other
Identifying Number
---------------------------
---------------------------
---------------------------
Signature
Guarantee:/*/___________]
- ----------------------
/*/(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
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<PAGE> 89
Annex II
[Floating Rate Terms, if applicable]
18
<PAGE> 1
Exhibit 4.12
ADLT TRUST I
----------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
----------------
Dated as of , ______
<PAGE> 2
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INTERPRETATION
<TABLE>
<S> <C> <C>
Section 1.01 Definitions and Interpretation................................................. 1
ARTICLE 2
TRUST INDENTURE ACT
Section 2.01 Trust Indenture Act; Application............................................... 4
Section 2.02. Lists of Holders of Securities................................................. 4
Section 2.03 Reports by the Preferred Guarantee Trustee..................................... 5
Section 2.04 Periodic Reports to Preferred Guarantee Trustee................................ 5
Section 2.05 Evidence of Compliance with Conditions Precedent............................... 5
Section 2.06 Events of Default; Waiver...................................................... 5
Section 2.07 Event of Default; Notice....................................................... 6
Section 2.08 Conflicting Interests.......................................................... 6
ARTICLE 3
POWERS, DUTIES AND RIGHTS
OF PREFERRED GUARANTEE TRUSTEE
Section 3.01 Powers and Duties of the Preferred Guarantee Trustee........................... 6
Section 3.02 Certain Rights of Preferred Guarantee Trustee.................................. 8
Section 3.03 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee..... 10
ARTICLE 4
PREFERRED GUARANTEE TRUSTEE
Section 4.01 Preferred Guarantee Trustee; Eligibility....................................... 10
Section 4.02 Appointment, Removal and Resignation of Preferred Guarantee Trustee............ 11
ARTICLE 5
GUARANTEE
Section 5.01 Guarantee...................................................................... 12
Section 5.02 Waiver of Notice and Demand.................................................... 12
Section 5.03 Obligations Not Affected....................................................... 12
Section 5.04 Rights of Holders.............................................................. 13
Section 5.05 Guarantee of Payment........................................................... 13
Section 5.06 Subrogation.................................................................... 13
Section 5.07 Independent Obligations........................................................ 14
</TABLE>
<PAGE> 3
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
<TABLE>
<S> <C> <C>
Section 6.01 Limitation of Transactions..................................................... 14
Section 6.02 Ranking........................................................................ 15
ARTICLE 7
TERMINATION
Section 7.01 Termination.................................................................... 15
ARTICLE 8
INDEMNIFICATION
Section 8.01 Exculpation.................................................................... 15
Section 8.02 Indemnification................................................................ 16
ARTICLE 9
MISCELLANEOUS
Section 9.01 Successors and Assigns......................................................... 16
Section 9.02 Amendments..................................................................... 17
Section 9.03 Notices........................................................................ 17
Section 9.04 Benefit........................................................................ 18
Section 9.05 Governing Law.................................................................. 18
</TABLE>
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of , is executed and delivered by Advanced Lighting Technologies, Inc., an
Ohio corporation (the "Guarantor"), and , as trustee (the "Preferred Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of ADLT Trust I, a Delaware
statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of , among the trustees of the Trust named therein, the
Guarantor, as sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Trust, the Trust is issuing on the date hereof
Preferred Securities having an aggregate liquidation amount of $ , designated
the Trust Preferred Securities, Series A (the "Preferred Securities").
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") on
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE 1. DEFINITIONS AND INTERPRETATION
SECTION 1.01. DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings as signed to them
in this Section 1.01;
(b) terms defined in the Declaration as at the date of execution of
this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee
<PAGE> 5
unless otherwise defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person; provided, however, that the Authorized Officer signing an
Officers' Certificate given pursuant to Section 314(a)(4) of the Trust Indenture
Act shall be the principal executive, financial or accounting officer of such
Person.
"Base Indenture" means the indenture dated as of_________________,
between the Guarantor (the "Debenture Issuer") and____________________, as
trustee.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at .
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means (i) the failure of the Guarantor to perform
any of its payment or other obligations under this Preferred Securities
Guarantee [or (ii) the failure of the Guarantor to deliver Common Stock upon an
appropriate election by any Holder of Preferred Securities to convert such
Preferred Securities into shares of Common Stock].
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Trust: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Trust shall have funds available therefor, (ii) the redemption
price (the "Redemption Price"), and all accrued and unpaid Distributions to the
date of redemption to the extent the Trust has funds available therefor, with
respect to any Preferred Securities called for redemption by the Trust, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Trust (other than in
2
<PAGE> 6
connection with the [conversion of all of the Trust Securities into the
Guarantor's common stock or the] distribution of Debentures to the Holders in
exchange for Preferred Securities as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Trust shall have funds available therefor, and (b) the amount of assets of
the Trust remaining available for distribution to Holders in liquidation of the
Trust (in either case, the "Liquidation Distribution"). If an event of default
under the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Trust of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Base Indenture, as supplemented by the
supplemental indenture dated as of _____________________, between the Debenture
Issuer and ______________________, as trustee, as the same may be further
amended and supplemented from time to time in accordance with its terms.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or, except as provided by the
Trust Indenture Act, a vote by Holder(s) of Preferred Securities, voting
separately as a class, of more than 50% of the liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Preferred Securities.
"Officers' Certificate" means with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation
3
<PAGE> 7
as, in such officer's opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Preferred Guarantee Trustee" means _______________________, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE 2. TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.02. LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within 14 days after each record date for payment
of Distributions, as of such record date, and (ii) at any other time within 30
days of receipt by the Guarantor of a written request for a List of Holders as
of a date no more than 14 days before such List of Holders is given to the
Preferred
4
<PAGE> 8
Guarantee Trustee provided, that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Preferred Guarantee Trustee by the
Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
Within 60 days after of each year, the Preferred Guarantee Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
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SECTION 2.07. EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.08. CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3. POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.04(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
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(c) The Preferred Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction
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of the Holders of not less than a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee, or exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Preferred Securities Guarantee;
and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if
the Preferred Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Preferred Securities
Guarantee or indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.02. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by
an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or
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opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Preferred
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Preferred Securities Guarantee
from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the authority
of the Preferred Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
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(xi) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(xii) The Preferred Securities Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Preferred Securities
Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed
to impose any duty or obligation on the Preferred Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED
SECURITIES GUARANTEE.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE 4. PREFERRED GUARANTEE TRUSTEE
SECTION 4.01. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation or national banking association
organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of
Columbia, or a corporation, national banking association or other
Person permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.01(a)(ii), the
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combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED
GUARANTEE TRUSTEE.
(a) Subject to Section 4.02(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.02,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such
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termination, removal or resignation.
ARTICLE 5. GUARANTEE
SECTION 5.01. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Trust), as and when due, regardless of any defense, right of set-off
or counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
SECTION 5.02. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.03. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
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(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Trust or any other
person or entity before proceeding directly against the Guarantor.
SECTION 5.05. GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.06. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Trust in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or
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exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6. LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration,
then (a) the Guarantor shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (A)
(i) purchases or acquisitions of shares of the Guarantor's capital stock (or
capital stock equivalents) in connection with the satisfaction by the Guarantor
of its obligations under any officer's, directors or employee benefit plans (or
any options or other instruments issued thereunder) or the satisfaction by the
Guarantor of its obligations pursuant to any contract or security requiring the
Guarantor to purchase shares of the Guarantor's capital stock (or capital stock
equivalents), (ii) purchases of shares of the Guarantor's capital stock (or
capital stock equivalents) from officers, directors or employees of the
Guarantor or its subsidiaries pursuant to employment agreements or upon
termination of employment or retirement, (iii) as a result of a
reclassification, combination or subdivision of the Guarantor's capital stock or
the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (iv)
dividends or distributions of shares of common stock on common stock, (v) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or any
security being converted or exchanged into such capital stock, (vi) purchases or
other acquisitions of common stock in connection with a dividend reinvestment or
other similar plan, or (vii) any dividend or distribution of capital stock (or
capital stock equivalents) in connection with the implementation of stockholders
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, or (B) guarantee
payments made with respect to any of the foregoing), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Debentures and (c) the Guarantor shall not make any
guarantee payments with respect to the foregoing (other than pursuant to
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the Guarantee or the Guarantor's guarantee of the Common Securities).
SECTION 6.02. RANKING.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior Preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any Preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE 7. TERMINATION
SECTION 7.01. TERMINATION.
This Preferred Securities Guarantee shall terminate (i) upon full
payment of the Redemption Price of all Preferred Securities, (ii) [upon the
distribution of the Guarantor's common stock to all of the Holders in respect of
the conversion of the Preferred Securities into the Guarantor's common stock or]
upon the distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Trust. Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
ARTICLE 8. INDEMNIFICATION
SECTION 8.01. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other
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facts pertinent to the existence and amount of assets from which Distributions
to Holders of Preferred Securities might properly be paid.
SECTION 8.02. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of this Preferred Securities Guarantee.
ARTICLE 9. MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity permitted
by Section 8.1 of the Base Indenture or any sale, transfer or lease of the
Guarantor's assets to another entity permitted by Section 8.1 of the Base
Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Preferred Securities Guarantee without the prior approval of the
holders of at least a Majority in liquidation amount of the Preferred Securities
then outstanding. Upon any consolidation by the Guarantor with or merger of the
Guarantor into any other Person or any conveyance, transfer or lease of the
properties and assets of the Guarantor substantially as an entirety to any
person in accordance with Section 8.1 of the Base Indenture, the successor
Person formed by such consolidation or into which Guarantor is merged or to
which such conveyance, transfer or lease is made shall succeed to, be
substituted for, and may exercise every right and power of, the Guarantor under
this Preferred Securities Guarantee with the same effect as if such successor
Person had been named as the Guarantor herein; and thereafter, except in the
case of a lease, the predecessor Person shall be released from all obligations
and covenants under this Preferred Securities Guarantee.
SECTION 9.02. AMENDMENTS.
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may be amended only with the
prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions
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of Section 12.2 of the Declaration with respect to meetings of Holders of the
Securities apply to the giving of such approval. For the purposes of this
Preferred Securities Guarantee, any change which only eliminates or limits any
of the dividends, distributions, redemptions, purchases, acquisitions or
liquidation payments which the Guarantor is permitted to make pursuant to
subclauses (A) or (B) of clause (a) of Section 6.01 shall be deemed to not
materially adversely affect the rights of Holders.
SECTION 9.03. NOTICES.
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities:
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Advanced Lighting Technologies, Inc.
32000 Aurora Road
Solon, Ohio 44139
Attn: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.04. BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.01(a), is not
separately transferable from the Preferred Securities.
17
<PAGE> 21
SECTION 9.05. GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
ADVANCED LIGHTING TECHNOLOGIES, INC.,
as Guarantor
By:__________________________________________
Name:
Title:
as Preferred Guarantee Trustee
By:__________________________________________
Name:
Title:
18
<PAGE> 1
Exhibit 5.3
[Potter Anderson & Corroon LLP]
August 5, 1998
To Each of the Persons Listed
on Schedule I Attached Hereto
Re: ADLT Trust I
Trust Preferred Securities
--------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for ADLT Trust, I, a
Delaware business trust (the "Trust") in connection with the proposed issuance
of its Trust Preferred Securities, Series A (the "Preferred Securities") and the
proposed issuance of its Common Securities (the "Common Securities") pursuant to
an Amended and Restated Declaration of Trust (the "Declaration"), to be entered
into by and among Advanced Lighting Technologies, Inc., as Sponsor, the Property
Trustee to be named therein, the successor Delaware Trustee to be named therein,
and the Regular Trustees to be named therein. Initially capitalized terms used
herein and not otherwise defined are used herein as defined in the Declaration.
For purposes of giving the opinions hereinafter set forth, we
have examined only the following documents and have conducted no independent
factual investigations of our own:
1. The Certificate of Trust for the Trust, dated as of June 1,
1998 (the "Original Certificate"), as filed in the Office of the Secretary of
State of the State of Delaware (the "Secretary of State") on June 1, 1998;
2. The form of Restated Certificate of Trust for the Trust
(the "Restated Certificate"), to be filed with the Secretary of State
simultaneously with the execution by the parties thereto of the Declaration;
<PAGE> 2
To each of the persons on
Schedule I attached hereto
August 5, 1998
Page 2
3. The initial declaration of trust of the Trust, dated as of
June 1, 1998, by and between Advanced Lighting Technologies, Inc., as Sponsor
and Mark Ferrucci, as Delaware Trustee (the "Original Declaration");
4. The registration statement on Form S-3 initially filed with
the Securities and Exchange Commission on July 7, 1998, pursuant to the
Securities Act of 1933, as amended, covering, among other securities, the
Preferred Securities, (the "Registration Statement");
5. The Declaration; and
6. A Certificate of Good Standing for the Trust, dated August
5, 1998, obtained from the Secretary of State of the State of Delaware.
The documents referred to in (3) and (5), are collectively
referred to as the "Agreements" and individually as an "Agreement."
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in (1) through (6) above. In
particular, we have not reviewed any document (other than the documents listed
in (1) and (6) above) that is referred to or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein.
As to certain facts material to the opinions expressed herein,
we have relied upon the representations and warranties contained in the
documents examined by us.
Based upon the foregoing, and upon an examination of such
questions of law of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act.
2. When (a) appropriate action has been taken to duly
authorize the issuance and fix the terms of the Preferred Securities and the
Common Securities under the Declaration, (b) Trustees are selected, including a
successor Delaware Trustee meeting the requirements of Section 5.1(a)(iii) of
the Declaration, (c) the Restated Certificate has been filed
<PAGE> 3
To each of the persons on
Schedule I attached hereto
August 5, 1998
Page 3
with the Secretary of State and has been accepted thereby for filing as part of
the public records thereof, and (d) the Declaration has been duly authorized,
executed and delivered by the Sponsor and the Trustees, respectively, the
Declaration will constitute a valid and binding obligation of ADLT and the
Trustees, respectively, enforceable against ADLT and the Trustees, respectively,
in accordance with its terms.
3. When and if (a) the issuance of the Preferred Securities
and the Common Securities, respectively, has been duly authorized, (b) the terms
of the Preferred Securities and the Common Securities, respectively, have been
duly fixed, (c) the Restated Certificate has been filed with the Secretary of
State and has been accepted thereby for filing in accordance with paragraph 2
above, and (d) the Declaration has been duly authorized, executed and delivered
in accordance with paragraph 2 above, subject to the other qualifications set
forth herein (including, without limitation, paragraph 4 below), the Preferred
Securities will have been duly authorized and when the Preferred Securities with
the terms so fixed shall have been duly executed and authenticated under the
Declaration, and otherwise issued and sold in accordance with the Declaration
and the Registration Statement, and in a manner consistent therewith, such
Preferred Securities will be validly issued, fully paid, and non-assessable
undivided beneficial interests in the assets of the Trust.
4. When and if the actions referred to in paragraphs 2 and 3
have occurred, the Holders of Preferred Securities as beneficial owners of
Preferred Securities of the Trust will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware, except
that such Holders of Preferred Securities may be obligated to provide (a)
indemnity or security in connection with, and pay taxes or governmental charges
arising from, transfers or exchanges of Preferred Securities Certificates and
the issuance of replacement Preferred Securities Certificates, and (b) security
and indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Declaration.
All of the foregoing opinions contained herein are subject to
the following assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws,
rules, regulations and orders of the State of Delaware presently in effect,
excluding the securities laws thereof. We have not considered and express no
opinion on the laws of any other jurisdiction, including, without limitation,
federal laws and rules and regulations relating thereto.
b. The foregoing opinions in paragraph 2 are subject
to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
fraudulent transfer and
<PAGE> 4
To each of the persons on
Schedule I attached hereto
August 5, 1998
Page 4
similar laws relating to or affecting creditors rights generally including,
without limitation, the Delaware Uniform Fraudulent Conveyance Act, the
provisions of the United States Bankruptcy Code and the Delaware insolvency
statutes, (ii) principles of equity including, without limitation, concepts of
materiality, good faith, fair dealing, conscionability and reasonableness
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), (iii) applicable law relating to fiduciary duties, (iv)
public policy limitations with respect to exculpation, contribution and
indemnity provisions, and (v) the qualification that provisions requiring the
payment of attorneys' fees are enforceable only to the extent such fees are
reasonable and less than an amount equal to twenty percent of the amount
adjudged owing for principal and interest.
c. We have assumed the due execution and delivery by
each party listed as a party to each document examined by us. We have assumed
further the due authorization by each party thereto of each document examined by
us, and that each of such parties (exclusive of the Regular Trustees) has the
full corporate, or trust or banking, power, authority, and legal right to
execute, deliver and perform each such document. We also have assumed that each
of the parties to each of the Agreements (exclusive of the Regular Trustees) is
a corporation, bank, national banking association or trust company, validly
existing and in good standing under the laws of their respective jurisdictions
of organization and that the Agreements to which they are a party do not result
in the breach of the terms of, and do not contravene their respective
constituent documents, any contractual restriction binding on them or any law,
rule or regulation applicable to them. In addition, we have assumed the legal
capacity of any natural persons who are parties to any of the documents examined
by us.
d. We have assumed that all signatures on documents
examined by us are genuine, that all documents submitted to us as originals are
authentic and that all documents submitted to us as copies conform with the
originals.
e. We have assumed that the Original Declaration and
once executed and delivered, the Declaration, collectively, as applicable
constitute the entire agreement among each of the respective parties thereto
with respect to the subject matter thereof, including with respect to the
creation, operation, dissolution and winding up of the Trust.
f. Notwithstanding any provision in the Declaration
to the contrary, we note that upon the occurrence of an event set forth in
Article VIII thereof that causes the dissolution of the Trust, the Trust cannot
make any payments or distributions to the Holders of Securities until creditors'
claims are either paid in full or reasonable provision for payment
<PAGE> 5
To each of the persons on
Schedule I attached hereto
August 5, 1998
Page 5
thereof has been made.
g. We have assumed that no event set forth in Article
VIII of the Declaration has occurred to the same extent as if the Declaration
were in effect on the date hereof.
h. With respect to the enforceability of any
provision of the Declaration wherein the parties provide for the appointment of
a liquidator, we note that upon the application of any beneficial owner, the
Delaware Court of Chancery has the power, upon cause shown, to wind up the
affairs of a Delaware business trust and in connection therewith to appoint a
liquidating trustee other than the one agreed to by the beneficial owners
thereof.
i. We note that we do not assume responsibility for
the contents of the Registration Statement.
This opinion is rendered solely for your benefit in connection
with the matters set forth herein and, without our prior written consent, may
not be furnished to, or quoted or relied upon by, any other person or entity for
any purpose. Cowden, Humphrey & Sarlson Co., L.P.A. may rely on this opinion in
connection with the opinions it is delivering on the date hereof with respect to
the matters set forth herein.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In giving
the foregoing consents, we do not thereby admit that we come within the category
of Persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Potter Anderson & Corroon LLP
<PAGE> 6
Schedule I
ADLT Trust I
Advanced Lighting Technologies, Inc.
