UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6 )*
Inamed Corporation
(Name of Issuer)
Common Stock
(Title of Class of Securities)
453235103
(CUSIP Number)
Jonathan Green, Esq.
Appaloosa Management L.P.
51 John F. Kennedy Parkway
Short Hills, New Jersey
07078
(201) 376-5400<PAGE>
Robert C. Schwenkel, Esq.
Fried, Frank, Harris,
Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8000<PAGE>
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 8, 1997
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13d-1 (b)(3) or (4), check the following box .
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter
disclosure provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act
(however, see the Notes).
Exhibit Index: Page 10
Page 1 of 14 Pages<PAGE>
SCHEDULE 13D
CUSIP No. 453235103 Page 2 of 14 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Appaloosa Management L.P.
2 Check the Appropriate Box If a Member of a Group*
a.
b. X
3 SEC Use Only
4 Source of Funds*
N/A
5 Check Box If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of4,126,779
Shares
Beneficially 8 Shared Voting Power
Owned By-0-
Each
Reporting 9 Sole Dispositive Power
Person4,126,779
With
10 Shared Dispositive Power
-0-
11 Aggregate Amount Beneficially Owned by Each Reporting
Person
4,126,779
12 Check Box If the Aggregate Amount in Row (11) Excludes
Certain Shares*
13 Percent of Class Represented By Amount in Row (11)
35.16%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!<PAGE>
SCHEDULE 13D
CUSIP No. 453235103 Page 3 of 14 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
David A. Tepper
2 Check the Appropriate Box If a Member of a Group*
a.
b. X
3 SEC Use Only
4 Source of Funds*
N/A
5 Check Box If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of4,126,779
Shares
Beneficially 8 Shared Voting Power
Owned By-0-
Each
Reporting 9 Sole Dispositive Power
Person4,126,779
With
10 Shared Dispositive Power
-0-
11 Aggregate Amount Beneficially Owned by Each Reporting
Person
4,126,779
12 Check Box If the Aggregate Amount in Row (11) Excludes
Certain Shares*
13 Percent of Class Represented By Amount in Row (11)
35.16%
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
This Amendment No. 6 to the statement on Schedule 13D
filed on behalf of Appaloosa Management L.P. (the "Manager")
and David A. Tepper ("Mr. Tepper" and together with the
Manager, collectively, the "Reporting Persons") on August 26,
1996, as amended by Amendment No. 1 filed on September 26,
1996, Amendment No. 2 filed on January 28, 1997, Amendment No.
3 filed on April 7, 1997, Amendment No. 4 filed on May 13,
1997 and Amendment No. 5 filed on June 12, 1997 (the "Schedule
13D"), relates to the common stock of INAMED Corporation (the
"Company"). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the
Schedule 13D. The Schedule 13D is hereby amended and
supplemented as follows:
Item 5.Interest in Securities of the Issuer
As previously reported in the Schedule 13D and Amendment
No. 5 thereto, (i) the Partnership, Palomino and Ferd
purchased $10,032,700, $8,163,100 and $2,304,200 principal
amount of the 11% Secured Convertible Notes due 1999 of the
Company, respectively (or $20,500,000 principal amount of the
Notes in the aggregate), and (ii) the Partnership, Palomino,
Ferd and Reliance held 484,019, 257,188, 6,744 and 86,849
Shares, respectively (or 834,800 Shares in the aggregate).
Giving effect to the Second Supplemental Indenture to
the Indenture, dated as of July 2, 1997 (the "Second
Supplemental Indenture") (Exhibit A hereto and incorporated by
reference herein) and the other transactions contemplated
thereby, including the partial redemption of the Notes
contemplated in the Consent and Waiver (as defined below)and
Section 9.2 of the Indenture, the Partnership, Palomino and
Ferd may be deemed to hold $5,732,971, $4,664,629 and
$1,316,686 principal amount of the Notes, respectively (or
$11,714,286 principal amount of the Notes in the aggregate).
Based upon the potential conversion of the Notes at a
conversion price of $5.50 a Share at a conversion rate of 103%
of the principal amount of the Notes, the Partnership,
Palomino and Ferd may be deemed to have beneficial ownership
(as a result of their ownership of the Notes) of 1,073,629,
873,557 and 246,579 Shares, respectively (or 2,193,765 Shares
in the aggregate). In connection with the foregoing
transactions, the Partnership, Palomino and Ferd were issued
Warrants representing the right to purchase 537,466, 437,309
and 123,439 Shares, respectively (or 1,098,214 Shares in the
aggregate).
Accordingly, as of the date hereof, the Partnership,
Palomino, Ferd and Reliance may be deemed to have beneficial
ownership of 2,095,114, 1,568,054, 376,762 and 86,849 Shares,
respectively (or 4,126,779 Shares in the aggregate).
(a) This statement on Schedule 13D relates to 4,126,779
Shares which may be deemed to be beneficially owned by
the Reporting Persons and which constitute approximately
35.16% of the issued and outstanding Shares.
(b) The Manager may be deemed to have sole voting and
dispositive power with respect to 4,126,779 Shares. Mr.
Tepper may be deemed to have sole voting and dispositive
power with respect to 4,126,779 Shares.
(c) Not applicable.
(d) Not applicable.
(e)Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer
The Company, the Purchasers and certain other holders of
the Notes have agreed to certain modifications to the terms of
the Notes and the Warrants as described below and in the
Second Supplemental Indenture. In addition, the Company
agreed (i) to return $14,768,571 in escrowed funds held
pursuant to the Escrow Agreements to the Purchasers and the
other Holders of the Notes (collectively, the "Holders") in a
partial redemption of the Notes pro rata based upon the
respective principal amounts of the Notes owned by the
Purchasers and the other Holders and (ii) to issue to the
Purchasers and the other Holders warrants to purchase
1,846,071 Shares (the "Warrants") pro rata based upon the
respective principal amounts of the Notes owned by the
Purchasers and the other Holders on the date of issuance of
the Warrants.
Pursuant to the Warrant Agreement, dated as of July 2,
1997, between the Company and the U.S. Stock Transfer
Corporation (the "Warrant Agreement") (Exhibit B hereto and
incorporated by reference herein), the Warrants will be
exercisable, at any time, in whole or in part, by the holders
thereof after August 15, 1997, and prior to March 31, 2000 at
an exercise price of $8.00 per Share. The Purchasers received
Warrants that will represent, in the aggregate, the right to
purchase 1,098,214 Shares. Under certain circumstances, the
Company will have the right to repurchase any outstanding
Warrants at a repurchase price of $.01 per warrant. The
Company has further agreed (i) to use its best efforts to
register with the Securities and Exchange Commission on an
appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), on or before July 31, 1997 (or cause
an appropriate post-effective amendment to be made to an
existing registered registration statement on or prior to such
date), and use its best efforts to become effective on or
before October 31, 1997, a registration statement with respect
to the Warrants and the aggregate amount of Shares to be
issued upon exercise of the Warrants and (ii) to keep such
registration statement effective for a period of time required
for disposition of such Warrants or Shares by the Holders. In
the event such registration statement is not filed on or prior
to July 31, 1997, the exercise price of the Warrants will be
reduced by $.50. In the event such registration statement is
not declared effective on or prior to October 31, 1997, the
exercise price of the Warrants will be reduced by $.50.
The Second Supplemental Indenture provides that (i) the
conversion price for the Notes shall be $5.50 per Share and
(ii) the Notes are to be converted at a rate of 103% of their
principal amount; provided, however, that, subject to certain
de minimis exceptions, each Holder may only convert up to
forty percent (40%) of the initial aggregate principal amount
of Notes held by such Holder in any 60-day period.
On July 8, 1997, in connection with the transactions
described above the Manager, on behalf of the Accounts, (i) by
letter dated as of July 2, 1997 (the "Withdrawal
Letter")(Exhibit C hereto and incorporated by reference
herein), revoked and withdrew its notice of the defaults to
the Company in the Default Letter (previously reported in the
Schedule 13D and Amendment No. 5 thereto), (ii) executed a
Consent and Waiver, dated July 2, 1997 (the "Consent and
Waiver")(Exhibit D hereto and incorporated by reference
herein), pursuant to which the Manager and certain other
holders of the Notes consented to the execution and delivery
of the Second Supplemental Indenture and waived certain
defaults under the Indenture and the Note Purchase Agreement,
(iii) entered into a Standstill Agreement with the Company and
Donald K. McGhan and his affiliates (collectively, "McGhan"),
dated as of July 2, 1997 (the "Standstill Agreement") (Exhibit
E hereto and incorporated by reference herein), (iv) entered
into a Letter Agreement with the Company, dated as of July 2,
1997 (the "Letter Agreement")(Exhibit F hereto and incorporated
by reference herein), and (v) became a third-party beneficiary
to the Company's Rights Agreement, dated as of June 2, 1997,
as amended (the "Rights Agreement").
Pursuant to the Standstill Agreement, the Manager agreed
that it would not, until September 30, 1997: (i) by purchase,
conversion of a derivative security, or otherwise, acquire, or
agree to acquire, ownership (including, but not limited to,
beneficial ownership) of any Shares, or any notes, debentures
or other securities which may be convertible or exchangeable
into Shares, provided, however, that the Manager may convert
any Notes and Warrants which it currently holds and may
exercise any of its preemptive rights under Section 8.12 of
the Indenture governing any Notes which it currently holds;
(ii) make any public announcement with respect to (a) any
proceeding under the bankruptcy laws (whether or not
consensual), or (b) the acquisition of beneficial ownership of
Shares, or (c) any extraordinary transaction or merger
consolidation, sale of substantial assets or business
combination involving the Company or any of its affiliates;
(iii) make, or in any way participate in, any "solicitation"
of "proxies" (as such terms are defined or used in Regulation
14A under the Securities Exchange Act of 1934 (the "Exchange
Act")), or become a "participant" in any "election contest"
(as such terms are defined or used in Rule 14a-11 under the
Exchange Act) to vote, or seek to advise or influence any
person or entity with respect to the voting of, any voting
securities of the Company or any of its affiliates; (iv) form,
join or in any way participate in a "group" (as such term is
used in Section 13d(3) of the Exchange Act) to take any action
otherwise prohibited under the Standstill Agreement; (v)
publicly initiate or propose any shareholder proposals for
submission to a vote of shareholders, whether by action at a
shareholder meeting or by written consent, with respect to the
Company or any of its affiliates or propose the removal of any
member of the Board of Directors; or (vi) publicly request the
Company (or its directors, officers, employees or agents) to
amend or waive any provision of the Standstill Agreement or
otherwise seek any modification to or waiver of any of the
agreements or obligations hereunder.
Pursuant to the Standstill Agreement, during the term of
the Standstill Agreement, with respect to each matter
submitted to the shareholders of the Company for a vote,
whether at a meeting or pursuant to any consent of
shareholders, the Manager and McGhan agreed to vote (whether
by proxy or otherwise) all Shares owned by each of them in
proportion to the vote of all other shareholders.
Pursuant to the Standstill Agreement, McGhan shall not
by purchase, conversion of a derivative security, or
otherwise, acquire, or agree to acquire, ownership (including,
but not limited to, beneficial ownership) of any Shares, or
any notes, debentures or other securities which may be
convertible or exchangeable into Shares; provided, however,
that McGhan may convert any Notes, Warrants or options which
he held as of June 30, 1997. In addition, notwithstanding the
foregoing, following the Company's public disclosure of the
hiring of a new Chief Financial Officer, McGhan may become the
"Beneficial Owner" of up to, but not exceeding, 19.9% of the
outstanding Shares.
The Standstill Agreement shall terminate on September
30, 1997 unless terminated earlier due to (i) the occurrence
and continuance of an Event of Default (as defined in the
Indenture) under the Indenture, (ii) a determination that
defaults existed under the Indenture for the year ended
December 31, 1996 and the quarter ended March 31, 1997, but
were not disclosed to the Manager in connection herewith,
(iii) the failure of the Company at any time to properly
disclose material events in its filings with the Securities
and Exchange Commission, (iv) a breach by the Company of any
covenants set forth in the Standstill Agreement or in any
other agreement entered into with Appaloosa in connection
therewith, or (v) the date on which the Manager makes a
reasonable and good faith determination that the Company's
maximum exposure in the breast implant litigation is
materially greater than the amount previously disclosed to the
Manager in connection with the Standstill Agreement.
Pursuant to the Letter Agreement, the Company agreed to,
among other things, (i) register the Shares held by the
Accounts in certain circumstances, (ii) indemnify and hold
harmless the Manager and its affiliates from claims and
liabilities arising out of the execution of the Letter
Agreement, Indenture (as amended by the Second Supplemental
Indenture), the Warrant Agreement, the Consent and Waiver and
the Standstill Agreement, (iii) pay certain legal fees
incurred by the Manager relating to the above-described
transactions, (iv) cause a designee of the Manager to be
nominated to the Board of Directors of the Company and (v)
provide the Manager with certain information on an ongoing
basis with respect to the Company's operations.
The Company executed Amendment No. 2, dated as of July
2, 1997, to the Rights Agreement ("Amendment No. 2"). Pursuant
to Amendment No. 2, the Company agreed (i) to exempt the
Manager and its affiliates from the application of certain
provisions of the Rights Agreement to the acquisition of
additional Shares through the conversion of the Notes, the
exercise of the Warrants or the exercise of any pre-emptive
rights they may have as holders of the Notes under the
Indenture and (ii) to delete certain "continuing directors"
provisions from the Rights Agreement.
Except as set forth above, there exist no contracts,
arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 and between such
persons and any persons with respect to any securities of the
Company, including but not limited to transfer or voting of
any securities, finders' fees, joint ventures, loan or option
agreements, put or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7.Material to Be Filed as Exhibits
Exhibit A:Second Supplemental Indenture
Exhibit B:Warrant Agreement
Exhibit C:Withdrawal Letter
Exhibit D: Consent and Waiver
Exhibit E: Standstill Agreement
Exhibit F: Letter Agreement<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: July 14, 1997
Appaloosa Management L.P.
By:Appaloosa Partners Inc.,
Its General Partner
By:/s/ David A. Tepper
David A. Tepper
President
David A. Tepper
/s/ David A. Tepper <PAGE>
EXHIBIT INDEX
ExhibitExhibit NamePage
ASecond Supplemental
Indenture [Incorporated by
reference to Exhibit
10.2 to the Report on
Form 8-K of the Company
filed July 14, 1997]
B Warrant Agreement [Incorporated by
reference to Exhibit
10.6 to the Report on
Form 8-K of the Company
filed July 14, 1997]
C Withdrawal Letter [Incorporated by
reference to Exhibit
10.5 to the Report on
Form 8-K of the Company
filed July 14, 1997]
D Consent and Waiver [Incorporated by
reference to Exhibit
10.4 to the Report on
Form 8-K of the Company
filed July 14, 1997]
E Standstill Agreement [Incorporated by
reference to Exhibit
10.1 to the Report on
Form 8-K of the Company
filed July 14, 1997]
F Letter Agreement 13
<PAGE>
EXHIBIT F
INAMED CORPORATION
3800 Howard Hughes Parkway
Suite 1800
Las Vegas, Nevada 89109
July 2, 1997
Appaloosa Management L.P.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
Attention: Mr. David Tepper
Gentlemen:
Reference is made to: (i) the Warrant Agreement, dated
as of the date hereof, between Inamed Corporation (the
"Company") and U.S. Stock Transfer Corporation as Warrant Agent
(the "Warrant Agreement"); (ii) the Second Supplemental
Indenture, dated as of the date hereof (the "Supplemental
Indenture"), to the Indenture, dated as of January 2, 1996 (as
amended from time to time, the "Indenture"); (iii) the Consent
and Waiver, dated as of the date hereof, delivered in
connection with the Indenture (the "Consent and Waiver"); and
(iv) the Standstill Agreement, dated as of the date hereof, by
and among the Company, Appaloosa (as defined below) and Donald
K. McGhan (the "Standstill Agreement"). In consideration of
obtaining from Appaloosa Management L.P. (on behalf of its
affiliates who hold securities of the Company (collectively,
"Appaloosa")) contemporaneously herewith Appaloosa's consent
to and waiver of certain existing covenant defaults under the
Indenture specified in the Consent and Waiver and in order to
induce Appaloosa to execute the Consent and Waiver and to
consent to the terms of the Supplemental Indenture and the
Warrant Agreement, the Company agrees to the following:
1. From and after the date hereof, the Company shall
indemnify and hold harmless Appaloosa and its employees
and associates from and against any losses, claims,
damages and liabilities, and related costs and expenses,
including attorneys' fees, to the extent they relate to,
are the result of or arise out of in any way the
execution and delivery of this letter agreement or any
of the Indenture, the Warrant Agreement, the Consent and
Waiver or the Standstill Agreement (collectively, the
"Transaction Documents").
2. Upon the execution of this letter agreement, the Company
will pay $100,000 in cash to Appaloosa (not including
any fees payable to Ernst & Young in connection with its
examination of the Company's books and records) in lieu
of an accounting of Appaloosa's costs and expenses
incurred in connection with this letter agreement and
related matters.
3. The Company will use its best efforts to provide
Appaloosa with information on an ongoing basis
concerning the affairs of the Company, including
information on the Company's search for new senior
executives and regarding the Silicone Gel Breast
Implants Products Liability Litigation MDL 926 currently
pending in the United States District Court, Northern
District of Alabama, Southern Division.
4. In addition to any other registration rights contained
in the Transaction Documents, if, at any time, the
Company proposes or is required to register any of its
equity securities under the Act (as defined in the
Warrant Agreement) (other than pursuant to registrations
on such form or similar form(s) solely for registration
of securities in connection with an employee benefit
plan or dividend reinvestment plan), the Company shall
give prompt written notice to Appaloosa of its intention
to so register its securities and of Appaloosa's rights
under this paragraph. Upon the written request of
Appaloosa made within 20 days following the receipt of
any such written notice (which request shall specify the
maximum number of shares of Common Stock (as defined in
the Warrant Agreement) intended to be disposed of by
Appaloosa), the Company will use its best efforts to
effect the registration under the Act of all shares of
Common Stock which the Company has been so requested to
register by Appaloosa. Appaloosa shall have the right
to withdraw its request for inclusion of its Common
Stock in any registration statement pursuant to this
paragraph at any time by giving written notice to the
Company of its request to withdraw. Except for
underwriting discounts (which will be borne by
Appaloosa), the Company shall pay all expenses
(including, without limitation, filing and applicable
fees of the Securities and Exchange Commission) in
connection with any registration pursuant to this
paragraph of Common Stock held by Appaloosa. The
provisions of Sections 12(b), 12(c), 12(d) and 12(e) of
the Warrant Agreement are incorporated herein by
reference, except references therein to the Warrants or
Warrant Shares being registered pursuant to Section 12
of the Warrant Agreement shall, for purposes hereof, be
deemed to be references to the Common Stock held by
Appaloosa being registered pursuant to this paragraph.
5. At the request of Appaloosa, the Company shall take all
necessary action to cause a representative of Appaloosa
as Appaloosa may designate to be nominated to the Board
of Directors of the Company (any person designated by
Appaloosa pursuant to this paragraph from time to time,
an "Appaloosa Designee"). Thereafter, in connection
with any annual meeting of stockholders at which the
term of the Appaloosa Designee is to expire, the Company
will take all necessary action to cause an Appaloosa
Designee to be nominated and shall use its best efforts
to cause such Appaloosa Designee to be elected to the
Board of Directors of the Company. Appaloosa shall have
the sole right to remove any Appaloosa Designee, with or
without cause. In the event of any vacancy arising by
reason of the resignation, death, removal or inability
to serve of any Appaloosa Designee, Appaloosa shall be
entitled to designate a successor to fill such vacancy
for the unexpired term. In addition, from and after the
date an Appaloosa Designee joins the Board of Directors
of the Company, the Company shall maintain a Board of
Directors consisting of at least a majority of qualified
independent outside directors.
In addition, the Company represents and warrants as of the
date hereof as follows:
1. The Company has all right, power and authority to enter
into this letter agreement and the Transaction Documents
and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this letter
agreement and each of the Transaction Documents and
compliance by the Company with all the provisions hereof
and thereof (including the issuance of shares upon
conversion of the Notes (as defined in the Indenture) or
upon exercise of the Warrants (as defined in the Warrant
Agreement)) and consummation by the Company of the
transactions contemplated hereby and thereby (i) do not
and will not require the approval or consent of the
stockholders of the Company; and (ii) have been duly
authorized by the Company's Board of Directors, and
(iii) do not and will not require any other corporate
action on the part of the Company.
2. This letter agreement and the Transaction Documents have
each been duly executed and delivered by the Company and
constitute valid and binding agreements of the Company,
enforceable in accordance with their respective terms,
except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating
to creditors' rights. The shares of common stock of the
Company issuable upon conversion of the Notes and upon
exercise of the Warrants have been validly reserved for
issuance, and upon issuance, will be validly issued and
outstanding, fully paid, and nonassessable.
3. The execution, delivery and performance of this letter
agreement and the Transaction Documents, the issuance of
shares of common stock of the Company upon conversion of
the Notes or upon exercise of the Warrants, and the
fulfillment of or compliance with the terms and
provisions hereof or thereof, do not and will not
conflict with or result in a breach of the terms,
conditions, or provisions of, or give rise to a right of
termination under, or constitute a default under, or
result in any violation of, the Articles or By-Laws or
any contract of the Company or any of its subsidiaries,
nor do any of them or will any of them violate or result
in a breach of or constitute a default under any law,
rule, regulation, judgment, injunction, order, decree or
other restriction of any court or governmental authority
to which the Company or any of its subsidiaries is
subject. Except as expressly acknowledged in the
Transaction Documents, the Company is not in default
under any outstanding indenture or other debt instrument
or with respect to the payment of the principal of or
interest on any outstanding obligations for borrowed
money, or is in default under any of its contracts.
If this letter agreement accurately reflects Appaloosa's
understanding of the agreement between Appaloosa and the
Company, please sign this letter and the enclosed copy and
return one of them to the Company whereupon the foregoing
shall constitute a valid and binding agreement between
Appaloosa and the Company.
Very truly yours,
INAMED CORPORATION
By:________________
Agreed to and accepted as of
the date first above written:
APPALOOSA MANAGEMENT L.P.
By: _______________________
