<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 16, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
----------------
PLATINUM TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3509662
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1815 SOUTH MEYERS ROAD, OAKBROOK TERRACE, ILLINOIS 60181, (708) 620-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
LARRY S. FREEDMAN, ESQ.
PLATINUM TECHNOLOGY, INC.
1815 SOUTH MEYERS ROAD, OAKBROOK TERRACE, ILLINOIS 60181, (630) 620-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH COPIES TO:
MATTHEW S. BROWN, ESQ.
MARK D. WOOD, ESQ.
KATTEN MUCHIN & ZAVIS
525 WEST MONROE STREET, SUITE 1600
CHICAGO, ILLINOIS 60661
(312) 902-5200
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. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE PRICE FEE
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<S> <C> <C> <C> <C>
Convertible Subordinated Notes.. $150,000,000(1) 100%(1) $150,000,000(1) $44,250
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Common Stock, $.001 par val- 4,160,600
ue(2).......................... shares -- -- --
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</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(i) under the Securities Act of 1933.
(2) Such number represents the number of shares of Common Stock initially
issuable upon conversion of the Notes registered hereby and, pursuant to
Rule 416 under the Securities Act of 1933, as amended, such indeterminate
number of shares of Common Stock as may be issued from time to time upon
conversion of the Notes by reason of adjustment of the conversion price
under certain circumstances outlined in the Prospectus. Pursuant to Rule
457(i), no registration fee is required for these shares.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 16, 1998
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P R O S P E C T U S
-----------
LOGO
Logo of Platinum Technology
$150,000,000
6.25% CONVERTIBLE SUBORDINATED NOTES DUE 2002
AND SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
This Prospectus relates to the offer and sale by the selling securityholders
named herein under "Selling Securityholders," their pledgees, donees,
transferees or distributees, or their respective successors-in-interest
(collectively, the "Selling Securityholders") of 6.25% Convertible Subordinated
Notes due 2002 (the "Notes") of PLATINUM technology, inc. (the "Company") in
the aggregate principal amount of $150,000,000 and shares of common stock, par
value $.001 per share, of the Company (the "Common Stock") issued or issuable
upon conversion of the Notes (the "Shares").
Interest on the Notes is payable on June 15 and December 15 of each year,
commencing June 15, 1998. The Notes mature on December 15, 2002. The Notes are
convertible into Common Stock of the Company at any time prior to the close of
business on the maturity date, unless previously redeemed or repurchased, at a
conversion price of $36.0525 per share (equivalent to a conversion rate of
approximately 27.74 shares per $1,000 principal amount of Notes), subject to
adjustment. See "Description of Notes--Conversion."
The Notes are redeemable by the Company in the event of certain developments
involving withholding taxes of the United States. See "Description of Notes--
Redemption--Redemption for Taxation Reasons." Otherwise, the Notes are not
redeemable prior to December 15, 2000. On or after December 15, 2000, the Notes
will be redeemable at the option of the Company, in whole, or from time to
time, in part, at the redemption prices set forth in this Prospectus, plus
accrued interest and any Additional Amounts (as defined) then payable. See
"Description of Notes--Redemption--Optional Redemption." In the event of a
Change of Control (as defined), each Holder of Notes may require the Company to
repurchase its Notes, in whole or in part, for cash, at 100% of the principal
amount thereof, plus accrued interest and any Additional Amounts then payable.
See "Description of Notes--Repurchase at Option of Holders Upon a Change of
Control."
The Notes are unsecured general obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness (as defined) of
the Company. In addition, the Notes will be effectively subordinated to the
liabilities, including trade payables, of the Company's subsidiaries. As of
February 28, 1998, there was approximately $50.5 million of indebtedness of the
Company outstanding that would have constituted Senior Indebtedness and there
was approximately $76.6 million of indebtedness and other liabilities of
subsidiaries of the Company outstanding (excluding intercompany liabilities) to
which the Notes were effectively subordinated. The Indenture (as defined) does
not restrict the Company from incurring additional Senior Indebtedness of the
Company or its subsidiaries from incurring other indebtedness and liabilities.
The Notes are designated for trading on The Portal Market. Notes sold
pursuant to this Prospectus will not remain eligible for trading on The Portal
Market. Application will be made to list the Notes for trading on the
Luxembourg Stock Exchange. The Common Stock is traded on the Nasdaq National
Market under the symbol "PLAT." The last reported sale price of the Common
Stock on the Nasdaq National Market on March 13, 1998 was $26 9/16 per share.
The Notes and Shares (collectively, the "Securities") may be offered by the
Selling Securityholders from time to time in transactions (which may include
block transactions in the case of the Shares) on any exchange or market on
which such Securities are listed or quoted, as applicable, in negotiated
transactions, through a combination of such methods of sale, or otherwise, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices or at negotiated prices.
The Selling Securityholders may effect such transactions by selling the
Securities directly or to or through broker-dealers, who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Securityholders and/or the purchasers of the Securities for whom such
broker-dealers may act as agents or to whom they may sell as principals, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions). The Company will not receive any of the proceeds from
the sale of the Securities by the Selling Securityholders. The Company has
agreed to pay all expenses incident to the offer and sale of the Securities
offered by the Selling Securityholders hereby, except that the Selling
Securityholders will pay all underwriting discounts and selling commissions, if
any. See "Plan of Distribution."
The Selling Securityholders and any broker-dealer, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Securities may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them and any profits on the
resale of the Securities purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is , 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Room 1024, Washington, D.C. 20549, and at the Commission's
following Regional Offices: Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549. Reports, proxy statements and other
information filed electronically by the Company with the Commission are
available at the Commission's web site at http://www.sec.gov. The Company's
Common Stock is traded on the Nasdaq National Market, and reports, proxy
statements and other information concerning the Company also may be inspected
at the offices of The Nasdaq Stock Market, 1735 K Street, N.W., Washington,
D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement which may be inspected
and copied in the manner and at the sources described above. Any statements
contained or incorporated by reference herein concerning the provisions of any
document filed as an Exhibit to the Registration Statement or otherwise filed
with the Commission are not necessarily complete and, in each instance,
reference is made to the copy of such document so filed. Each such statement
is qualified in its entirety by such reference.
DB2 and MVS are trademarks, and IBM is a registered trademark, of
International Business Machines Corporation. This Prospectus also includes
product names and other trade names and trademarks of the Company and its
subsidiaries and of other companies.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Securities and Exchange
Commission (the "Commission") by the Company and are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997;
2. The Company's Current Reports on Form 8-K dated January 27, 1998 and
March 3, 1998;
3. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed March 7, 1991 pursuant to
Section 12 of the Exchange Act and all amendments thereto and reports
filed for the purpose of updating such description; and
4. The description of the preferred stock purchase rights contained in the
Company's Registration Statement on Form 8-A filed December 26, 1995
pursuant to Section 12 of the Exchange Act and all amendments thereto
and reports filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein be reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in any subsequently filed document which is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
i
<PAGE>
The Company will provide, without charge, to each person to whom a copy of
this prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (other
than exhibits thereto, unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephone requests for such copies should be directed to the Company's
principal office: PLATINUM technology inc., 1815 South Meyers Road, Oakbrook
Terrace, Illinois 60181, Attention: Secretary (telephone: (630) 620-5000).
ii
<PAGE>
RISK FACTORS
In addition to the other information included and incorporated by reference
in this Prospectus, potential purchasers should consider carefully the
following factors in evaluating the Company, its business and the Notes and
shares of Common Stock offered hereby.
NET LOSSES; ABILITY TO SATISFY DEBT OBLIGATIONS
The Company has experienced operating and net losses in 1995, 1996 and 1997.
There can be no assurance that the Company will not continue to incur
operating and net losses. The Company's future operating results will depend
on a number of business factors, including other factors discussed in these
"Risk Factors", as well as general economic conditions. Furthermore, prior to
a given year or other fiscal period, the Company hires sales and product
development personnel and makes other decisions which will result in increased
expenses in such year or other period, based upon anticipated revenues for
such year or other period. Due to the seasonality and concentration of the
Company's revenues at the end of fiscal periods, particularly the fourth
quarter, the Company's lack of backlog and the Company's cost structure, if
revenue targets are not met, the Company's operating results would be
materially adversely affected. See "--Seasonality and Variability of Quarterly
Operating Results." No assurances can be given that any of the Company's
revenue expectations will be fulfilled, and the Company's business, results of
operations and financial condition will be materially adversely affected if
these expectations are not fulfilled. If anticipated revenues and income are
not achieved, the Company's ability to pay interest on, or ultimately pay the
principal amount of, its indebtedness could become impaired. As of February
28, 1998, the Company had outstanding long-term obligations and acquisition-
related payables of approximately $300.9 million, requiring the Company to
make payments of principal and interest of approximately $35.0 million and
$36.0 million in 1998 and 1999, respectively. If the Company is unable to meet
its cash requirements out of cash flow from operations and its available
borrowings, there can be no assurance that it will be able to obtain
alternative financing or that it will be permitted to do so under the terms of
its existing financing arrangements. In the absence of such financing, the
Company's ability to respond to changing business and economic conditions, to
make future acquisitions, to absorb adverse operating results or to fund
capital expenditures or increased working capital requirements may be
adversely affected.
RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS AND MARKETS
The Company expects that the market for IT software products will continue
to be subject to frequent and rapid changes in technology and customer
preferences. Substantially all of the Company's products have maintained their
commercial viability for a significant period of time, as evidenced by the
fact that the Company has discontinued very few of its products. However, the
introduction of products embodying new technologies and the emergence of new
industry standards can render existing products obsolete and unmarketable. The
timing of releases of new products and enhancements of existing products by
the Company varies depending on customer demand and emerging technology. The
Company"s growth and future financial performance will depend upon its ability
to develop and introduce new products and enhancements of existing products
that accommodate the latest technological advances and customer requirements.
There can be no assurance that additional new products will be successfully
developed or marketed by the Company, that any new products will achieve
market acceptance, or that other software vendors will not develop and market
products which are superior to the Company's products or that such products
will not achieve greater market acceptance. Furthermore, customers may delay
purchases in anticipation of technological changes. The Company's ability to
develop and market software infrastructure products and other new products
depends upon its ability to attract and retain qualified employees. Any
failure by the Company to anticipate or respond adequately to the changes in
technology and customer preferences, to develop and introduce new products in
a timely fashion, or to attract
1
<PAGE>
and retain qualified employees, could materially adversely affect the
Company's business, results of operations and financial condition.
RELIANCE ON AND RISKS OF ACQUISITION STRATEGY
The Company expects to continue its strategy of identifying, acquiring and
developing software infrastructure products, services and technologies through
the acquisition of specific products and of businesses which have developed
such products, services and technologies. The Company from time to time
engages in, and is currently engaged in, discussions with potential
acquisition candidates, including discussions relating to acquisitions that
may be material in size and/or scope and which may involve issuances by the
Company of a significant number of shares of the Company's Common Stock.
The Company believes that its future growth depends, in part, upon the
success of this strategy. There can be no assurance that the Company will
successfully identify, acquire on favorable terms or integrate such
businesses, products, services or technologies. The Company may in the future
face increased competition for acquisition opportunities, which may inhibit
the Company's ability to consummate suitable acquisitions and increase the
costs of completing such acquisitions.
Acquisitions involve a number of special risks and challenges, including the
diversion of management's attention, assimilation of the operations and
personnel of acquired companies, incorporation of acquired products into
existing product lines, adverse short-term effects on reported operating
results, amortization of acquired intangible assets, assumption of liabilities
of acquired companies, possible loss of key employees and difficulty of
presenting a unified corporate image. No assurance can be given that any
potential acquisition by the Company will or will not occur, or that, if an
acquisition does occur, it will not ultimately have a material adverse effect
on the Company or that any such acquisition will succeed in enhancing the
Company's business.
The Company has historically issued the Company Common Stock as
consideration for business acquisitions and expects to continue to do so in
the future. There can be no assurances that such issuances will not be
dilutive to the Company's stockholders. Additionally, the Company has recorded
charges for acquired in-process technology and merger costs in connection with
certain of its past acquisitions, which materially reduced operating and net
income for the periods in which the acquisitions were recorded. The Company
expects to continue to incur such charges in connection with future
acquisitions, which could materially reduce operating and net income in the
periods in which such acquisitions are consummated.
HIGHLY COMPETITIVE MARKETS
The market for the Company's products is highly competitive. The Company
expects to encounter enhanced competition and new competitors as it continues
to penetrate the software infrastructure market, including competition from
relational database vendors and systems software companies. Many of the
Company's current and prospective competitors have significantly greater
financial, technical and marketing resources than the Company. Competitive
pressure could cause the Company's products to lose market acceptance or
result in significant price erosion, with a material adverse effect upon the
Company's results of operations.
A variety of external and internal factors could adversely affect the
Company's ability to compete in the software infrastructure market. Such
factors include the following: relative functionality, integration,
performance and reliability of the products offered by the Company and its
competitors; the success and timing of new product development efforts;
changes affecting the hardware, operating systems or database systems which
the Company currently supports; the level of demonstrable economic benefits
for users relative to cost; relative quality of customer support and user
documentation; ease of installation; vendor reputation, experience and
financial stability and price.
The Company also encounters competition from a broad range of firms in the
market for professional services. Many of the Company's current and
prospective competitors in the professional services market have
2
<PAGE>
significantly greater financial, technical and marketing resources than the
Company. The competitive factors affecting the market for the Company's
professional services include the following breadth and quality of services
offered, vendor reputation and the ability to retain qualified technical
personnel.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
The Company's success is heavily dependent upon its proprietary software
technology. The Company relies on a combination of contractual rights,
trademarks, trade secrets, patents and copyright laws to establish or protect
its proprietary rights in its products. The Company's license agreements
restrict a customer's use of the Company's software and prohibit disclosure to
third persons. Notwithstanding those restrictions, it may be possible for
unauthorized persons to obtain copies of the Company's software products. The
Company registers its product names and other trademarks in the United States
and certain foreign countries. There can be no assurance that the steps taken
by the Company in this regard will be adequate to deter misappropriation of
its proprietary rights or independent third party development of functionally
equivalent technologies. Although the Company does not believe that it is
materially infringing on the intellectual property rights of others, there can
be no assurance that such a claim will not be successfully asserted against
the Company in the future or that any attempt to protect its technology will
not be challenged.
DEPENDENCE ON DB2
A significant portion of the Company's revenues will continue to be derived
from products that enhance the performance and functionality of IBM's DB2
relational database management software, which operates on IBM and compatible
mainframe computer systems running the MVS operating system. A decline or a
perceived decline in IBM's commitment to DB2 or a decline in the market's
acceptance and utilization of DB2 would have an adverse effect on the Company,
and such adverse effect could be material. Also, if IBM were to enhance DB2 or
its DB2 utilities so as to render the Company's products obsolete or
unnecessary, or devote more resources to developing and marketing IBM's own
DB2 tools and utilities, the Company's business could be materially adversely
affected.
DEPENDENCE ON RELATIONSHIPS WITH RELATIONAL DATABASE VENDORS
The Company believes that in order to address its markets, the Company must
develop, maintain and enhance close associations with, and obtain access to
the technical personnel of, leading relational database vendors. This may
become increasingly difficult due to competition among such vendors. The
Company has entered into alliances with, among others, Oracle Systems Corp.,
Sybase, Inc. and Informix Software, Inc. There can be no assurance that the
Company will be able to maintain existing relationships or enter into new
relationships with such vendors. The Company's failure to do so would have an
adverse effect on its business, results of operations and financial condition,
and such adverse effect could be material.
SUSCEPTIBILITY TO GENERAL ECONOMIC CONDITIONS
The Company's revenues and results of operations will be subject to
fluctuations based upon general economic conditions. If there were a general
economic downturn or a recession in the United States or certain other
markets, the Company believes that certain of its customers might reduce or
delay their purchases of the Company's products or services, leading to a
reduction in the Company's revenues. The factors that might influence current
and prospective customers to reduce their IT budgets under these circumstances
are beyond the Company's control. In the event of an economic downturn, the
Company's business, results of operations and financial condition could be
materially adversely affected. There can be no assurance that growth in the
markets for the Company's products and services will occur or that such growth
will result in increased demand for the Company's products and services.
SEASONALITY AND VARIABILITY OF QUARTERLY OPERATING RESULTS
The Company has experienced a seasonal pattern in its operating results,
with the fourth quarter typically having the highest total revenues and
operating income. Further, revenues for the Company's fourth quarters have
historically been higher than those for the first quarters of the following
years. Because operating expenses
3
<PAGE>
continued to increase in the first quarters of those years, the Company
realized substantially lower operating margins and net income (excluding the
effect of charges for acquired in-process technology and merger costs) for
such quarters. The Company expects this pattern to continue for the
foreseeable future. The Company believes the seasonality of its revenues
results primarily from the budgeting cycles of its software product customers
and the structure of the Company's sales commission and bonus programs.
The Company operates with relatively little order backlog and substantially
all of its software product revenues in each quarter result from sales made in
that quarter. Consequently, if near term demand for the Company's products
weakens or if sales do not close in any quarter as anticipated, the Company's
results of operations for that quarter would be adversely, and perhaps
materially, affected. In addition, the timing and amount of the Company's
revenues are subject to a number of factors that make estimation of operating
results prior to the end of a quarter extremely uncertain. Historically, a
substantial majority of the Company's quarterly software products revenues has
been recorded in the third month of any given quarter, with a concentration of
such revenues in the last week of that third month, further increasing the
difficulty of predicting operating results.
The Company's operating results may vary significantly from quarter to
quarter depending on other factors such as the size and timing of customer
orders, price and other competitive conditions in the industry, the timing of
new product announcements and releases by the Company and its competitors, the
ability of the Company to develop, introduce and market new and enhanced
versions of the Company's products on a timely basis, changes in the Company's
level of operating expenses, changes in the Company's sales incentive plans,
budgeting cycles of its customers, customer order deferrals in anticipation of
enhancements or new products offered by the Company or its competitors, the
cancellation of licenses during the warranty period or nonrenewal--of
maintenance agreements, product life cycles, software bugs and other risks
discussed herein. See "Rapid Technological Change; Dependence on New Products
and Markets" and "Highly Competitive Markets."
RISKS OF INTERNATIONAL SALES
The risks inherent in conducting international business generally include
exposure to currency fluctuations, longer payment cycles, greater difficulties
in accounts receivable collection and the burdens of complying with a wide
variety of foreign laws. Approximately 32%, 30% and, 29% of the Company's
revenues in 1995, 1996 and 1997, respectively, were attributable to
international sales. Exchange rate fluctuations can have a material adverse
effect on the total level of foreign sales and the profitability of those
sales. During the past several years, the Company has changed the primary
means of international distribution of its products from a network of
independent distributors to wholly-owned the Company subsidiaries. The Company
may encounter difficulties in integrating and managing these new overseas
subsidiaries.
RISKS OF CONSULTING SERVICES BUSINESS
The Company is subject to the risks associated with a consulting services
business, including dependence on its reputation with existing customers,
volatility of workload and dependence on ability to attract and retain
qualified technical personnel. Also, a substantial portion of the Company's
consulting services revenue may be derived from the performance of services
under fixed-price contracts. There can be no assurance that the Company can
consistently perform in a profitable manner under these contracts,
particularly in the field of software development, where cost overruns are
commonplace.
SUBSTANTIAL LEVERAGE
On December 16, 1997, the Company issued $150,000,000 in aggregate principal
amount of the Notes, which bear interest at 6.25% annually and mature on
December 15, 2002. As a result of this additional indebtedness, the Company's
principal and interest obligations increased substantially. The degree to
which the Company is now leveraged could materially and adversely affect the
Company's ability to obtain financing for working capital, acquisitions or
other purposes and could make it more vulnerable to industry downturns and
competitive pressures.
DEPENDENCE ON KEY PERSONNEL
Competition for qualified personnel in the software industry is intense, and
there can be no assurance that the Company will be able to attract and retain
a sufficient number of qualified employees. The Company's success depends to a
significant degree upon the continued contributions of its key management,
marketing,
4
<PAGE>
product development, professional services and operational personnel,
including key personnel of acquired companies. As the business of the Company
grows, it may become increasingly difficult for it to hire, train and
assimilate the number of new employees required. In addition, it is possible
that the business changes or uncertainty brought about by recent acquisitions
may cause key employees to leave the Company, and certain key members of the
management of acquired companies may not continue with the Company. Any
difficulty in attracting and retaining key employees could have a material
adverse effect on the Company's business, results of operations and financial
condition.
The Company's success to date has depended in large part on the skills and
efforts of Andrew J. Filipowski, the Company's President and Chief Executive
Officer, and Paul L. Humenansky, the Company's Executive Vice President-
Product Development and Chief Operations Officer. The Company has not entered
into non-competition agreements with Messrs. Filipowski or Humenansky or any
of its other key personnel, nor does the Company have "key man" life insurance
policies covering these individuals.
VOLATILITY OF THE COMPANY'S STOCK PRICE
The Company's Common Stock price has historically been volatile. The Company
believes factors such as quarterly fluctuations in results of operations,
announcements of new products and acquisitions by the Company or by its
competitors, changes or anticipated changes in earnings estimates by analysts,
changes in accounting treatments or principles and other factors may cause the
market price of the Company Common Stock to fluctuate, perhaps substantially.
The market price of the Company Common Stock may be affected by the Company's
ability to meet or exceed analysts' or "street" expectations, and any failure
to meet or exceed such expectations, could have a material adverse effect on
the market price of the Company Common Stock. In addition, stock prices for
many technology companies fluctuate widely for reasons which may be unrelated
to operating results. These fluctuations, as well as general economic,
political and market conditions may adversely affect the market price of the
Company Common Stock in the future. In the past, following periods of
volatility in the market price of a company's securities, class action
securities litigation has often been instituted against such company. Any such
litigation instigated against the Company could result in substantial costs
and a diversion of management's attention and resources, which could have a
material adverse effect on the Company's business, results of operations and
financial condition.
ANTITAKEOVER EFFECT OF RIGHTS AGREEMENT, CHARTER AND STATUTORY PROVISIONS
The Company has entered into a rights agreement (the "Rights Agreement"),
which provides that, in the event that 15% or more of the outstanding shares
of the Company Common Stock are acquired by a person or group of persons, the
holder of each outstanding share of the Company Common Stock, other than such
acquiring, person(s), shall have the right to purchase from the Company
additional shares of the Company Common Stock having a market value equal to
two times the exercise price of such right. In addition, the Company's
Restated Certificate of Incorporation, as amended, provides that the Board of
Directors shall be classified with respect to the terms for which its members
shall hold office by dividing the members into three classes. The Company is
also subject to Section 203 of the Delaware General Corporation Law which, in
general, imposes restrictions upon acquirers of 15% or more of the Company
Common Stock. The Rights Agreement and these other provisions may have the
effect of delaying, deferring or preventing a change of control of the
Company, even if such event would be beneficial to stockholders.
SUBORDINATION; COMPANY STRUCTURE; SUBSIDIARY CASH FLOW
The Notes are general, unsecured obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness of the
Company. Although, to date, the Company has not incurred a substantial amount
of Senior Indebtedness, the Indenture does not restrict the incurrence of
Senior Indebtedness or other indebtedness by the Company or its subsidiaries.
Under the Indenture, generally, the Company will not be permitted to pay the
principal of, or premium, if any, or interest on the Notes or repurchase,
redeem or otherwise retire any Notes in the event of a default in the payment
of any principal of, premium, if any, or interest on any Senior Indebtedness
when it becomes due and payable, whether at maturity or at a date fixed for
prepayment or by acceleration or otherwise, unless and until such payment
default has been cured or waived, or
5
<PAGE>
in the event of certain other defaults with respect to Senior Indebtedness. In
addition, the Notes are effectively subordinated to all liabilities of the
Company's subsidiaries, including trade payables. Certain of the Company's
principal assets, including the rights to a significant portion of the
Company's proprietary software technology, are owned by the Company's
subsidiaries. If the Company were to default on any of its payment obligations
in respect to the Notes, trade creditors of such subsidiaries would have a
senior claim to such assets as compared to Holder (as defined) of the Notes.
As of February 28, 1998, the Company had approximately $50.5 million of Senior
Indebtedness and the Company's subsidiaries had approximately $76.6 million of
trade payables and accrued liabilities (excluding intercompany liabilities).
The Company conducts a significant portion of its operations through its
foreign subsidiaries. Accordingly, the Company may be dependent, from time to
time, in whole or in part, on its ability to obtain funds from such foreign
subsidiaries in order to service its indebtedness, including the Notes. The
Company's foreign subsidiaries may, from time to time, face governmentally
imposed and other restrictions on their ability to transfer funds to the
Company and may incur costs in connection with any such transfers. The Company
anticipates that from time to time it will incur additional indebtedness,
including Senior indebtedness, and that it and its subsidiaries will from time
to time incur additional indebtedness and liabilities. See "Description of
Notes--Subordination."
ABSENCE OF PUBLIC MARKET FOR THE NOTES AND RESTRICTIONS ON TRANSFER
The Notes are not currently eligible for trading on any exchange. Although
the Initial Purchasers have advised the Company that the they currently intend
to make a market in the Notes, they are not obligated to do so and may
discontinue such market making at any time without notice. In addition, such
market making activity will be subject to the limits imposed by the Securities
Act and the Exchange Act. Accordingly, there can be no assurance that any
market for the Notes will develop or, if one does develop, that it will be
maintained. If an active market for the Notes fails to develop or be
sustained, the trading price of such Notes could be materially adversely
affected. The Notes are designated for trading on The Portal Market; however,
Notes sold pursuant to this Prospectus will not remain eligible for trading on
The Portal Market.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Prospectus contains and incorporates by reference certain "forward-
looking statements" (as defined in Section 21E of the Exchange Act). Words
such as "anticipates," "believes," "plans," "expects," "estimates" and similar
expressions have been used to identify these forward-looking statements, but
are not the exclusive means of identifying these statements. These statements
reflect the Company's current beliefs and are based on information currently
available to the Company. Accordingly, these statements are subject to known
and unknown risks, uncertainties and other factors that could cause the
Company's actual growth, results, performance and business prospects and
opportunities to differ from those expressed in, or implied by, these
statements. These risks, uncertainties and other factors include the Company's
ability to develop and market existing and acquired products for the IT
infrastructure market; the Company's ability to successfully integrate its
acquired products, services and businesses and continue its acquisition
strategy; the Company's ability to adjust to changes in technology, customer
preferences, enhanced competition and new competitors in the IT infrastructure
and professional services markets; currency exchange rate fluctuations,
collection of receivables, compliance with foreign laws and other risks
inherent in conducting international business, risks associated with
conducting a consulting services business; general economic and business
conditions, which may reduce or delay customers' purchases of the Company's
products and services; charges and costs related to acquisitions; and the
Company's ability to protect its proprietary software rights from infringement
or misappropriation, to maintain or enhance its relationships with relational
database vendors, and to attract and retain key employees; and the other
factors discussed under the caption "Risk Factors." The Company is not
obligated to update or revise these forward-looking statements to reflect
events or circumstances after the date of this Prospectus.
6
<PAGE>
THE COMPANY
OVERVIEW
The Company develops, markets and supports software products, and provides
related professional services, that help organizations manage and improve
their information technology ("IT") infrastructures, which consist of data,
systems and applications. The Company's products and services help IT
departments, primarily in large and data intensive organizations, minimize
risk, improve service levels, and leverage information to make better business
decisions. The Company's products typically perform fundamental functions such
as automating operations, maintaining the operating efficiency of systems and
applications, and ensuring data access and integrity. The Company currently
develops software products through its four business units: database
management, systems management, application infrastructure management, and
data warehousing and decision support. Addressing businesses' increasing
demand for simplified vendor relationships and complete solutions to IT
problems, the Company's goal is to become the leading provider of IT
infrastructure management solutions by offering a comprehensive set of "best
in class" point products, product bundles and integrated product suites. The
Company also offers a wide array of professional services, including
consulting, systems integration and educational programs, both in conjunction
with and independent of software product sales.
To achieve its goal, the Company identified key technologies and skill sets
required to better manage the IT infrastructure. Through a combination of an
aggressive acquisition program and vigorous internal product development
efforts, the Company assembled the competencies to create complete
infrastructure management solutions. Devoting substantial resources to
integrating its products and technologies, the Company is now leveraging the
breadth of its product lines and its professional services capabilities to
provide complete, customized solutions for IT infrastructure problems. These
solutions include single products; product suites, which are sets of
integrated products drawn together from multiple business units of the
Company; and product bundles, which are sets of software applications that are
packaged together but do not necessarily have the level of integration that
defines a suite; as well as design and implementation services provided by the
Company's professional services staff. These solutions also include ongoing
product upgrades, maintenance and support, sometimes pursuant to multi-year
contracts. Evidencing the increasing demand from the Company's customers for
comprehensive solutions, the Company completed 102 transactions of over $1
million during 1997, as compared to 55 such transactions during 1996 and only
two such transactions during 1995. Each of these large transactions included
licenses for software product bundles or suites, along with future upgrades
and maintenance; software consulting services; or both product licenses and
related consulting services.
The Company is focusing on the development of products and services that
offer its customers maximum flexibility and functionality. The Company's
products are designed to permit a customer to either purchase prepackaged
integrated suites or to choose individual products and later add other
products as needed. The cornerstone of the Company's integration efforts is
POEMS (PLATINUM Open Enterprise Management Services), an internally developed
set of shared components that give the Company's products a common look and
feel, common installation and distribution and common communication, data and
events handling. POEMS integration is built into individual products so that,
as customers purchase additional the Company products, the newly acquired and
previously installed products can begin working together immediately. In
February 1998, the Company released for general availability its ProVision
suite of integrated systems and database management tools, which is the
Company's most significant POEMS-enabled integrated offering of products to
date. ProVision initially includes nine tools within the following key IT
management disciplines: job management, performance management and analysis,
software distribution, problem resolution, security, database utilities, and
database administration.
The Company is creating solutions for the needs of specific industries, as
well as general business needs. The Company also is enabling its products and
suites for application with intranets and the internet and offers a broad set
of solutions for the Year 2000 problem. Additionally, in late 1996, the
Company formed specialty consulting practice groups within its professional
services business unit, including groups dedicated to Year 2000 solutions and
internet/intranet technologies.
7
<PAGE>
The Company was incorporated in Delaware in 1987 and its executive offices
are located at 1815 South Meyers Road, Oakbrook Terrace, Illinois 60181. Its
telephone number at that address is (630) 620-5000 and its website is located
at http://www.platinum.com.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sales of the
Securities offered hereby. All of the proceeds will be received by the Selling
Securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges for the periods shown:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------
1993 1994 1995 1996 1997
-------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (1)................... 10.47(2) 7.49(3) --(4)(5) --(5)(6) --(5)(7)
</TABLE>
- --------
(1) The ratio of earnings to fixed charges has been computed by dividing
earnings available for fixed charges (earnings before income taxes plus
fixed charges less capitalized interest) by fixed charges (interest
expenses plus capitalized interest and the portion of rental expense which
represents interest).
(2) Reflects a pre-tax charge for acquired in-process technology of $8,735,000
relating primarily to the Company's acquisition of Datura Corporation and
a pre-tax charge of $4,659,000 relating to Trinzic Corporation ("Trinzic")
and Locus Computing Corporation ("Locus") restructuring costs.
(3) Reflects a pre-tax charge for acquired in-process technology of
$24,594,000 relating primarily to the Company's acquisitions of Dimeric
Development, Inc. and the net assets of Aston Brooke Software, Inc. and
AutoSystems Corporation.
(4) Reflects a pre-tax charge for acquired in-process technology of
$88,493,000 relating primarily to the Company's acquisitions of Advanced
Software Concepts, Inc., SQL Software Corporation, RELTECH Group, Inc.,
Protellicess Software, Inc., AIB Software Corporation and BMS Computer,
Inc. and the net assets of ViaTech Development, Inc., BrownStone
Solutions, Inc. and ProtoSoft, Inc. and to certain product acquisitions.
Also reflects a pre-tax charge for merger costs of $30,819,000 relating to
the Company's acquisitions of Software Interfaces, Inc., Answer Systems,
Inc., Locus, Altai, Inc., Trinzic and Softool Corporation.
(5)Earnings available for fixed charges of $(122,465,000), $(72,342,000) and
$(89,933,000) were inadequate to cover fixed charges of $782,000,
$1,825,000 and $9,130,000 for the years ended December 31, 1995, 1996 and
1997, respectively.
(6) Reflects a pre-tax charge for acquired in-process technology of
$48,456,000 relating to the Company's acquisitions of Advanced Systems
Technologies, Inc., Software Alternatives, Inc. (d/b/a System Software
Alternatives), Grateful Data, Inc. (d/b/a TransCentury Data Systems) and
VREAM, Inc.; substantially all of the assets of the Access Manager
business unit of the High Performance Systems division of International
Computers Limited; and certain product technologies. Also reflects a pre-
tax charge for merger costs of $5,782,000 relating primarily to the
Company's acquisitions of Prodea Software Corporation, Paradigm Systems
Corporation and Axis Systems International, Inc.
(7) Reflects a pre-tax charge for acquired in-process technology of
$67,904,000 relating to the Company's acquisitions of GEJAC, Inc. and
ProMetrics Group Limited, the purchase of certain product technologies and
other intangible assets from Intel Corporation and the purchase of certain
other product technologies. Also reflects a pre-tax charge for merger
costs of $8,927,000 relating to the Company's acquisition of Australian
Technology Resources Pty Limited, I & S Informationstechnik and Services
GmbH and Vayda Consulting, Inc. and a pre-tax charge of $57,319,000 for
restructuring costs.
8
<PAGE>
SELLING SECURITYHOLDERS
The Notes were issued and sold by the Company to certain initial purchasers
(the "Initial Purchasers") on December 16, 1997 in transactions exempt from
the registration requirements under the Securities Act. The Initial Purchasers
sold the Notes only (i) within the United States, to persons whom it
reasonably believed to be "qualified institutional buyers" (as defined in Rule
144A under the Securities Act) in reliance on Rule 144A under the Securities
Act and (ii) to certain persons outside the United States pursuant to
Regulation S under the Securities Act. The Selling Securityholders (which term
includes their transferees, pledgees, donees and their successors) may from
time to time offer and sell pursuant to this Prospectus any or all of the
Securities.
The following table sets forth, as of March 12, 1998, certain information
with respect to the principal amount of Notes beneficially owned by each
Selling Securityholder and the number of Shares that may be offered by the
Selling Securityholders from time to time pursuant to this Prospectus.
From time to time, Deutsche Morgan Grenfell Inc. or their affiliates have
provided, and may continue to provide, investment banking and financial
advisory services to the Company, for which they have received or will receive
customary fees. None of the other Selling Securityholders has or, within the
past three years, has had with the Company or any of its predecessors or
affiliates any material relationship, except as otherwise set forth below.
Because the Selling Securityholders may offer all or some of the Notes or the
Shares pursuant to this Prospectus, no estimate can be given as to the amount
of Notes or the Shares that will be held by the Selling Securityholders upon
termination of this offering. The table has been prepared based upon
information furnished to the Company by the Selling Securityholders.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NOTES BENEFICIALLY OWNED
-----------------------------------
NUMBER OF PRINCIPAL NUMBER OF
PRINCIPAL SHARES OF AMOUNT OF SHARES OF
AMOUNT OF COMMON NOTES BEING COMMON STOCK
NAME NOTES PERCENTAGE STOCK (1)(2) OFFERED BEING OFFERED
- ---- ----------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
AAM/Zazove Institutional
Income Fund, L.P....... $ 1,500,000 1.0% 41,605 $ 1,500,000 41,605
Acamas Anstact.......... $ 500,000 * 13,868 $ 500,000 13,868
AIM Charter Fund........ $15,500,000 10.3 429,928 $15,500,000 429,928
AIM V.I. Growth and
Income................. $ 2,500,000 1.7 69,343 $ 2,500,000 69,343
Ameritech Pension Plan.. $ 6,700,000 4.5 185,840 $ 6,700,000 185,840
Bank of America Pension
Plan................... $ 1,000,000 * 27,737 $ 1,000,000 27,737
Bankers Trust
International.......... $12,500,000 8.3 346,716 $12,500,000 346,716
Baptist Health.......... $ 154,000 * 4,271 $ 154,000 4,271
Boston Museum of Fine
Arts................... $ 63,000 * 1,747 $ 63,000 1,747
BT Alex Brown Inc....... $ 4,950,000 3.3 137,299 $ 4,950,000 137,299
BT Holdings (New York)
Inc.................... $ 3,500,000 2.3 97,080 $ 3,500,000 97,080
Canadian Imperial
Holdings, Inc.......... $ 9,500,000 6.3 263,504 $ 9,500,000 263,504
CFW-C, L.P.............. $ 5,000,000 3.3 138,686 $ 5,000,000 138,686
Colonial Penn Life
Insurance Company...... $ 500,000 * 13,868 $ 500,000 13,868
Commonwealth Life
Insurance Company...... $ 2,000,000 1.3 55,474 $ 2,000,000 55,474
Delaware Group Dividend
and Income Fund, Inc... $ 1,215,000 * 33,700 $ 1,215,000 33,700
Delaware Group Equity
Fund I, Inc............ $ 65,000 * 1,802 $ 65,000 1,802
Delaware Group Global
Dividend and Income
Fund, Inc.............. $ 610,000 * 16,919 $ 610,000 16,919
Delaware Group Premium
Fund, Inc.............. $ 110,000 * 3,051 $ 110,000 3,051
Deutsche Morgan Grenfell
Inc. (3)............... $18,185,000 12.1 505,303(4) $18,185,000 504,403
Dunham & Associates Fund
II..................... $ 45,000 * 1,248 $ 45,000 1,248
Dunham & Associates Fund
III.................... $ 16,000 * 443 $ 16,000 443
Engineers Joint Pension
Fund................... $ 235,000 * 6,518 $ 235,000 6,518
FJH Absolute Return
Fund, L.P.............. $ 300,000 * 8,321 $ 300,000 8,321
Gleneagles Fund Co...... $ 500,000 * 13,868 $ 500,000 13,868
Hamilton Partners
Limited................ $ 8,000,000 5.3 221,898 $ 8,000,000 221,898
Infinity Investors
Limited................ $ 4,500,000 3.0 124,817 $ 4,500,000 124,817
Merrill Lynch
International Ltd...... $ 4,000,000 2.7 110,949 $ 4,000,000 110,949
Natwest Securities
Limited................ $ 5,000,000 3.3 138,686 $ 5,000,000 138,686
Nicholas Applegate
Income & Growth Fund... $ 2,201,000 1.5 61,049 $ 2,201,000 61,049
Nomura Securities
(Bermuda) Ltd.......... $ 6,000,000 4.0 166,423 $ 6,000,000 166,423
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NOTES BENEFICIALLY OWNED
----------------------------------
NUMBER OF PRINCIPAL NUMBER OF
PRINCIPAL SHARES OF AMOUNT OF SHARES OF
AMOUNT OF COMMON NOTES BEING COMMON STOCK
NAME NOTES PERCENTAGE STOCK (1)(2) OFFERED BEING OFFERED
- ---- ---------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Palladin Overseas Fund
Ltd.................... $ 500,000 * 13,868 $ 500,000 13,868
Palladin Partners I.
L.P.................... $ 500,000 * 13,868 $ 500,000 13,868
Retail Clerks Pension
Plan................... $1,000,000 * 27,737 $1,000,000 27,737
Royal Bank of Canada
Trust Company (Jersey)
Limited................ $ 350,000 * 9,708 $ 350,000 9,708
San Diego City
Retirement............. $ 640,000 * 17,751 $ 640,000 17,751
San Diego County
Convertibles........... $1,959,000 1.3 54,337 $1,959,000 54,337
Shepherd Investments
International Ltd...... $2,250,000 1.5 62,408 $2,250,000 62,408
Societe Generale Secs.
Corp................... $7,800,000 5.2 216,350 $7,800,000 216,350
Spear, Leeds & Kellogg.. $1,000,000 * 27,737 $1,000,000 27,737
Stark International..... $2,250,000 1.5 62,408 $2,250,000 62,408
Swiss Bank Corporation.. $2,000,000 1.3 55,474 $2,000,000 55,474
Wake Forest University.. $ 477,000 * 13,230 $ 477,000 13,230
</TABLE>
- --------
* Less than 1%.
(1) Assumes conversion of the full amount of Notes held by such holder at the
initial rate of $36.0525 in principal amount of Notes per share of Common
Stock; such conversion price is subject to adjustment as described under
"Description of Notes--Conversion." Under the terms of the Indenture,
fractional shares will not be issued upon conversion of the Notes; cash
will be paid in lieu of any fractional shares.
(2) The number of Shares held by each Selling Securityholder named herein is
less than 1% of the Company's outstanding Common Stock as of March 12,
1998.
(3) Deutsche Morgan Grenfell served as the sole placement agent for the
December 1997 offering of the Notes.
(4) Includes 900 shares of Common Stock of the Company owned by Deutsche
Morgan Grenfell unrelated to the Notes.
The Selling Securityholders identified above may have sold, transferred or
otherwise disposed of, in transactions exempt from the registration
requirements of the Securities Act, all or a portion of their Notes since the
date on which the information in the preceding table is presented. Information
concerning the Selling Securityholders may change from time to time and will
be set forth in Prospectus supplements, if and when necessary. In addition,
the per share conversion price and, therefore, the number of Shares are
subject to adjustment under certain circumstances. Accordingly, the number of
Shares offered hereby may increase or decrease. As of the date of the
Prospectus, the aggregate principal amount of Notes is $150,000,000 and the
aggregate number of Shares into which the Notes may be converted is
approximately 4,160,600 shares.
DESCRIPTION OF NOTES
The Notes were issued under an Indenture dated as of December 15, 1997 (the
"Indenture"), between the Company and American National Bank and Trust Company
of Chicago, N.A., as trustee (the "Trustee"). The Indenture (and the form of
Note which is a part thereof) and the Registration Rights Agreement (as
defined below) have been filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following summaries of certain provisions
of the Notes, the Indenture and the Registration Rights Agreement 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 Notes, the Indenture and the
Registration Rights Agreement. Wherever particular provisions or defined terms
of the Indenture (or the form of Note which is a part thereof) or the
Registration Rights Agreement are referred to, such provisions or defined
terms are incorporated herein by reference. References in this section to the
"Company" are solely to PLATINUM technology, inc., a Delaware corporation, and
not its subsidiaries.
10
<PAGE>
GENERAL
The Notes are unsecured subordinated obligations of the Company, limited to
$150,000,000 aggregate principal amount and will mature on December 15, 2002,
unless redeemed at the option of the Company or repurchased by the Company at
the option of the holder upon a Designated Event (as defined herein). The
Notes bear interest at the rate of 6.25% per annum, payable semi-annually on
June 15 and December 15 of each year, commencing on June 15, 1998, to the
persons in whose names such Notes are registered at the close of business on
June 1 or December 1, immediately preceding such Interest Payment Date.
Interest is calculated on the basis of a 360-day year consisting of twelve 30-
day months. The Notes are subordinate in right of payment to certain other
obligations of the Company as described under "--Subordination," and
convertible into Common Stock as described under "--Conversion."
The Company maintains an office or agency where Notes may be presented for
payment (a "Paying Agent"), registration (a "Registrar") or conversion (a
"Conversion Agent") in the City of New York, New York. The Company initially
designated the Trustee at its office presently located at 14 Wall Street, New
York, New York 10005, to serve as its agent for such purposes.
At the option of the Company, payment of interest may be made by check
mailed to the holders of the Notes (individually, a "Holder" and,
collectively, the "Holders") at the addresses set forth upon the registry
books of the Registrar. No service charge is made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Notes are convertible into Common Stock at the conversion price stated
on the cover page hereof, subject to adjustment upon the occurrence of certain
events described under "--Conversion," at any time prior to the close of
business on the maturity date, unless previously redeemed or repurchased.
The Notes are redeemable at the option of the Company (a) in the event of
certain developments involving withholding taxes of the U.S. as described
below under "--Redemption--Redemption for Taxation Reasons" at a redemption
price of 100% of the principal amount of the Notes to be redeemed, plus
accrued interest to, but excluding, the Redemption Date (as defined), and any
Additional Amounts then payable and (b) under the circumstances and at the
redemption prices set forth below under "Redemption--Optional Redemption,"
plus accrued interest to, but excluding, the Redemption Date, and any
Additional Amounts then payable.
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends by the Company, the incurrence of indebtedness,
including Senior Indebtedness (as defined), by the Company or the issuance or
repurchase of securities by the Company. The Indenture does not contain any
covenants or other provisions to afford protection to Holders of the Notes in
the event of a highly leveraged transaction or a change in control of the
Company except to the extent described below under "--Repurchase at Option of
Holders Upon a Change of Control."
BOOK ENTRY, DELIVERY AND FORM
The Notes were issued in fully registered form, without coupons, in
denominations of $1,000 principal amount and integral multiples thereof.
Global Note, Book-Entry Form. Notes held by "qualified institutional buyers"
("QIBs") are evidenced by a global Note (the "144A Global Note"), which are
deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), and registered in the name of Cede & Co. ("Cede") as DTC's
nominee.
Notes held by persons who acquired such Notes in compliance with Regulation
S under the Securities Act (a "Non-U.S. Person") are evidenced by a global
Note (the "Regulation S Global Note"), which is deposited with, or on behalf
of, DTC and registered in the name of Cede as DTC's nominee, for the accounts
of Morgan Guaranty Trust Company of New York, Brussels office, as operator of
the Euroclear System ("Euroclear") and Cedel, S.A. ("Cedel"). Beneficial
interests in the Regulation S Global Note may only be held through Euroclear
11
<PAGE>
or Cedel, and any resale or transfer of such interests to U.S. persons is
subject to certain restrictions. The 144A Global Note and the Regulation S
Global Note are hereinafter collectively referred to as the Global Note.
Except as set forth below, the Global Note may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee.
QIBs may hold their interests in the 144A Global Note directly through DTC
or indirectly through organizations which are participants in DTC
("Participants"). Transfers between Participants are effected in the ordinary
way in accordance with DTC rules and are settled in same-day funds. Non-U.S.
Persons may hold their interest in the Regulation S Global Note directly
through Cedel or Euroclear, or indirectly through organizations that are
participants in Cedel or Euroclear (the "Cedel Participants" and the
"Euroclear Participants"). Cedel and Euroclear hold interests in the
Regulation S Global Note on behalf of Cedel Participants and Euroclear
Participants through DTC. Transfers between participants in Euroclear and
Cedel are effected in the ordinary way in accordance with their respective
rules and operating procedures. The laws of some states require that certain
persons take physical delivery of securities in definitive form. Consequently,
the ability to transfer beneficial interests in the Global Note to such
persons may be limited.
QIBs and Non-U.S. Persons who are not Participants may beneficially own
interests in the Global Note held by DTC only through Participants, including
Euroclear and Cedel, or certain banks, brokers, dealers, trust companies and
other parties that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants"). So long
as Cede, as the nominee of DTC, is the registered owner of the Global Note,
Cede for all purposes will be considered the sole holder of the Global Note
for all purposes under the Indenture. Except as provided below and except in
certain limited circumstances as provided in the Indenture, owners of
beneficial interests in the Global Note are not entitled to have certificates
registered in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form, and are not considered holders
thereof under the Indenture for any purpose, including with respect to the
giving of any directions, instructions or approvals to the Trustee thereunder.
Payment of interest on and principal of and the redemption price or
repurchase price of the Global Note is made to Cede, the nominee for DTC, as
the registered owner of the Global Note, by wire transfer of immediately
available funds on each relevant payment date. Neither the Company nor the
Trustee (nor any Registrar, Paying Agent or Conversion Agent under the
Indenture) has any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the Global Note, including for any delay by DTC or any Participant or Indirect
Participant in identifying the beneficial owners of the Notes, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests, and the Company and the Trustee may conclusively rely on,
and are protected in relying on, instructions from DTC for all purposes.
The Company has been informed by DTC that, with respect to any payment of
interest on, principal of, or the redemption price or repurchase price of, the
Global Note, DTC's practice is to credit Participants' accounts on the payment
date therefor with payments in amounts proportionate to their respective
beneficial interests in the Notes represented by the Global Note, as shown on
the records of DTC (adjusted as necessary so that such payments are made with
respect to whole Notes only), unless DTC has reason to believe that it will
not receive payment on such payment date. Payments by Participants to owners
of beneficial interests in Notes represented by the Global Note held through
such Participants will be the responsibility of such Participants, as is now
the case with securities held for the accounts of customers registered in
"street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the Global
Note to pledge such interest to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such interest, may be
affected by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any Note Registrar, Paying Agent or
Conversion Agent under the Indenture) have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC advised the Company that
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<PAGE>
it will take any action permitted to be taken by a holder of Notes (including,
without limitation, the presentation of Notes for exchange as described below)
only at the direction of one or more Participants to whose account with DTC
interests in the Global Note are credited and only in respect of the principal
amount of the Notes represented by the Global Note as to which such
Participant or Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes to accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Initial Purchasers. Certain of such
Participants (or their representatives), together with other entities, own
DTC. Indirect access to the DTC system is available to others such as banks,
brokers, dealers and trust companies that clear through, or maintain a
custodial relationship with, a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among Participants, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will cause the Notes to be issued
in definitive form in exchange for the Global Note.
Certificated Notes. Notes sold to investors that are neither QIBs nor Non-
U.S. Persons were issued in definitive registered form and may not be
represented by the Global Note. In addition, certificated Notes may be issued
in exchange for Notes represented by the Global Note if no successor
depositary is appointed by the Company as set forth above and as described in
the Indenture.
Restrictions on Transfer; Legends. The Notes are subject to certain transfer
restrictions as described in the Indenture and certificates evidencing the
Notes bear a legend to such effect.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable. The
Company will have no responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective obligations.
CONVERSION
The Holders of the Notes have the right, at the Holder's option, to convert
any portion of the principal amount thereof that is an integral multiple of
$1,000 into shares of Common Stock, at any time prior to the close of business
on the Stated Maturity of the Notes (unless earlier redeemed or repurchased)
at the conversion price set forth on the cover page of this Prospectus
(subject to adjustment as described below). The right to convert a Note called
for redemption or delivered for repurchase will terminate at the close of
business on the Business Day prior to the Redemption Date or Repurchase Date
for such Note, unless the Company subsequently fails to pay the applicable
Redemption Price or Repurchase Price, as the case may be.
In the case of any Note that has been converted after any Record Date, but
on or before the next Interest Payment Date, interest the stated due date of
which is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid
to the Holder of such Note who is a Holder on such Record Date. Any Note so
converted must be accompanied by payment of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Notes being
surrendered for conversion (unless such Note shall have been called for
redemption, in which case no such payment shall be required). In all cases,
the Holders will receive the interest payment due on December 15, 2000, even
if they surrender Notes for conversion as a result of the Company's exercise
of its right to redeem Notes on
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<PAGE>
or after December 15, 2000. No fractional shares will be issued upon
conversion but, in lieu thereof, an appropriate amount will be paid in cash by
the Company based on the market price of the Common Stock (as determined in
accordance with the Indenture) at the close of business on the day of
conversion.
The Conversion Price is subject to adjustment upon the occurrence of certain
events, including: (a) any payment of a dividend (or other distribution)
payable in Common Stock on any class of Capital Stock of the Company, (b) any
issuance to all holders of Common Stock of rights, options or warrants
entitling them to subscribe for or purchase Common Stock at less than the then
current market price (as determined in accordance with the Indenture) of
Common Stock; provided, however, that if such options or warrants are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur, (c)
any subdivision, combination or reclassification of Common Stock, (d) any
distribution to all holders of Common Stock of evidences of indebtedness,
shares of Capital Stock other than Common Stock, cash or other assets
(including securities, but excluding those dividends, rights, options,
warrants and distributions referred to above and excluding dividends and
distributions paid exclusively in cash), (e) any distribution consisting
exclusively of cash (excluding any cash portion of distributions referred to
in (d) above, or cash distributed upon a merger or consolidation to which the
last paragraph of this section "--Conversion" applies) to all holders of
Common Stock in an aggregate amount that, combined together with (i) all other
such all-cash distributions made within the then preceding 12 months in
respect of which no adjustment has been made and (ii) any cash and the fair
market value of other consideration paid or payable in respect of any tender
offer by the Company or any of its Subsidiaries for Common Stock concluded
within the preceding 12 months in respect of which no adjustment has been
made, exceeds 10% of the Company's market capitalization (defined as being the
product of the then current market price of the Common Stock times the number
of shares of Common Stock then outstanding) on the record date of such
distribution, and (f) the completion of a tender or exchange offer made by the
Company or any of its Subsidiaries for Common Stock that involves an aggregate
consideration that, together with (i) any cash and other consideration payable
in a tender or exchange offer by the Company or any of its Subsidiaries for
Common Stock expiring within the 12 months preceding the expiration of such
tender or exchange offer in respect of which no adjustment has been made and
(ii) the aggregate amount of any such all-cash distributions referred to in
(e) above to all holders of Common Stock within the 12 months preceding the
expiration of such tender or exchange offer in respect of which no adjustments
have been made, exceeds 10% of the Company's market capitalization on the
expiration of such tender offer. No adjustment of the Conversion Price will be
required to be made until the cumulative adjustments amount to 1.0% or more of
the Conversion Price as last adjusted.
The Company reserves the right to make such reductions in the Conversion
Price in addition to those required in the foregoing provisions as it
considers to be advisable. In the event the Company elects to make such a
reduction in the Conversion Price, the Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder if and to the extent that such laws and
regulations are applicable in connection with the reduction of the Conversion
Price.
In the event that the Company distributes rights or warrants (other than
those referred to in (b) in the second paragraph above) pro rata to holders of
Common Stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, the Holder of any Note surrendered for conversion
will be entitled to receive upon such conversion, in addition to the shares of
Common Stock issuable upon such conversion (the "Conversion Shares"), a number
of rights or warrants to be determined as follows: (i) if such conversion
occurs on or prior to the date for the distribution to the holders of rights
or warrants of separate certificates evidencing such rights or warrants (the
"Distribution Date"), the same number of rights or warrants to which a holder
of a number of shares of Common Stock equal to the number of Conversion Shares
is entitled to at the time of such conversion in accordance with the terms and
provisions of an applicable to the rights or warrants, and (ii) if such
conversion occurs after such Distribution Date, the same number of rights or
warrants to which a holder of the number of shares of Common Stock into which
such Note was convertible immediately prior to such Distribution Date would
have been entitled on such Distribution Date in accordance with the terms and
provisions of and applicable to the rights or warrants. The Conversion Price
of the Notes will not be subject to adjustment on account of any declaration,
distribution or exercise of such rights or warrants.
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<PAGE>
Under the terms of the Rights Agreement between the Company and Harris Trust
and Savings Bank (the "Rights Agreement"), upon conversion of any Notes prior
to the redemption or expiration of the right (a "Right") to purchase from the
Company, for each share of Common Stock owned, one one-hundredth of a share of
the Company's Class II Series A Junior Participating Preferred Stock, par
value $.01 per share (the "Preferred Rights Shares"), at a price of $125.00
per one one-hundredth of a Preferred Rights Share, the holders of such Notes
will receive, subject to certain limited conditions, an appropriate number of
Rights with respect to the shares of Common Stock issued upon such conversion.
In addition, the Indenture provides that if the Company amends the Rights
Agreement or implements a replacement or successor stockholders' rights plan,
such rights plan must provide that upon conversion of the Notes the Holders
will receive, in addition to the Common Stock issuable upon such conversion,
such rights whether or not such rights have separated from the Common Stock at
the time of such conversion.
In case of any reclassification, consolidation or merger of the Company with
or into another person or any merger of another person with or into the
Company (with certain exceptions), or in case of any sale, transfer or
conveyance of all or substantially all of the assets of the Company (computed
on a consolidated basis), each Note then outstanding will, without the consent
of any Holder of Notes, become convertible only into the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or conveyance by a holder of the number
of shares of Common Stock into which such Note was convertible immediately
prior thereto, after giving effect to any adjustment event, assuming such
holder of Common Stock failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-
electing shares.
SUBORDINATION
The Notes are unsecured general obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness of the
Company. As of February 28, 1998, there was approximately $35.9 million of
Senior Indebtedness outstanding. The Notes are effectively subordinated in
right of payment to all liabilities (including trade payables) of the
Company's Subsidiaries. The Company's Subsidiaries had approximately $76.6
million of indebtedness and other liabilities outstanding (excluding
intercompany liabilities) at February 28, 1998. The Indenture does not
restrict the incurrence of Senior Indebtedness or other indebtedness by the
Company or its Subsidiaries.
The Indenture provides that no payment may be made by the Company on account
of the principal of, premium, if any, and interest (including any Additional
Amounts) on the Notes, or to acquire any of the Notes (including repurchases
of Notes at the option of the Holder) for cash or property (other than Junior
Securities), or on account of the redemption provisions of the Notes, (i) upon
the maturity of any Senior Indebtedness of the Company by lapse of time,
acceleration (unless waived) or otherwise, unless and until all principal of,
premium, if any, and interest on such Senior Indebtedness are first paid in
full (or such payment is duly provided for), or (ii) in the event of default
in the payment of any principal of, premium, if any, or interest on any Senior
Indebtedness of the Company when it becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise (a
"Payment Default"), unless and until such Payment Default has been cured or
waived or otherwise has ceased to exist.
Upon (i) the happening of an event of default (other than a Payment Default)
that permits the holders of Designated Senior Indebtedness or their
representative immediately to accelerate its maturity and (ii) written notice
of such event of default given to the Company and the Trustee by the holders
of an aggregate of at least $5,000,000 principal amount outstanding of such
Designated Senior Indebtedness or their representative (a "Payment Notice"),
then, unless and until such event of default has been cured or waived or
otherwise has ceased to exist, no payment (by setoff or otherwise) may be made
by or on behalf of the Company on account of the principal of, premium, if
any, or interest or Additional Amounts on the Notes, or to acquire or
repurchase any of the Notes for cash or property, or on account of the
redemption provisions of the Notes, in any such case other than payments made
with Junior Securities of the Company. Notwithstanding the foregoing, unless
(i) the Designated Senior Indebtedness in respect of which such event of
default exists has been declared due and
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<PAGE>
payable in its entirety within 179 days after the Payment Notice is delivered
as set forth above (the "Payment Blockage Period"), and (ii) such declaration
has not been rescinded or waived, at the end of the Payment Blockage Period,
the Company shall be required to pay all sums not paid to the Holders of the
Notes during the Payment Blockage Period due to the foregoing prohibitions and
to resume all other payments as and when due on the Notes. Any number of
Payment Notices may be given; provided, however, that (i) not more than one
Payment Notice shall be given within a period of any 360 consecutive days, and
(ii) no default that existed upon the date of such Payment Notice or the
commencement of such Payment Blockage Period (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) shall be made
the basis for the commencement of any other Payment Blockage Period.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be held in trust for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders, as the case may be, to the holders of the Senior Indebtedness of
the Company remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness of the
Company may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
of the Company remaining unpaid, to the extent necessary to pay or to provide
for the payment of all such Senior Indebtedness in full, after giving effect
to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
Upon any distribution of assets of the Company upon any dissolution, winding
up, total or partial liquidation or reorganization of the Company, whether
voluntary or involuntary, in bankruptcy, insolvency, receivership or a similar
proceeding or upon assignment for the benefit of creditors or any marshaling
of assets or liabilities, (i) the holders of all Senior Indebtedness of the
Company will first be entitled to receive payment in full (or have such
payment duly provided for) before the Holders are entitled to receive any
payment on account of the principal of, premium, if any, interest or
Additional Amounts on, or with respect to, the Notes (other than Junior
Securities) and (ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
Junior Securities) to which the Holders or the Trustee on behalf of the
Holders would be entitled (by setoff or otherwise), except for the
subordination provisions contained in the Indenture, will be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of Senior Indebtedness of the Company or
their representative to the extent necessary to make payment in full of all
such Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
No provision contained in the Indenture or the Notes affects the obligation
of the Company, which is absolute and unconditional, to pay, when due,
principal of, premium, if any, and interest on the Notes. The subordination
provisions of the Indenture and the Notes do not prevent the occurrence of any
Default or Event of Default under the Indenture or limit the rights of the
Trustee or any Holder, subject to the two preceding previous paragraphs, to
pursue any other rights or remedies with respect to the Notes.
The Company conducts certain of its operations through its Subsidiaries.
Accordingly, the Company's ability to meet its cash obligations is dependent
upon the ability of its Subsidiaries to make cash distributions to the
Company. The ability of its Subsidiaries to make distributions to the Company
is and will continue to be restricted by, among other limitations, applicable
provisions of the laws of national and state governments and contractual
provisions. The Indenture does not limit the ability of the Company's
Subsidiaries to incur such restrictions in the future. The right of the
Company to participate in the assets of any Subsidiary (and thus the ability
of Holders of the Notes to benefit indirectly from such assets) is generally
subject to the prior claims of creditors, including trade creditors, of that
Subsidiary except to the extent that the Company is recognized as a creditor
of such Subsidiary, in which case the Company's claims would still be subject
to any security interest of other creditors of such Subsidiary. The Notes,
therefore, are structurally subordinated to creditors, including trade
creditors, of Subsidiaries of the Company with respect to the assets of the
Subsidiaries against which such creditors have a claim.
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<PAGE>
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Company or
any of its Subsidiaries or a marshaling of assets or liabilities of the
Company and its Subsidiaries, Holders of the Notes may receive ratably less
than other creditors. See "Risk Factors--Subordination; Company Structure;
Subsidiary Cash Flow."
REDEMPTION
Optional Redemption
The Notes are not subject to redemption prior to December 15, 2000.
Thereafter, the Notes are redeemable at the option of the Company, in whole or
in part, at any time on or after December 15, 2000 upon not less than 30 nor
more than 60 days' notice to each Holder of the Notes, at the following
redemption prices (expressed as percentages of the principal amount) if
redeemed during the 12-month period commencing December 15 of the years
indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2000.............................. 102.50%
2001 and thereafter............... 101.25
</TABLE>
in each case (subject to the right of Holders of record on a Record Date to
receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date), together with accrued and unpaid interest and Additional
Amounts, if any, to the Redemption Date.
In the case of a partial redemption, the Trustee shall promptly redeem the
Notes or portions thereof which are to be redeemed on a pro rata basis or in
such other manner it deems appropriate and fair and in such manner as complies
with any applicable depositary, legal and stock exchange requirements. The
Notes may be redeemed in part in integral multiples of $1,000 only.
The Notes do not have the benefit of any sinking fund.
Notice of any redemption will be sent, by first-class mail, at least 30 days
and not more than 60 days prior to the date fixed for redemption, to the
Trustee and each Holder of Notes to be redeemed to such Holder's last address
as then shown upon the registry books of the Registrar. The notice of
redemption must state the Redemption Date, the Redemption Price, the amount of
accrued interest to be paid and that the Notes called for redemption may not
be converted after the fifth Business Day prior to the Redemption Date. Any
notice that relates to a Note to be redeemed only in part must state the
portion of the principal amount to be redeemed and must state that on and
after the Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued. On
and after the Redemption Date, interest will cease to accrue on the Notes or
portions thereof called for redemption, unless the Company defaults in its
obligations with respect thereto.
Redemption for Taxation Reasons
If, as a result of any change in, or amendment to, the laws or regulations
prevailing in the United States or any political subdivision or taxing
authority thereof or therein, which change or amendment becomes effective on
or after the date of this Prospectus or as a result of any application or
official interpretation of such laws or regulations not generally known before
that date (a "Tax Law Change") the Company is or would be required on the next
succeeding Interest Payment Date to pay Additional Amounts (as defined), and
such requirement or obligation cannot be avoided by the Company taking
reasonable measures available to it, the Company may redeem the affected Notes
in whole, but not in part, at any time, on giving not less than 20 days'
notice, at a redemption price equal to 100% of the principal amount thereof
plus accrued interest to, but excluding, the Redemption Date and any
Additional Amounts then payable, provided that no such notice of redemption
shall be given earlier than 90 days prior to the earliest date on which the
Company would be obligated to withhold or pay Additional Amounts were a
payment in respect of the Notes then made.
Prior to the publication of any notice of redemption with respect to a Tax
Law Change, the Company shall deliver to the Trustee (a) a certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have
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<PAGE>
occurred and (b) an opinion of counsel selected by the Company and reasonably
acceptable to the Trustee, to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of a Tax Law Change. The
Company's right to redeem the affected Notes shall continue as long as the
Company is obligated to pay Additional Amounts, notwithstanding that the
Company shall have theretofore made payments of Additional Amounts.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will pay to a Non-U.S. Holder (as defined in "Certain United
States Federal Income Tax Considerations" below) of any Note such additional
amounts ("Additional Amounts") as may be necessary in order that every net
payment of the principal of, premium, if any, and interest on such Note, after
deduction or withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment
by the United States or any political subdivision or taxing authority thereof
or therein, will not be less than the amount provided for in such Note to be
then due and payable; provided however, that the foregoing obligation to pay
Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would not have
been so imposed but for (i) the existence of any present or former connection
between such Non-U.S. Holder (or between a fiduciary, settlor, beneficiary,
member, shareholder of or possessor of a power over such Non-U.S. Holder, if
such Non-U.S. Holder is a trust, an estate, a partnership or a corporation)
and the United States or any political subdivision or taxing authority thereof
or therein, including, without limitation, such Non-U.S. Holder (or such
fiduciary, settlor, beneficiary, member, shareholder or possessor) being or
having been a citizen, domiciliary or resident of the United States or treated
as a resident thereof, or being or having been engaged in trade or business or
present therein, or having or having had a permanent establishment therein; or
(ii) such Non-U.S. Holder's present or former status as a personal holding
company, a foreign personal holding company with respect to the United States,
a controlled foreign corporation, a passive foreign investment company, or a
foreign private foundation or foreign tax exempt entity for United States tax
purposes, or a corporation which accumulates earnings to avoid United States
federal income tax;
(b) any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the Non-U.S. Holder of such Notes
for payment on a date more than 15 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with any certification,
identification or other reporting requirement concerning the nationality,
residence, identity or connection with the United States of such Non-U.S.
Holder (or beneficial owner of such Note), if compliance is required or
imposed by a statute, treaty, regulation or administrative practice of the
United States or any political subdivision or taxing authority thereof or
therein as a precondition to exemption from all or part of such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of,
premium, if any, or interest on such Note;
(f) any tax, assessment or other governmental charge imposed on interest
received by a Non-U.S. Holder actually or constructively holding 10% or more
of the total combined voting power of all classes of stock of the Company
entitled to vote;
(g) any tax, assessment or other governmental charge imposed on a Non-U.S.
Holder that is a partnership or a fiduciary or other than the sole beneficial
owner of such payment, but only to the extent that any beneficial
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<PAGE>
owner or member of the partnership or beneficiary or settlor with respect to
the fiduciary would not have been entitled to the payment of Additional
Amounts had the beneficial owner, member, beneficiary or settlor directly been
the holder of the Note; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and (g).
Notwithstanding the foregoing, the Company shall not be obligated to pay
Additional Amounts in respect of payments becoming due on the Notes more than
15 days after the Redemption Date with respect to any redemption of the Notes
described in the first paragraph under "--Redemption--Redemption for Taxation
Reasons" to the extent that the Company's obligation to pay such Additional
Amounts arises from the Tax Law Change that resulted in such redemption.
REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE OF CONTROL
The Indenture provides that in the event that a Change of Control (as
defined) has occurred, each Holder of Notes will have the right, at such
Holder's option, pursuant to an irrevocable and unconditional offer by the
Company (the "Repurchase Offer"), to require the Company to repurchase all or
any part of such Holder's Notes (provided, that the principal amount of such
Notes must be $1,000 or an integral multiple thereof) on the date determined
by the Company (the "Repurchase Date") that is no later than 45 Business Days
after the occurrence of such Change of Control at a cash price equal to 100%
of the principal amount thereof, together with accrued and unpaid interest to
the Repurchase Date and any Additional Amounts then payable (the "Repurchase
Price"). The Repurchase Offer shall be made within 30 Business Days following
a Change of Control event and remain open for 15 Business Days following its
commencement (the "Repurchase Offer Period"). Upon expiration of the
Repurchase Offer Period, the Company shall purchase all Notes tendered in
response to the Repurchase Offer. If required by applicable law, the
Repurchase Date and the Repurchase Offer Period may be extended as so
required; however, if so extended, it shall nevertheless constitute an Event
of Default if the Repurchase Date does not occur within 45 Business Days of
the Change of Control.
The Indenture provides that a "Change of Control" occurs upon the occurrence
of any of the following events: (i) upon any merger or consolidation of the
Company with or into any person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Company, on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction, any
"person" or "group" other than the Company is or becomes the "beneficial
owner," directly or indirectly, of more than 50% of the voting power in the
aggregate normally entitled to vote in the election of directors, managers, or
trustees, as applicable, of the transferee or surviving entity, (ii) when any
"person" or "group" is or becomes the "beneficial owner," directly or
indirectly, of more than 50% of the voting power in the aggregate normally
entitled to vote in the election of directors of the Company, (iii) when,
during any period of 12 consecutive months after the Issue Date, individuals
who at the beginning of any such 12-month period constituted the Board of
Directors of the Company (together with any new directors whose election by
such Board or whose nomination for election by the stockholders of the Company
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office,
or (iv) the pro rata distribution by the Company to its stockholders of
substantially all of its assets.
For purposes of this definition, (i) the terms "person" and "group" shall
have the meaning used for purposes of Rules 13d-3 and 13d-5 under the Exchange
Act as in effect on the Issue Date, whether or not applicable; and (ii) the
terms "beneficial owner" shall have the meaning used in Rules 13d-3 and 13d-5
under the Exchange Act as in effect on the Issue Date, whether or not
applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time or upon the occurrence of certain events.
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On or before the Repurchase Date, the Company will (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Repurchase Offer,
(ii) deposit with the Paying Agent cash sufficient to pay the Repurchase Price
of all Notes so tendered and (iii) deliver to the Trustee Notes so accepted,
together with an Officers' Certificate listing the Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to the
Holders of Notes so accepted payment in an amount equal to the Repurchase
Price, and the Trustee will promptly authenticate and mail or deliver to such
Holders a new Note or Notes equal in principal amount to any unredeemed
portion of the Notes surrendered. Any Notes not so accepted will be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Repurchase Offer on or as soon as
practicable after the Repurchase Date.
The phrase "all or substantially all" of the assets of the Company is likely
to be interpreted by reference to applicable state law at the relevant time,
and will be dependent on the facts and circumstances existing at such time. As
a result, there may be some degree of uncertainty in ascertaining whether a
sale or transfer of "all or substantially all" of the assets of the Company
has occurred.
The Change of Control repurchase feature of the Notes may make more
difficult or discourage a takeover of the Company, and, thus, the removal of
incumbent management. The Change of Control purchase feature resulted from
negotiations between the Company and the Initial Purchaser.
The provisions of the Indenture relating to a Change of Control may not
afford the Holders protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger, spin-off or similar transaction that
may adversely affect Holders, if such transaction does not constitute a Change
of Control, as set forth above. Further, the right to require the Company to
repurchase Notes as a result of the occurrence of a Change of Control could
create an event of default under Senior Indebtedness as a result of which any
repurchase could, absent a waiver, be blocked by the subordination provisions
of the Notes. In addition, the Company may not have sufficient financial
resources available to fulfill its obligation to repurchase the Notes upon a
Change of Control or to repurchase other debt securities of the Company or its
Subsidiaries providing similar rights to the Holders thereof. See "Risk
Factors--Limitations on Repurchases Upon Change of Control."
To the extent applicable, the Company will comply with Section 14 of the
Exchange Act and the provisions of Regulation 14E and any other tender offer
rules under the Exchange Act and any other securities laws, rules and
regulations that may then be applicable to any offer by the Company to
purchase the Notes at the option of Holders upon a Change of Control.
LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Indenture provides that the Company may not, directly or indirectly,
consolidate with or merge with or into another person or sell, lease, convey
or transfer all or substantially all of its assets (computed on a consolidated
basis), whether in a single transaction or a series of related transactions,
to another person or group of affiliated persons, unless (i) either (a) in the
case of a merger or consolidation, the Company is the surviving entity or (b)
the resulting, surviving or transferee entity is a corporation organized under
the laws of the United States, any state thereof or the District of Columbia
and expressly assumes by supplemental Indenture all of the obligations of the
Company in connection with the Notes and the Indenture; (ii) no Default or
Event of Default shall exist or shall occur immediately before or after giving
effect on a pro forma basis to such transaction; (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and, if a
supplemental Indenture is required, such supplemental Indenture comply with
the Indenture and that all conditions precedent relating to such transactions
have been satisfied; and (iv) the resulting, surviving or transferee entity,
unless it is a Subsidiary (as defined in the Indenture), immediately
thereafter has a consolidated net worth not less than that of the Company
immediately prior thereto.
Upon any consolidation or merger or any transfer of all or substantially all
of the assets of the Company in accordance with the foregoing, the successor
corporation formed by such consolidation or into which the Company is merged
or to which such transfer is made (the "Successor Corporation") shall succeed
to, and be
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substituted for, and may exercise every right and power of, the Company under
the Indenture with the same effect as if such successor corporation had been
named therein as the Company, and the Company will be released from its
obligations under the Indenture and the Notes, except as to any obligations
that arise from or as a result of such transaction; provided, however, that if
the Successor Corporation is a Subsidiary, the consolidated net worth of which
is less than that of the Company immediately prior to such merger,
consolidation, sale, lease, conveyance or transfer, the Company shall not be
released from such obligations but shall remain jointly and severally liable
therefor with the Successor Corporation.
REPORTS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder, within 30 days after it is or would have been
required to file such with the Commission, annual and quarterly consolidated
financial statements substantially equivalent to financial statements that
would have been included in reports filed with the Commission if the Company
was subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required
in such reports to the Commission and, in each case, together with a
management's discussion and analysis of results of operations and financial
condition as such would be so required.
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the Company
to pay any installment of interest on, or Additional Amounts with respect to,
the Notes as and when due and payable and the continuance of any such failure
for 30 days, (ii) the failure by the Company to pay all or any part of the
principal of, or premium, if any, on the Notes when and as the same become due
and payable at maturity, redemption, by acceleration or otherwise, including,
without limitation, pursuant to any Repurchase Offer or otherwise, (iii) the
failure of the Company to perform any conversion of any Notes required under
the Indenture and the continuance of any such failure for 30 days, (iv) the
failure by the Company to observe or perform any other covenant or agreement
contained in the Notes or the Indenture and, subject to certain exceptions,
the continuance of such failure for a period of 60 days after written notice
is given to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Notes
outstanding, (v) certain events of bankruptcy, insolvency or reorganization in
respect of the Company or any of its Significant Subsidiaries, and (vi) a
default in the payment of principal at maturity, or an acceleration for any
other reason of the maturity, of Indebtedness of the Company or any of its
Subsidiaries in the principal amount, individually or in the aggregate, of in
excess of $25,000,000. The Indenture provides that if a Default occurs and is
continuing, the Trustee must, within 90 days after the occurrence of such
Default, give to the Holders notice of such Default.
The Indenture provides that if an Event of Default occurs and is continuing
(other than an Event of Default specified in clause (v) above), then in every
such case, unless the principal of all of the Notes shall have already become
due and payable, either the Trustee or the Holders of 25% in aggregate
principal amount of the Notes then outstanding, by notice in writing to the
Company (and to the Trustee if given by Holders) (an "Acceleration Notice"),
may declare all principal and accrued interest and Additional Amounts thereon
to be due and payable immediately. If an Event of Default specified in clause
(v) above occurs, all principal and accrued interest thereon will be
immediately due and payable on all outstanding Notes without any declaration
or other act on the part of the Trustee or the Holders. The Holders of not
less than a majority in aggregate principal amount of Notes generally are
authorized to rescind such acceleration if all existing Events of Default,
other than the nonpayment of the principal of, premium, if any, and interest
on, the Notes that have become due solely by such acceleration, have been
cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any Default, except a
default in the payment of principal of, premium, if any, or interest on any
Note not yet cured, or a default with
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respect to any covenant or provision that cannot be modified or amended
without the consent of the Holder of each outstanding Note affected. Subject
to the provisions of the Indenture relating to the duties of the Trustee, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any of the Holders,
unless such Holders have offered to the Trustee reasonable security or
indemnity. Subject to all provisions of the Indenture and applicable law, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee.
AMENDMENTS AND SUPPLEMENTS
The Indenture contains provisions permitting the Company and the Trustee to
enter into a supplemental indenture for certain limited purposes without the
consent of the Holders, including to make such changes as are necessary to
qualify the Notes for listing for trading on the Luxembourg Stock Exchange
(such as the addition of Luxembourg related notice requirements and the
addition of a Luxembourg registrar, paying agent and conversion agent). With
the consent of the Holders of not less than a majority in aggregate principal
amount of the Notes at the time outstanding, the Company and the Trustee are
permitted to amend or supplement the Indenture or any supplemental indenture
or modify the rights of the holders; provided, further, that no such
modification may, without the consent of each Holder affected thereby: (i)
change the Stated Maturity of any Note or reduce the principal amount thereof
or the rate (or extend the time for payment) of interest therein or any
premium payable upon the redemption thereof, or change the obligation of the
Company to pay Additional Amounts in a manner adverse to the Holders or change
the place of payment where, or the coin or currency in which, any Note or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment or the conversion of any Note on
or after the due date thereof (including, in the case of redemption, on or
after the Redemption Date), or reduce the Repurchase Price, or alter the
change of control provisions or redemption provisions in a manner adverse to
the Holders; (ii) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for any such amendment,
supplemental indenture or waiver provided for in the Indenture; (iii)
adversely affect the right of such Holder to convert Notes; or (iv) modify any
of the waiver provisions, except to increase any required percentage or to
provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note affected
thereby.
NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES
The Indenture provides that no stockholder, employee, officer or director,
as such, past, present or future of the Company or any successor corporation
shall have any personal liability in respect of the obligations of the Company
under the Indenture or the Notes by reason of his or its status as such
stockholder, employee, officer or director.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange the Notes in accordance with the
Indenture. The Company may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents, and to pay any taxes and fees
required by law or permitted by the Indenture. The Company is not required to
transfer or exchange any Notes selected for redemption. Also, the Company is
not required to transfer or exchange any Notes for a period of 15 days before
a selection of Notes to be redeemed.
The registered Holder of a Note may be treated as the owner of it for all
purposes.
GOVERNING LAW
The Indenture, the Notes and the Registration Rights Agreement are governed
by and construed in accordance with the laws of the State of New York, United
States of America.
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SAME-DAY FUNDS SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect to the Notes represented by
the Global Notes (including principal, premium, if any, and interest and
Additional Amounts) be made by wire transfer of immediately available funds to
the accounts specified by DTC. With respect to Notes represented by
Certificated Notes, the Company will make all payments of principal, premium,
if any, and interest, by mailing a check to each such Holder's registered
address. The Notes trade in DTC's Same-Day Funds Settlement System until
maturity, or until the Notes are issued in certificated form, and secondary
market trading activity in the Notes will therefore be required by DTC to
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in immediately available funds on trading
activity in the Notes.
REGISTRATION RIGHTS
The Company entered into a registration rights agreement with the Initial
Purchasers (the "Registration Rights Agreement") pursuant to which the Company
is required, at the Company's expense for the benefit of the Holders of the
Notes and the Common Stock issuable upon conversion thereof (together, the
"Registrable Securities"), to (i) use its reasonable efforts to file with the
Commission within 90 days after the date of original issuance of the Notes, a
registration statement (the "Shelf Registration Statement") covering resales
of the Registrable Securities, (ii) use its reasonable efforts to cause the
Shelf Registration Statement to be declared effective under the Securities Act
within 180 days after the date of original issuance of the Notes and (iii) use
its reasonable efforts to keep effective the Shelf Registration Statement
until the second anniversary of the last date of original issuance of Notes or
such earlier date as all Registrable Securities shall have been disposed of or
on which all Registrable Securities held by Persons that are not affiliates of
the Company may be resold without registration pursuant to Rule 144 (k) under
the Securities Act (the "Effectiveness Period"). This Registration Statement
has been filed pursuant to the Company's obligations under the Registration
Rights Agreement. The Company will be permitted to suspend the use of the
prospectus which is part of the Shelf Registration Statement in connection
with the sales of the Registrable Securities during certain periods of time
under certain circumstances relating to pending corporate developments and
certain other events. The Company will provide to each holder of Registrable
Securities copies of the prospectus that is a part of the Shelf Registration
Statement, notify each holder when the Shelf Registration Statement has become
effective and take certain other actions as are required to permit public
resales of the Registrable Securities. A holder of Registrable Securities that
sells such Registrable Securities pursuant to the Shelf Registration Statement
will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement, including certain
indemnification obligations.
If (i) on or prior to 90 days following the date of original issuance of the
Notes a Shelf Registration Statement has not been filed with the Commission or
(ii) on or prior to the 180th day following the date of original issuance of
the Notes, such Shelf Registration Statement is not declared effective (each,
a "Registration Default"), additional interest ("Additional Interest") will
accrue on the affected Notes, from and including the day following such
Registration Default until such time as such Shelf Registration Statement is
filed or such Shelf Registration Statement is declared effective, as the case
may be. Additional Interest will be paid semi-annually in arrears, with the
first semi-annual payment due on the first interest payment date following the
date on which such Additional Interest begin to accrue, and will accrue at a
rate per annum equal to an additional one-quarter of one percent (0.25%) of
the principal amount, to and including the 90th day following such
Registration Default and one-half of one percent (0.50%) thereof from and
after the 91st day following such Registration Default. In the event that
during the Effectiveness Period the Shelf Registration Statement ceases to be
effective for more than 90 days or the Company suspends the use of the
prospectus which is a part thereof for more than 90 days, whether or not
consecutive, during any 12-month period, then the interest rate borne by
affected Notes will increase by an additional one-half of one percent (0.50%)
per annum from the 91st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective or the Company suspends the use
of the prospectus which is a part thereof, as the case may be, until the
earlier of such time as (i) the Shelf Registration Statement again becomes
effective, (ii) the use of the related prospectus ceases to be
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suspended or (iii) the Effectiveness Period expires. The Company agreed in the
Registration Rights Agreement to use its reasonable efforts to cause such
Common Stock issuable upon conversion of the Notes to be listed on the Nasdaq
National Market or, if the Common Stock is not then listed on the Nasdaq
National Market, to be listed on such exchange or market in the United States
as the Common Stock is then listed, upon effectiveness of the Shelf
Registration Statement.
Notes sold by a selling securityholder pursuant to such Shelf Registration
Statement will be represented by a global Note with a new International
Securities Identification Number ("ISIN"), and any beneficial interests held
in such global Note with such new ISIN through DTC or Euroclear or Cedel will
not be subject to any restrictions on transfer. It is anticipated that the
Notes sold pursuant to such Shelf Registration Statement will be listed on the
Luxembourg Stock Exchange, and will not be listed on any other securities
exchange or automated quotation system inside or outside of the United States.
CERTAIN DEFINITIONS
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Designated Senior Indebtedness" means any particular Senior Indebtedness in
which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is
a party) expressly provides that such Senior Indebtedness shall be "Designated
Senior Indebtedness" for purposes of the Indenture (provided that such
instrument agreement or other document may place limitations and conditions on
the right of such Senior Indebtedness to exercise the rights to Designated
Senior Indebtedness).
"Indebtedness" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of any such person, (i) in respect
of borrowed money (whether or not the recourse of the lender is to the whole
of the assets of such person or only to a portion thereof), (ii) evidenced by
bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except such as would constitute trade payables to trade creditors in the
ordinary course of business, (iv) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks, (v) for the payment of money relating
to a Capitalized Lease Obligation, or (vi) evidenced by a letter of credit or
a reimbursement obligation of such person with respect to any letter of
credit; (b) all net obligations of such person under Interest Swap and Hedging
Obligations; (c) all liabilities of others of the kind described in the
preceding clauses (a) or (b) that such person has guaranteed or that is
otherwise its legal liability and all obligations to purchase, redeem or
acquire any Capital Stock; and (d) any and all deferrals, renewals,
extensions, refinancings and refundings (whether direct or indirect) of any
liability of the kind described in any of the preceding clauses (a), (b) or
(c), or this clause (d), whether or not between or among the same parties.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"Junior Securities" of any person means any Qualified Capital Stock and any
Indebtedness of such person that is subordinated in right of payment to the
Notes and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Notes.
"Senior Indebtedness" means any Indebtedness of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company, unless the
instrument creating or evidencing such Indebtedness provides that such
Indebtedness is not senior or superior
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in right of payment to the Notes or to other Indebtedness which is pari passu
with, or subordinated to, the Notes; provided that in no event shall Senior
Indebtedness include (a) Indebtedness of the Company owed or owing to any
Subsidiary of the Company or any officer, director or employee of the Company
or any Subsidiary of the Company, (b) Indebtedness to trade creditors or (c)
any liability for taxes owed or owing by the Company or (d) any Indebtedness
of the Company with respect to the Company's 6 3/4% Convertible Subordinated
Notes Due 2001.
"Stated Maturity" when used with respect to any Note means December 15,
2002.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1-02(w) of Regulation S-
X promulgated by the Commission as in effect as of the date of the Indenture.
"Subsidiary," with respect to any person, means (i) a corporation a majority
of whose Capital Stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person or by one
or more Subsidiaries of such person, (ii) a partnership in which such person
or a Subsidiary of such person is, at the time, a general partner and owns
alone or together with one or more Subsidiaries of such person a majority of
the partnership interests, or (iii) any other person (other than a corporation
or partnership) in which such person, one or more Subsidiaries of such person,
or such person and one or more Subsidiaries of such person, directly or
indirectly, at the date of determination thereof, has at least a majority
ownership interest.
RELATIONSHIP WITH TRUSTEE
The Company has an unsecured line of credit of $55,000,000 with the Trustee
pursuant to a Loan and Security Agreement dated as of December 22, 1997 (the
"Loan Agreement"). As of December 31, 1997, the Company had no outstanding
borrowings under this line of credit. The Trustee also issues letters of
credit to the Company pursuant to the Loan Agreement. The Company currently
has aggregate letters of credit outstanding for approximately $2,598,000 with
expiration dates ranging from March 1998 through December 1998. The Company
maintains its principal checking account at the Trustee, which also serves as
the Company's primary depositary. The Trustee also provides miscellaneous
other banking and related services to the Company.
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CERTAIN FEDERAL TAX CONSIDERATIONS
The following is a general discussion of certain U.S. federal income tax
considerations relevant to holders of the Notes and Common Stock into which
the Notes may be converted. This discussion is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue
Service ("IRS") rulings and judicial decisions now in effect, all of which are
subject to change (possibly with retroactive effect) or different
interpretations. There can be no assurance that the IRS will not challenge one
or more of the tax consequences described herein, and the Company has not
obtained, nor does it intend to obtain, a ruling from the IRS with respect to
the U.S. federal income tax consequences of acquiring or holding Notes or
Common Stock. This discussion does not purport to deal with all aspects of
U.S. federal income taxation that may be relevant to a particular holder in
light of the holder's circumstances (for example, persons subject to the
alternative minimum tax provisions of the Code). Also, it is not intended to
be wholly applicable to all categories of investors, some of which (such as
dealers in securities, banks, insurance companies, tax-exempt organizations,
and persons holding Notes or Common Stock as part of a hedging or conversion
transaction or straddle or persons deemed to sell Notes or Common Stock under
the constructive sale provisions of the Code) may be subject to special rules.
The discussion also does not discuss any aspect of state, local or foreign
law, or U.S. federal estate and gift tax law as applicable to U.S. holders (as
defined below). In addition, this discussion is limited to original purchasers
of Notes who acquire the Notes at their original issue price within the
meaning of Section 1273 of the Code and who will hold the Notes and Common
Stock as "capital assets" within the meaning of Section 1221 of the Code.
ALL PURCHASERS OF THE NOTES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES AND THE COMMON STOCK.
U.S. HOLDERS
As used herein, the term "U.S. Holder" means the beneficial holder of a Note
or Common Stock that for United States federal income tax purposes is (i) a
citizen or resident (as defined in Section 7701 (b) of the Code) of the United
States, (ii) a corporation, partnership or other entity formed under the laws
of the United States or any political subdivision thereof, (iii) an estate the
income of which is subject to U.S. federal income taxation regardless of its
source, (iv) in general, a trust subject to the primary supervision of a court
within the United States and the control of a United States person as
described in Section 7701 (a) (30) of the Code and (v) any other person whose
income or gain with respect to a Note or Common Stock is effectively connected
with the conduct of a United States trade or business. A "Non-U.S. Holder" is
any holder other than a U.S. Holder.
Interest
Stated interest on the Notes will generally be includable in a U.S. Holder's
gross income and taxable as ordinary income for U.S. federal income tax
purposes at the time it is paid or accrued in accordance with the U.S.
Holder's regular method of accounting. Failure of the Company to file or cause
to be declared effective a Shelf Registration Statement as described under
"Description of Notes--Registration Rights" will cause Additional Interest to
accrue on the Notes in the manner described therein. According to Treasury
Regulations, the possibility of a change in the interest rate will not affect
the amount of interest income recognized by a holder (or the timing of such
recognition) if the likelihood of the change, as of the date the debt
obligations are issued, is remote. The Company believes that the likelihood of
a change in the interest rate on the Notes is remote and does not intend to
treat the possibility of a change in the interest rate as affecting the yield
to maturity of any Note. Similarly, the Company intends to take the position
that the likelihood of a repurchase upon a "Change of Control" or the payment
of "Additional Amounts" is remote under the Treasury Regulations, and likewise
does not intend to treat the possibility of the foregoing as affecting the
yield to maturity of any Note.
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Conversion of Notes Into Common Stock
A U.S. Holder generally will not recognize any income, gain or loss upon
conversion of a Note into Common Stock except to the extent the Common Stock
is considered attributable to accrued interest not previously included in
income (which is taxable as ordinary income) or with respect to cash received
in lieu of a fractional share of Common Stock. The adjusted basis of shares of
Common Stock received on conversion will equal the adjusted basis of the Note
converted (reduced by the portion of adjusted basis allocated to any
fractional share of Common Stock exchanged for cash), and the holding period
of the Common Stock received on conversion will generally include the period
during which the converted Notes were held. However, a U.S. Holder's tax basis
in shares of Common Stock considered attributable to accrued interest as
described above generally will equal the amount of such accrued interest
included in income, and the holding period for such shares shall begin as of
the date of conversion.
The conversion price of the Notes is subject to adjustment under certain
circumstances. Section 305 of the Code and the Treasury Regulations issued
thereunder may treat the holders of the Notes as having received a
constructive distribution, resulting in ordinary income (subject to a possible
dividends received deduction in the case of corporate holders) to the extent
of the Company's current and/or accumulated earnings and profits, if, and to
the extent that, certain adjustments in the conversion price that may occur in
limited circumstances (particularly an adjustment to reflect a taxable
dividend to holders of Common Stock) increase the proportionate interest of a
holder of Notes in the fully diluted Common Stock, whether or not such holder
ever exercises its conversion privilege. Moreover, if there is not a full
adjustment to the conversion ratio of the Notes to reflect a stock dividend or
other event increasing the proportionate interest of the holders of
outstanding Common Stock in the assets or earnings and profits of the Company,
then such increase in the proportionate interest of the holders of the Common
Stock generally will be treated as a distribution to such holders, taxable as
ordinary income (subject to a possible dividends received deduction in the
case of corporate holders) to the extent of the Company's current and/or
accumulated earnings and profits.
Sale, Exchange or Retirement of the Notes
Each U.S. Holder generally will recognize gain or loss upon the sale,
exchange, redemption, retirement or other disposition of Notes measured by the
difference (if any) between (i) the amount of cash and the fair market value
of any property received (except to the extent that such cash or other
property is attributable to the payment of accrued interest not previously
included in income, which amount will be taxable as ordinary income) and
(ii) such holder's adjusted tax basis in the Notes. Any such gain or loss
recognized on the sale, exchange, redemption, retirement or other disposition
of a Note should be capital gain or loss and will generally be long-term
capital gain or loss if the Note has been held or deemed held for more than
one year at the time of the sale or exchange. On August 5, 1997, legislation
was enacted which, among other things, reduces to 20% the maximum rate of tax
on long-term capital gains on most capital assets held by an individual for
more than 18 months and under which, gain on most capital assets held by an
individual more than one year and up to 18 months is subject to tax at a
maximum rate of 28%. A U.S. Holder's initial basis in a Note will be the
amount paid therefor.
The Common Stock
Distributions, if any, paid on the Common Stock after a conversion, to the
extent made from current and/or accumulated earnings and profits of the
Company, as determined for U.S. federal income tax purposes, will be included
in a U.S. Holder's income as ordinary income (subject to a possible dividends
received deduction in the case of corporate holders) as they are paid. Gain or
loss realized on the sale or exchange of Common Stock will equal the
difference between the amount realized on such sale or exchange and the U.S.
Holder's adjusted tax basis in such Common Stock. Such gain or loss will
generally be long-term capital gain or loss if the holder has held or is
deemed to have held the Common Stock for more than one year. On August 5,
1997, legislation was enacted which reduces to 20% the maximum rate of tax on
long-term capital gains on most capital assets
27
<PAGE>
held by an individual for more than 18 months and under which gain on most
capital assets held by an individual more than one year and up to 18 months is
subject to tax at a maximum rate of 28%.
Information Reporting and Backup Withholding
A U.S. Holder of Notes or Common Stock may be subject to "backup
withholding" at a rate of 31% with respect to certain "reportable payments,"
including interest payments, dividend payments and, under certain
circumstances, principal payments on the Notes. These backup withholding rules
apply if the holder, among other things, (i) fails to furnish a social
security number or other taxpayer identification number ("TIN") certified
under penalties of perjury within a reasonable time after the request
therefor, (ii) furnishes an incorrect TIN, (iii) fails to report properly
interest or dividends, or (iv) under certain circumstances, fails to provide a
certified statement, signed under penalties of perjury, that the TIN furnished
is the correct number and that such holder is not subject to backup
withholding. A holder who does not provide the Company with its correct TIN
also may be subject to penalties imposed by the IRS. Any amount withheld from
a payment to a holder under the backup withholding rules is creditable against
the holder's federal income tax liability, provided that the required
information is furnished to the IRS. Backup withholding will not apply,
however, with respect to payments made to certain holders, including
corporations, tax-exempt organizations and certain foreign persons, provided
their exemptions from backup withholding are properly established.
The Company will report to the U.S. Holders of Notes and Common Stock and to
the IRS the amount of any "reportable payments" for each calendar year and the
amount of tax withheld, if any, with respect to such payments.
NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a Non-U.S. Holder.
For purposes of withholding tax on interest and dividends discussed below, a
Non-U.S. Holder (as defined above) includes a non-resident fiduciary of an
estate or trust. For purposes of the following discussion, interest, dividends
and gain on the sale, exchange or other disposition of a Note or Common Stock
will generally be considered to be "U.S. trade or business income" if such
income or gain is (i) effectively connected with the conduct of a U.S. trade
or business or (ii) in the case of most treaty residents, attributable to a
permanent establishment (or, in the case of an individual, a fixed base) in
the United States.
Stated Interest
Generally any interest paid to a Non-U.S. Holder of a Note that is not U.S.
trade or business income will not be subject to U.S. tax if the interest
qualifies as "portfolio interest." Generally interest on the Notes will
qualify as portfolio interest if (i) the Non-U.S. Holder does not actually or
constructively own 10% or more of the total voting power of all voting stock
of the Company and is not a "controlled foreign corporation" with respect to
which the Company is a "related person" within the meaning of the Code, (ii)
the beneficial owner, under penalty of perjury, certifies that the beneficial
owner is not a U.S. person and such certificate provides the beneficial
owner's name and address, (iii) the Non-U.S. Holder is not a bank receiving
interest on an extension of credit made pursuant to a loan agreement made in
the ordinary course of its trade or business, and (iv) the Notes are in
registered form.
The gross amount of payments to a Non-U.S. Holder of interest that do not
qualify for the portfolio interest exemption and that are not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding.
U.S. trade or business income will be taxed at regular U.S. rates rather than
the 30% gross rate. In the case of a Non-U.S. Holder that is a corporation,
such U.S. trade or business income may also be subject to the branch profits
tax (which is generally imposed on a foreign corporation on the actual or
deemed repatriation from the United States of earnings and
28
<PAGE>
profits attributable to U.S. trade or business income) at a 30% rate. The
branch profits tax may not apply (or may apply at a reduced rate) if a
recipient is a qualified resident of certain countries with which the United
States has an income tax treaty. To claim the benefit of a tax treaty or to
claim exemption from withholding because the income is U.S. trade or business
income, the Non-U.S. Holder must provide a properly executed Form 1001 or 4224
(or such successor forms as the IRS designates), as applicable, prior to the
payment of interest. These forms must be periodically updated. Under recently
issued Treasury Regulations that will generally be effective after December
31, 1998 (the "New Regulations"), the required Forms 1001 and 4224 will be
replaced by a new Form W-8. Under the New Regulations, a Non-U.S. Holder who
is claiming the benefits of a treaty may be required to obtain a U.S. taxpayer
identification number and make certain certifications to the Company. Special
procedures are provided in the New Regulations for payments through qualified
intermediaries. Prospective investors should consult their tax advisors
regarding the effect, if any, of the New Regulations.
Dividends
In general, dividends paid to a Non-U.S. Holder of Common Stock will be
subject to withholding of U.S. federal income tax at a 30% rate unless such is
reduced by an applicable income tax treaty. Dividends that are connected with
such holder's conduct of a trade or business in the United States (U.S. trade
or business income) are generally subject to U.S. federal income tax at
regular rates, but are not generally subject to the 30% withholding tax if the
Non-U.S. Holder files the appropriate form with the payor, as discussed above.
Any U.S. trade or business income received by a Non-U.S. Holder that is a
corporation may also, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be applicable
under an income tax treaty. Currently, dividends paid to an address in a
foreign country generally are presumed (absent actual knowledge to the
contrary) to be paid to a resident of such country for purposes of the
withholding discussed above and for purposes of determining the applicability
of a tax treaty rate. Under the New Regulations, a Non-U.S. Holder claiming
the benefits of a treaty generally will be required to provide a Form W-8 (or
suitable substitute form) to the Company certifying such Non-U.S. Holder's
entitlements to treaty benefits. Other recently adopted Treasury Regulations
that will be effective with respect to payments made after December 31, 1997
provide special rules to determine whether, for purposes of determining the
applicability of a tax treaty, dividends paid to a Non-U.S. Holder that is an
entity should be treated as paid to the entity or those holding an interest in
that entity. Prospective investors should consult their tax advisors regarding
the effect, if any, of the New Regulations.
A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
U.S. withholding tax pursuant to an income treaty may obtain a refund of any
amounts currently withheld by filing an appropriate claim for a refund with
the IRS.
Conversion
A Non-U.S. Holder generally will not be subject to U.S. federal income tax
on the conversion of Notes into Common Stock, except with respect to cash (if
any) received in lieu of a fractional share or interest not previously
included in income. Cash received in lieu of a fractional share may give rise
to gain that would be subject to the rules described below for the sale of
Notes. Cash or Common Stock treated as issued for accrued interest would be
treated as interest under the rules described above.
Sale, Exchange or Redemption of Notes or Common Stock
Except as described below and subject to the discussion concerning backup
withholding, any gain realized by a Non-U.S. Holder on the sale, exchange or
redemption of a Note or Common Stock generally will not be subject to U.S.
federal income tax, unless (i) such gain is U.S. trade or business income,
(ii) subject to certain exceptions, the Non-U.S. Holder is an individual who
holds the Note or Common Stock as a capital asset and is present in the United
States for 183 days or more in the taxable year of the disposition, (iii) the
Non-U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law
applicable to certain U.S. expatriates (including certain former citizens or
residents of the United States), or (iv) in the case of the disposition of
Common Stock, the
29
<PAGE>
Company is a U.S. real property holding corporation. The Company does not
believe that it is currently a "United States real property holding
corporation," or that it will become one in the future.
Federal Estate Tax
Notes held (or treated as held) by an individual who is not a citizen or
resident of the United States (for federal estate tax purposes) at the time of
his or her death will not be subject to U.S. federal estate tax provided that
the interest thereon qualifies as portfolio interest and was not U.S. trade or
business income. Common Stock owned or treated as owned by an individual who
is not a citizen or resident of the United States (for federal estate tax
purposes) will be included in such individual's estate for U.S. federal income
tax purposes unless an applicable estate tax treaty otherwise applies.
Information Reporting and Backup Withholding
The Company must report annually to the IRS and to each Non-U.S. Holder any
interest or dividend that is subject to withholding, or that is exempt from
U.S. withholding tax pursuant to a tax treaty, or interest that is exempt from
U.S. tax under the portfolio interest exception. Copies of these information
returns may also be made available under the provisions of a specific treaty
or agreement to the tax authorities of the country in which the Non-U.S.
Holder resides.
Treasury Regulations provide that backup withholding and additional
information reporting will not apply to payments of principal on the Notes by
the Company to a Non-U.S. Holder if the holder certifies as to its Non-U.S.
status under penalties of perjury or otherwise establishes an exemption
(provided that neither the Company nor its Paying Agent has actual knowledge
that the holder is a U.S. person or that the conditions of any other exemption
are not, in fact, satisfied).
The payment of the proceeds from the disposition of Notes or Common Stock to
or through the U.S. office of any broker, U.S. or foreign, will be subject to
information reporting and possible backup withholding unless the owner
certifies as to its Non-U.S. Holder status under penalty of perjury or
otherwise establishes an exemption, provided that the broker does not have
actual knowledge that the holder is a U.S. person or that the conditions of
any other exemption are not, in fact, satisfied. The payment of the proceeds
from the disposition of a Note or Common Stock to or through a non-U.S. office
of a non-U.S. broker that is not a U.S. related person will not be subject to
information reporting or backup withholding. For this purpose, a "U.S. related
person" is (i) a "controlled foreign corporation" for U.S. federal income tax
purposes, (ii) a foreign person 50% or more of whose gross income from all
sources for the three-year period ending with the close of its taxable year
preceding the payment (or for such part of the period that the broker has been
in existence) is derived from activities that are effectively connected with
the conduct of a U.S. trade or business, or (iii) with respect to payments
made after December 31, 1998, a foreign partnership that, at any time during
its taxable year, is 50% or more (by income or capital interest) owned by
United States persons or is engaged in the conduct of a U.S. trade or
business.
In the case of the payment of proceeds from the disposition of Notes or
Common Stock to or through a non-U.S. office of a broker that is either a U.S.
person or a U.S. related person, information reporting is required on the
payment unless the broker has documentary evidence in the files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a
broker that is not a U.S. person or a U.S. related person (absent actual
knowledge that the payee is a U.S. person).
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against such Non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
30
<PAGE>
THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME AND ESTATE
TAX CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE.
ACCORDINGLY, EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR AS TO PARTICULAR
TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND
THE COMMON STOCK OF THE COMPANY, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY PROPOSED CHANGES IN APPLICABLE
LAWS.
31
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds of the sale of the
Securities offered hereby. The Securities may be sold from time to time to
purchasers directly by the Selling Securityholders, their donees, transferees
or distributees, or their respective successors-in-interest (collectively, the
"Selling Securityholders"). Alternatively, the Selling Securityholders may
from time to time offer the Securities through brokers, dealers or agents who
may receive compensation in the form of discounts, concessions or commissions
from the Selling Securityholders and/or the purchasers of the Securities for
whom they may act as agent.
The Securities offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
Securities may be sold by one or more of the following methods, without
limitation: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (d) an exchange
distribution in accordance with the rules of such exchange; (e) face-to-face
transactions between sellers and purchasers without a broker-dealer; and (f)
through the writing of options. At any time a particular offer of the
Securities is made, a revised Prospectus or Prospectus Supplement, if
required, will be distributed which will set forth the aggregate amount and
type of Securities being offered and the terms of the offering, including the
name or names of any underwriters, dealers or agents, any discounts,
commissions, concessions and other items constituting compensation from the
Selling Securityholders and any discounts, commissions or concessions allowed
or reallowed or paid to dealers. Such Prospectus Supplement and, if necessary,
a post-effective amendment to the Registration Statement of which this
Prospectus is a part, will be filed with the Commission to reflect the
disclosure of additional information with respect to the distribution of the
Securities. In addition, the Securities covered by this Prospectus may be sold
in private transactions or under Rule 144 rather than pursuant to this
Prospectus.
To the best knowledge of the Company, there are currently no plans,
arrangement or understandings between any Selling Securityholders and any
broker, dealer, agent or underwriter regarding the sale of the Securities by
the Selling Securityholders. There is no assurance that any Selling
Securityholder will sell any or all of the Securities offered by it hereunder
or that any such Selling Securityholder will not transfer, devise or gift such
Securities by other means not described herein.
The Selling Securityholders and any brokers, dealers or agents who
participate in the distribution of the Securities may be deemed to be
"underwriters," and any profits on the sale of the Securities by them and any
discounts, commissions or concessions received by any such brokers, dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. To the extent the Selling Securityholders may be deemed to be
underwriters, the Selling Securityholders may be subject to certain statutory
liabilities of, including, but not limited to, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Exchange Act.
The Selling Securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation,
Regulation M which may limit the timing of purchases and sales of any of the
Securities by the Selling Securityholders and any other such person.
Furthermore, Regulation M of the Exchange Act may restrict the ability of any
person engaged in the distribution of the Securities to engage in market-
making activities with respect to the particular Securities being distributed
for a period of up to five business days prior to the commencement of such
distribution. All of the foregoing may affect the marketability of the
Securities and the ability of any person or entity to engage in market-making
activities with respect to the Securities.
Pursuant to the Registration Rights Agreement entered into in connection
with the offer and sale of the Notes by the Company, each of the Company and
the Selling Securityholders will be indemnified by the other against certain
liabilities, including certain liabilities under the Securities Act, or will
be entitled to contribution in connection therewith.
The Company has agreed to pay the expenses incidental to the registration,
offering and sale of the Securities to the public other than commissions, fees
and discounts of underwriters, brokers, dealers and agents.
32
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the validity of the Securities will be
passed upon for the Company by Katten Muchin & Zavis, Chicago, Illinois.
EXPERTS
The consolidated financial statements of PLATINUM technology, inc., as of
December 31, 1996 and 1997 and for each of the years in the three-year period
ended December 31, 1997, incorporated by reference in this Prospectus from the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 have
been audited by KPMG Peat Marwick LLP, independent certified public
accountants, as set forth in their report thereon incorporated by reference
herein.
33
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate of the approximate amount of fees and
expenses payable in connection with the issuance and distribution of the
Securities pursuant to the Prospectus contained in this Registration
Statement. The Company will pay all of these expenses.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 44,250
Accountants fees and expenses................................... 25,000
Legal fees and expenses......................................... 20,000
Miscellaneous expenses.......................................... 10,750
--------
Total......................................................... $100,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Ten of the Company's Restated Certificate of Incorporation provides
that the Company shall indemnify its directors to the full extent permitted by
the Delaware General Corporation Law and may indemnify its officers to such
extent, except that the Company shall not be obligated to indemnify any such
person (i) with respect to proceedings, claims or actions initiated or brought
voluntarily by any such person and not by way of defense, or (ii) for any
amounts paid in settlement of an action indemnified against by the Company
without the prior written consent of the Company. With the approval of its
stockholders, the Company has entered into indemnity agreements with each of
its directors and certain of its officers. These agreements may require the
Company, among other things, to indemnify such officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers, to advance expenses to them as they are incurred,
provided that they undertake to repay the amount advanced if it is ultimately
determined by a court that they are not entitled to indemnification, and to
obtain directors' and officers' liability insurance if available on reasonable
terms.
In addition, Article Nine of the Company's Restated Certificate of
Incorporation provides that a director of the Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
his or her fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
General Corporation Law of the State of Delaware, or (iv) for any transaction
from which the director derives an improper personal benefit.
Reference is made to Section 145 of the General Corporation Law of the State
of Delaware which provides for indemnification of directors and officers in
certain circumstances.
The Company has purchased an insurance policy under which it is entitled to
be reimbursed for certain indemnity payments it is required or permitted to
make to its directors and officers.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
4.1* Restated Certificate of Incorporation of the Company.
4.2 Certificate of Amendment to the Restated Certificate of Incorporation of
the Company, incorporated by reference to Exhibit 4.11 to the Company's
Registration Statement on Form S-8, filed with the Commission on
September 8, 1995.
4.3* Bylaws of the Company.
4.4 Indenture, dated as of December 15, 1997 between the Company and
American National Bank and Trust Company of Chicago, N.A., as Trustee,
incorporated by reference to Exhibit 4.6 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 (the "1997 10-K").
4.5 Form of Note (included in Exhibit 4.4).
4.6 Registration Rights Agreement, dated as of December 15, 1997, between
the Company and Deutsche Morgan Grenfell Inc.
4.7* Specimen stock certificate representing Common Stock.
4.8 Rights Agreement dated as of December 21, 1995 between the Company and
Harris Trust and Savings Bank, incorporated by reference to Exhibit 1 to
the Company's registration statement on Form 8-A, filed December 26,
1995.
5 Opinion of Katten Muchin & Zavis as to the legality of the securities
being registered (including consent).
12 Computation of Ratios of Earnings to Fixed Charges, incorporated by
reference to Exhibit 12 of the 1997 10-K.
23.1 Consent of KPMG Peat Marwick LLP with respect to the Company's financial
statements.
23.2 Consent of Katten Muchin & Zavis (contained in their opinion filed as
Exhibit 5 hereto).
24 Power of Attorney (contained on the signature page of this Registration
Statement).
25.1 Form T-1 for American National Bank and Trust Company of Chicago, N.A.,
as Trustee.
</TABLE>
- --------
* Filed with the Commission as an Exhibit to the Company's Registration
Statement on Form S-1, Registration No. 33-39233, and incorporated herein
by reference.
ITEM 17. UNDERTAKINGS
(a)The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment that contains a form
of prospectus 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 hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933 (the "Securities Act"), each
filing of the Company's annual report pursuant to Section 13(a) or 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 that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE>
(h)Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the Company 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 Company 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 and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oakbrook Terrace, State of Illinois, on March 16,
1998.
PLATINUM technology, inc.
By: /s/ Andrew J. Filipowski
---------------------------------
Andrew J. Filipowski
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Andrew J. Filipowski, Michael P. Cullinane, Larry S. Freedman and Matthew S.
Brown, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution, to sign on his behalf, individually and in
each capacity stated below, all amendments and post-effective amendments to
this Registration Statement on Form S-3 (including registration statements
filed pursuant to Rule 462(b) under the Securities Act of 1933, and all
amendments thereto) and to file the same, with all exhibits thereto and any
other documents in connection therewith, with the Securities and Exchange
Commission under the Securities of 1933, 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 and about the premises, as fully
and to all intents and purposes as each might or could do in person, hereby
ratifying and confirming each act that said attorneys-in-fact and agents may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated as of March 16, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ Andrew J. Filipowski
- ------------------------ President, Chief Executive Officer (Principal ---
Andrew J. Filipowski Executive Officer) and a Director
/s/ Paul L. Humenansky
- ------------------------ Executive Vice President, Chief Operations ---
Paul L. Humenansky Officer and a Director
/s/ Michael P. Cullinane
- ------------------------ Executive Vice President, Chief Financial Officer (Principal ---
Michael P. Cullinane Financial and Accounting Officer), Treasurer and a Director
/s/ James E. Cowie
Director
- ------------------------ ---
James E. Cowie
/s/ Steven D. Devick
Director
- ------------------------ ---
Steven D. Devick
/s/ Arthur P. Frigo
Director
- ------------------------ ---
Arthur P. Frigo
/s/ Gian M. Fulgoni
Director
- ------------------------ ---
Gian M. Fulgoni
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.6 Registration Rights Agreement, dated as of December 15, 1997, between
the Company and Deutsche Morgan Grenfell Inc.
5 Opinion of Katten Muchin & Zavis as to the legality of the securities
being registered (including consent).
23.1 Consent of KPMG Peat Marwick LLP with respect to the Company's
financial statements.
23.2 Consent of Katten Muchin & Zavis (contained in their opinion filed as
Exhibit 5 hereto).
25.1 Form T-1 for American National Bank and Trust Company of Chicago,
N.A., as Trustee.
</TABLE>
- --------
+ Only on manually signed copy.
II-5
<PAGE>
FINAL
PLATINUM technology, inc.
REGISTRATION RIGHTS AGREEMENT
Dated as of
December 15, 1997
Deutsche Morgan Grenfell Inc.
51 West 52nd Street
New York, NY 10019
Ladies and Gentlemen:
PLATINUM technology, inc., a Delaware corporation (the "Company"), proposes
to issue and sell to Deutsche Morgan Grenfell Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation (the "Initial Purchasers") upon the terms set
forth in a purchase agreement dated December 11, 1997 (the "Purchase Agreement")
between the Initial Purchasers and the Company, its 6.25% Convertible
Subordinated Notes due 2002. As an inducement to the Initial Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Initial Purchasers thereunder, the Company agrees with the
Initial Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for
the benefit of the Holders (as defined below) from time to time of the
Registrable Securities (as defined below), including the Initial Purchasers, as
follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Offering Memorandum, issued December 11, 1997, in respect of
the Securities. As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Affiliate" of any specified Person means any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified Person. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" shall mean this Registration Rights Agreement as the same may
be amended, supplemented or modified from time to time in accordance with the
terms hereof.
"Commission" means the United States Securities and Exchange Commission.
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"Common Stock" means the common stock, $0.001 par value, of the Company and
any other shares of common stock as may constitute "Common Stock" for purposes
of the Indenture.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b) hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Holder" shall mean any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" shall mean the Indenture, dated as of December 15, 1997,
between the Company and the Trustee thereunder, pursuant to which the Securities
are being issued, as amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Issue Date" means December 16, 1997
"Additional Interest" has the meaning set forth in Section 2(c).
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement and including all material
incorporated by reference therein, with respect to the terms of the offering of
any portion of the Registrable Securities.
"Registration Default" has the meaning set forth in Section 2(c) hereof.
"Restricted Securities" shall mean all Securities required pursuant to the
Indenture to bear any Restricted Securities Legend (as defined in the
Indenture).
"Registrable Security" shall mean any Restricted Security and any share of
Common Stock issuable upon conversion thereof except any such Restricted
Security or share of Common Stock which (i) has been effectively registered
under the Securities Act and sold in a manner contemplated by the Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto), or is transferable
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pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto),
or (iii) has otherwise been transferred and a new security or share of Common
Stock not subject to transfer restrictions under the Securities Act has been
delivered by or on behalf of the Company in accordance with the Indenture.
"Rule 144" shall mean Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 144A" shall mean Rule 144A promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 415" shall mean Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 430A" shall mean Rule 430A promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Securities" shall mean the $150,000,000 aggregate principal amount of
6.25% Convertible Subordinated Notes due 2002 of the Company being issued
pursuant to the Indenture (together with up to $22,500,000 aggregate principal
amount of such convertible subordinated notes if, and to the extent, the Initial
Purchasers' over-allotment option is exercised).
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a shelf registration statement of the
Company pursuant to the provisions of Section 2 hereof filed with the Commission
which covers some or all of the Registrable Securities, as applicable, on an
appropriate form under Rule 415 under the Securities Act, or any similar rule
that may be adopted by the Commission, as amended by any amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Trust Indenture Act" has the meaning set forth in Section 1.1 of the
Indenture.
"Trustee" means the Trustee under the Indenture.
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2. Shelf Registration.
(a) The Company shall, within 90 calendar days following the Issue
Date of the Securities, file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement and, thereafter,
shall use its reasonable efforts to cause such Shelf Registration Statement to
be declared effective under the Securities Act as soon as practicable, and in
any event within 180 calendar days after the Issue Date.
(b) The Company shall use its reasonable efforts:
(i) To keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part thereof to be
usable by Holders for a period of two years from the later of a) the Issue
Date or b) the last date of original issuance of the Securities or such
shorter period that will terminate upon the earliest of the following: (A)
when all the Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement, (B) when all shares
of Common Stock issued upon conversion of any such Securities that had not
been sold pursuant to the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement and (C) when there shall cease
to be outstanding Registrable Securities (in any such case, such period
being called the "Effectiveness Period"); and
(ii) After the effectiveness of the Shelf Registration Statement,
promptly upon the request of any Holder, to take any action reasonably
necessary to register the sale of any Registrable Securities of such Holder
and to identify such Holder as a selling securityholder.
The Company shall be deemed not to have used its reasonable efforts to keep the
Shelf Registration Statement effective during the requisite period if the
Company voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell any such Registrable
Securities during that period, unless (i) such action is required by applicable
law, (ii) the continued effectiveness of the Shelf Registration Statement or use
thereof for disposition of Registrable Securities would require the Company to
disclose a material financing, acquisition or other corporate transaction, and
the Board of Directors shall have determined in good faith that such disclosure
is not in the best interests of the Company and the holders of its outstanding
Common Stock, or (iii) the Board of Directors shall have determined in good
faith that there is a valid business purpose or reason for such suspension, and
(x), in the case of clause (i) above, the Company thereafter promptly complies
with the requirements of paragraph 3 (i) below and (y) the Company complies with
its obligations, if any, to pay Additional Interest.
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(c) (1) If (i) on or prior to 90 days following the Issue Date a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the 180th day following the Issue Date, such Shelf Registration
Statement is not declared effective (each, a "Registration Default"), additional
interest ("Additional Interest") will accrue on the Restricted Securities from
and including the date following such Registration Default until such time as
such Shelf Registration Statement is filed or such Shelf Registration Statement
is declared effective, as the case may be. Additional Interest will be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date under the Indenture following the date on which such
Additional Interest begins to accrue, and will accrue at a rate per annum equal
to an additional one-quarter of one percent (0.25%) of the principal amount, to
and including the 90th day following such Registration Default and one-half of
one percent (0.50%) of the principal amount thereof from and after the 91st day
following such Registration Default. Following the cure of all Registration
Defaults relating to any Restricted Securities, the accrual of Additional
Interest with respect to such Restricted Securities will cease (without in any
way limiting the effect of any subsequent Registration Default). In addition, in
the event that Shelf Registration Statement ceases to be effective for more than
90 days or the Company suspends the use of the prospectus which is a part
thereof for more than 90 days, in each case, whether or not consecutive, during
any 12-month period, then the interest rate borne by Restricted Securities will
increase by an additional one-half of one percent (0.50%) of the principal
amount per annum from the 91st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective or the Company suspends the use of
the prospectus which is a part thereof, as the case may be, until the earlier of
such time as (i) the Shelf Registration Statement again becomes effective, (ii)
the use of the related prospectus ceases to be suspended or (iii) the
Effectiveness Period expires. In no event shall the Company be required to pay
Additional Interest in excess of the applicable maximum amount of one-half of
one percent (0.50%) as set forth above, regardless of whether one or multiple
Registration Defaults exist.
(2) Additional Interest on the Restricted Securities shall be
paid by the Company to the holders of record of such Restricted Securities on
each Interest Payment Date (as defined in the Indenture) in the same manner as
for interest on such Restricted Securities as provided in the form of Securities
set forth in Section 2.2 of the Indenture.
(3) All of the Company's obligations set forth in this Section
2(c) which are unsatisfied to any extent with respect to any Restricted Security
at the time such security ceases to be a Restricted Security shall survive until
such time as all such obligations with respect to such security have been
satisfied in full (notwithstanding the earlier termination of this Agreement).
(4) Any payments due and payable pursuant to this Section 2(c)
shall be subordinated to Senior Indebtedness (as defined in the Indenture) to
the extent and in the manner set forth in the Indenture.
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(5) The rights of the recordholders of Restricted Securities to
Additional Interest as set forth in this Section 2(c) are not intended to be
exclusive of any other right or remedy for the breach by the Company of this
Agreement, and shall be in addition to every other right and remedy given
hereunder or under the Indenture or now or hereafter existing at law or in
equity or otherwise.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall furnish to the Holders (if requested), prior to
the filing thereof with the Commission, a copy of any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement, if
any, to the Prospectus included therein and shall use its reasonable
efforts to reflect in each such document, when so filed with the
Commission, such comments as the Holders reasonably may propose.
(b) The Company shall take such action as may be necessary so that (i)
any Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto
(and each report or other document incorporated therein by reference in
each case) complies in all material respects with the Securities Act and
the Exchange Act, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement does
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and, in the
case of clause (i), the Holders and, if requested by any Initial Purchaser
or any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
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(2) The Company shall advise the Holders and, if requested by
any such Holder, confirm such advice in writing of:
(i) the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(ii) the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation
of any proceeding for such purpose; and
(iii) the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the Prospectus
so that, as of such date, the Shelf Registration Statement and
the Prospectus do not contain an untrue statement of a material
fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under
which they were made) not misleading (which advice shall be
accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(d) The Company shall use its reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending
the effectiveness of any Shelf Registration Statement at the earliest
possible time.
(e) The Company shall furnish to each Holder (if requested) with
respect to a Shelf Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder
so requests in writing, all reports, other documents and exhibits
(including those incorporated by reference).
(f) The Company shall, during the Effectiveness Period, deliver to
each Holder with respect to a Shelf Registration Statement, without charge,
as many copies of the Prospectus (including each preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request, and the Company
consents (except during the continuance of any event described in Section
3(c)(2)(iii)) to the use of the Prospectus thereto by each of the Holders
in connection with the offering and sale of the Registrable Securities
covered by the Prospectus thereto during the Effectiveness Period.
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(g) Prior to any offering of Registrable Securities pursuant to any
Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holders
reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions
of the Registrable Securities covered by such Shelf Registration Statement;
provided, however, that in no event shall the Company be obligated to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for
this Section 3(g), (ii) file any general consent to service of process in
any jurisdiction where it is not as of the date hereof then so subject or
(iii) subject itself to taxation in any jurisdiction if it is not so
subject.
(h) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities sold or to be sold pursuant to any Shelf Registration Statement
free of any restrictive legends and in such permitted denominations and
registered in such names as Holders may reasonably request in connection
with the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or supplement
to the related Prospectus or file any other required documents so that, as
thereafter delivered to purchasers of the Registrable Securities included
therein, the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If the Company notifies the Holders of the occurrence of any
event contemplated by paragraph 3(c)(2)(iii) above, the Holders shall
suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall provide a CUSIP number for the
Securities registered under such Shelf Registration Statement.
(k) The Company shall use its reasonable efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to their securityholders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable after the
effective date of the applicable Shelf Registration Statement an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act.
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(l) The Company shall cause the Indenture and the Securities to be
qualified under the Trust Indenture Act in a timely manner; and in
connection with such qualification, the Company shall cooperate with the
Trustee under the Indenture and the Holders (as defined in the Indenture)
to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the Trust
Indenture Act; and the Company shall execute and use all reasonable efforts
to cause the Trustee to execute all documents that may be required to
effect such changes and all other forms and documents required to be filed
with the Commission to enable such Indenture to be so qualified in a timely
manner.
(m) The Company may require each Holder with respect to a Shelf
Registration Statement to furnish to the Company such information regarding
the Holders and the distribution of Registrable Securities held by such
Holder as may be required by applicable law or regulation for inclusion in
such Shelf Registration Statement (including, without limitation, the
information required by Item 507 of Regulation S-K of the Securities Act),
and the Company may exclude from such registration the Registrable
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request unless, and until such time
as, such information is furnished by such Holder.
(n) The Company shall make reasonably available for inspection by one
representative of the Holders designated in writing by the Holders of a
majority of the Registrable Securities to be registered thereunder, any
underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent
retained by such representative or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries;
(o) The Company shall cause the Company's officers, directors and
employees to make reasonably available for inspection all relevant
information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with any such
Shelf Registration Statement, in each case, as is customary for similar due
diligence examinations; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the
time of delivery of such information shall be kept confidential by such
representative, any Holders or any such underwriter, attorney, accountant
or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying
obligation of confidentiality;
(p) The Company will use its reasonable efforts to cause the Common
Stock issuable upon conversion of the Securities to be listed on the Nasdaq
National Market
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or other stock exchange or trading system on which the Common Stock
primarily trades on or prior to the effective date of any Shelf
Registration Statement hereunder.
(q) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Registrable Securities or participate as a member
of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Conduct Rules and the By-laws of
the National Association of Securities Dealers, Inc. ("NASD")) thereof,
whether as a Holder of such Registrable Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or
otherwise, assist such broker-dealer in complying with the requirements of
such Rules and By-Laws, including, without limitation, by (A) such Rules or
By-Laws shall so require, engaging a "qualified independent underwriter"
(as defined in Rule 2720) to participate in the preparation of the Shelf
Registration Statement relating to such Registrable Securities and to
exercise usual standard of due diligence in respect thereto, (B)
indemnifying any such qualified independent underwriter to the extent of
the indemnification of underwriters provided in Section 5 hereof and (C)
providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Conduct
Rules of the NASD.
(r) Notwithstanding any provision of this Section 3 to the contrary,
the Company shall not be required to amend or supplement the Shelf
Registraton Statement pursuant to the requirements of Sections 3(b), 3(c)
or 3(i) hereof if (i) such amendment or supplement would require the
Company to disclose a material financing, acquisition or corporate
transaction and the Board of Directors shall have determined that such
disclosure is not in the best interest of the Company and the holders of
its outstanding Common Stock or (ii) the Board of Directors shall have
determined in good faith that there is a valid business purpose or reason
for suspending the use of the Prospectus included in such Shelf
Registration Statement in accordance with Section 3(i) hereof instead of
making such amendment or supplement, provided that in each case the Company
complies with its obligations, if any, to pay Additional Interest.
4. Registration Expenses. The Company shall bear all fees and expenses
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof.
5. Indemnification and Contribution. (a) In connection with any Shelf
Registration Statement, the Company shall indemnify and hold harmless each
Holder, the Initial Purchasers, each underwriter who participates in an offering
of Registrable Securities, each person, if any, who controls any of such parties
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and each of their respective directors, officers,
employees,trustees and agents, as follows:
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(i) against any and all losses, liabilities, claims, damages and
expenses whatsoever, including any amounts paid in settlement of any
investigation, litigation, proceeding or claim, joint or several, as
incurred, arising out of any untrue statement or alleged untrue statement
of a material fact contained in any Shelf Registration Statement covering
Registrable Securities, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, that the Company
shall not be liable under this clause (i) for any settlement of any action
effected without its written consent, which consent shall not be
unreasonably withheld; and
(ii) against any and all expenses whatsoever, as incurred (including
reasonable fees and disbursements of counsel chosen by such Holder or any
such underwriter (except to the extent otherwise expressly provided in
Section 5(c) hereof)), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
court or governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) of this Section 5(a);
provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder or any
underwriter in writing expressly for use in the Shelf Registration Statement or
any Prospectus. Any amounts advanced by the Company to an indemnified party
pursuant to this Section 5 as a result of such losses shall be returned to the
Company if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company.
(b) Each Holder shall agree, severally and not jointly, to indemnify and
hold harmless the Company, each underwriter who participates in an offering of
Registrable Securities and the other Holders and each of their respective
directors, officers (including each officer of the Company who signed the Shelf
Registration Statement), employees, trustees and agents and each Person, if any,
who controls the Company, any underwriter or any other Holder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all loss, liability, claim, damage and expense whatsoever
described in the indemnity contained in Section 5(a)(i) and (ii) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Shelf Registration Statement or any
Prospectus in reliance upon and in
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conformity with written information furnished to the Company by such Holder
expressly for use in the Shelf Registraton Statement or any Prospectus;
provided, however, that, no such Holder shall be liable for any claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers served on such indemnified
party, but failure to so notify an indemnifying party shall not relieve it of
any liability which it may have to the indemnified party otherwise than on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. If an indemnifying party so
elects within a reasonable time after receipt of such notice, such indemnifying
party, jointly with any other indemnifying party, may assume the defense of such
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action, provided that if any such indemnified party
reasonably determines that there may be legal defenses available to such
indemnified party which are different from or in addition to those available to
such indemnifying party or that representation of such indemnifying party and
any indemnified party by the same counsel would present a conflict of interest,
then such indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party shall be entitled to conduct the defense of such indemnifying
party and counsel for each indemnified party or parties shall be entitled to
conduct the defense of such indemnified party or parties. If an indemnifying
party assumes the defense of an action in accordance with and as permitted by
the provisions of this paragraph, such indemnifying party shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
party or parties be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, and the Holders
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and Holders, as incurred; provided that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation. As between the Company, on the one hand, and the
Holders, on the other hand, such parties shall contribute to such aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement in such proportion as shall be appropriate
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to reflect the relative fault of the Company, on the one hand, and the Holders,
on the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of the
Company, on the one hand, and of the Holders, on the other hand, shall be
determined by reference to, among other things; whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or by or on behalf of the Holders, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Initial Purchasers agree, and
the Holders shall agree, that it would not be just and equitable if contribution
pursuant to this Section 5 were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the relevant
equitable considerations. For purposes of this Section 5(d), each director,
officer, employee, trustee, agent and Person, if any, who controls a Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Holder, and each
director, officer, employee, trustee and agent of the Company, and each Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent.
6. Miscellaneous.
(a) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement,
except such registration rights agreements as have been disclosed to the Initial
Purchasers and as to which the Company has agreed, pursuant to the Purchase
Agreement, to use all reasonable efforts to obtain waivers of such rights
thereunder. The Company represents and warrants that the rights granted to the
Holders of Registrable Securities hereunder do not in any way conflict with the
rights granted to the Holders of the Company's securities under any other
agreements, except such registration rights agreements as to which the Company
has, pursuant to the Purchase Agreement, obtained waivers of rights thereunder.
The Company may not grant registration rights that would permit any Person that
is a third party the right to piggy-back on any Shelf Registration Statement.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Deutsche Morgan Grenfell Inc.
-13-
<PAGE>
FINAL
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this
Section 6(c);
(2) if to the Initial Purchasers, initially at the address set
forth in the Purchase Agreement;
(3) if to the Company, initially at its address set forth in the
Purchase Agreement; and
All such notices and communications shall be deemed to have been duly given when
received.
The Initial Purchasers and the Company by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties and the
Holders, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Registrable Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Registrable Securities and any such Holder may enforce the provisions of this
Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise effect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
-14-
<PAGE>
FINAL
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
PLATINUM technology, inc.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
DEUTSCHE MORGAN GRENFELL INC.
By:
--------------------------
Name:
-------------------------
Title:
------------------------
<PAGE>
EXHIBIT 5
[Katten Muchin & Zavis letterhead]
March 16, 1998
PLATINUM technology, inc.
1815 South Meyers Road
Oakbrook Terrace, Illinois 60181
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel for PLATINUM technology, inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing of a
registration statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Registration Statement relates to the registration (the "Registration") of
$150,000,000 aggregate principal amount of the Company's 6.25% convertible
subordinated notes due 2002, (the "Notes") and an indeterminate number of shares
of the Company's common stock, $.001 per value per share, issuable upon
conversion of the Notes (the "Conversion Shares"). The Notes and the Conversion
Shares are to be offered and sold by certain securityholders of the Company (the
"Selling Securityholders").
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates of public officials and others and upon
affidavits, certificates and written statements of directors, officers and
employees of, and the accountants and transfer agent for, the Company. We have
also examined originals or copies, certified or otherwise identified to our
satisfaction, of such instruments, documents and records as we have deemed
relevant and necessary to examine for the purpose of this opinion, including (a)
the Registration Statement, (b) the Restated Certificate of Incorporation of the
Company, as amended, (c) the By-Laws of the Company, (d) resolutions adopted by
the Board of Directors of the Company in connection, (e) the Indenture dated
December 16, 1997 between the Company and American National Bank and Trust
Company of Chicago, as Trustee (the "Indenture"), relating to the Notes, and (f)
the form of Note attached as Exhibit A to the Indenture.
In connection with this opinion, we have assumed the accuracy and
completeness of all documents and records that we have reviewed, the genuineness
of all signatures, the authenticity of the documents submitted to us as
originals and the conformity to authentic original documents of all documents
submitted to us as certified, conformed or reproduced copies.
<PAGE>
Based upon and subject to the foregoing, it is our opinion that:
(1) The Notes have been duly authorized and are binding obligations of the
Company entitled to the benefits of the Indenture, except (i) as enforceability
may be limited by the effects of bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting the rights and
remedies of creditors generally; (ii) as enforceability may be limited by the
effects of general principles of equity, whether applied by a court of law or
equity; (iii) as rights to indemnity or contribution under the same may be
limited by federal or state securities laws or the public policy underlying such
laws; and (iv) that we express no opinion as to the waiver of the defense of
usury; and
(2) The Conversion Shares have been duly authorized and, when issued by the
Company upon the conversion of Notes in accordance with their terms and the
terms of the Indenture, will be validly issued, fully paid and non-assessable.
Our opinions expressed above are limited to the General Corporation Law of
the State of Delaware and the laws of the State of New York, and we do not
express any opinion concerning any other laws. This opinion is given as of the
date hereof, and we assume no obligation to advise you of changes that may
hereafter be brought to our attention.
We hereby consent to use of our name under the heading "Legal Matters" in
the Prospectus forming a part of the Registration Statement and to use of this
opinion for filing as Exhibit 5 to the Registration Statement.
Very truly yours,
/s/ KATTEN MUCHIN & ZAVIS
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
PLATINUM technology, inc.
We consent to the incorporation by reference in this registration statement on
Form S-3 of our reports dated February 9, 1998 (except for Note 18, which is as
of February 18, 1998), relating to the consolidated balance sheets of PLATINUM
technology, inc. and subsidiaries as of December 31, 1996 and 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1997,
and related consolidated financial statement schedule, and to the reference to
our firm under the heading "Experts."
KPMG Peat Marwick LLP
Chicago, Illinois
March 13, 1998
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
FOR STATEMENTS OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939
OF CORPORATIONS DESIGNATED TO ACT AS TRUSTEES
AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO
(Name of Trustee)
36-0727623
(I.R.S. employer identification No.)
33 NORTH LASALLE STREET, CHICAGO, ILLINOIS
(Address of principal executive offices)
60690
(zip code)
PLATINUM TECHNOLOGY, INC.
(Name of obligor)
DELAWARE 36-3509662
(State or other jurisdiction of (I.R.S. employer identification No.)
incorporation or organization)
1815 S. Meyers Road
Oakbrook Terrace, Illinois 60181
(Address of principal executive offices) (zip code)
6.25% CONVERTIBLE SUBORDINATED NOTES
DUE 2002
(Title of Indenture Securities)
<PAGE>
GENERAL
1. General information. Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency, Washington, D.C.
Director of Financial Institutions, State of Illinois, Springfield,
Illinois (as to Trust Department only).
Chicago Clearing House Association, 164 West Jackson Boulevard,
Chicago, Illinois.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to execute corporate trust powers.
The trustee is authorized to execute corporate trust powers.
2. Affiliations with obligor and underwriters. If the obligor or any
underwriter for the obligor is an affiliate of the trustee, describe each
affiliation.
No such affiliation exists. See Note, page 4 hereof.
12. Indebtedness of the Obligor to the Trustee.
As of January 30, 1998:
<TABLE>
<CAPTION>
Nature of Indebtedness Amount Outstanding Date Due
---------------------- ------------------ --------
<S> <C> <C>
Line of Credit* $ .00 12/22/98
Standby Letter of Credit* $2,685,777.46 12/22/98
Corporate Visa $ .00 09/30/98
</TABLE>
*Unsecured
13. Defaults by the Obligor.
None.
15. Foreign Trustee.
Not applicable.
2
<PAGE>
16. List of Exhibits.
Exhibit 1 A copy of the existing Articles of Association of the trustee.
(Filed herewith).
Exhibit 1(a) A copy of Certificate of Change of Name.*
Exhibit 2 A copy of the Certificate of Authority to commence business.*
Exhibit 3 A copy of the authorization to exercise corporate trust powers.*
Exhibit 4 A copy of existing by-laws of the trustee. (Filed herewith).
Exhibit 5 None.
Exhibit 6 The Consent of the trustee required by Section 321(b) of the Act.
(Filed herewith).
Exhibit 7 A copy of the latest report of condition of the trustee published
pursuant to law or requirements of its supervising authority.
(Filed herewith).
* These Exhibits are hereby incorporated by reference to Exhibits bearing
identical Exhibit numbers submitted by this trustee in its statement of
eligibility and qualification filed with Securities and Exchange Commission
with respect to the Indianapolis Power & Light Company First Mortgage
Bonds, 5 1/8% Series due July 1996, Securities and Exchange Commission
Registration No. 2-24581.
3
<PAGE>
NOTE
The answer to item 2 is based on incomplete information. To the best of our
knowledge and belief, however, there is no person, firm or corporation
ordinarily engaged in underwriting securities of the obligor:
(1) which is an affiliate of the trustee;
(2) of which any director or executive officer of the trustee is a
director, officer, partner, employee, appointee or representative;
(3) which individually owns, beneficially, more that 1% of the outstanding
Common Stock of the trustee or First Chicago NBD Corporation;
(4) whose securities are owned beneficially by the trustee as collateral
security for obligations in default.
This statement may therefore be considered as correct unless amended
contemporaneously with the filing by the obligor of the Amendment or Supplement
to its Registration Statement disclosing underwriters for the Indenture
securities.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a corporation
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility and Qualification to be signed on its
behalf by the undersigned thereunto duly authorized, all in the City of Chicago,
State of Illinois, on the 3rd day of February, 1998.
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: /s/ Anjali Gottreich
------------------------
Its: Assistant Vice President
------------------------
5
<PAGE>
State of Illinois )
County of Cook )
The Undersigned, Anjali Gottreich, hereby certifies that she is a duly
appointed and qualified Assistant Vice President of American National Bank and
Trust Company of Chicago, a corporation duly organized and existing as a
national banking association under the laws of the United States of America, and
has authority to execute this Certificate.
She further certifies that attached to this certificate are true and
correct copies of Amended Articles of Association and the By-Laws of said
Association, that said Articles and By-Laws were duly adopted by the Board of
Directors of said Association, and that said Amended Articles and By-Laws have
never been repealed and are still in full force and effect.
She further certifies that the Seal affixed to this certificate is the
corporate seal of said Association.
In witness whereof, the undersigned has set her hand and has affixed the
corporate seal of said association, this 3rd day of February, 1998.
By: /s/ Anjali Gottreich
------------------------
Its: Assistant Vice President
------------------------
(Seal)
6
<PAGE>
EXHIBIT 1
_____________________________________________________________________________
_____________________________________________________________________________
Amended Articles of Association
of
American National Bank
and Trust Company of Chicago
(As Amended and Restated February 2, 1996)
Charter No. 13216
7
<PAGE>
_______________________________________________________________________________
_______________________________________________________________________________
Amended Articles of Association
of
American National Bank and Trust Company
of Chicago
Charter No. 13216
First. The title of this Association, which shall carry on the business of
banking under the laws of the United States, shall be "American National Bank
and Trust Company of Chicago."
Second. The place where the main banking house or office of this Association
shall be located, its operations of discount and deposit carried on, and its
general business conducted, shall be Chicago, County of Cook, State of Illinois.
Third. The Board of Directors of this Association shall consist of such number
of its shareholders, not less than five nor more than twenty-five, as from time
to time shall be determined by a majority of the votes to which all of its
shareholders are at the time entitled. By vote of a majority of the full Board
of Directors, the Board may increase such number, within such maximum limit, by
not more than two and appoint a person or persons to fill the resulting vacancy
or vacancies between meetings of the shareholders. A majority of the Board of
Directors shall be necessary to constitute a quorum for the transaction of
business.
Fourth. The regular annual meeting of the shareholders of this Association
shall be held at its main banking hours, or such other convenient place as shall
be duly authorized by the Board of Directors, on such day of each year as is
specified therefor in the By-Laws of the Association, at which meeting a Board
of Directors shall be elected; but, if no such election shall be held on that
day, it may be held on any subsequent day, in accordance with the provisions of
the banking laws of the United States.
Fifth. The amount of capital stock of this Association shall be divided into
2,000,000 shares of common stock of the par value of Ten Dollars ($10) each; but
said capital stock may be increased or decreased from time to time, in
accordance with the provisions of the laws of the United States.
If the capital stock is increased by the sale of additional shares thereof, each
shareholder shall be entitled to subscribe for such additional shares in
proportion to the number of shares of said capital stock owned by him at the
time the increase is authorized by the shareholders, unless another time
subsequent to the date of the shareholders' meeting is specified in a resolution
adopted by the shareholders at the time the increase is authorized. The Board
of Directors shall have the power to
8
<PAGE>
prescribe a reasonable period of time within which the pre-emptive rights to
subscribe to the new shares of capital stock must be exercised.
If the capital stock is increased by a stock dividend, each shareholder shall be
entitled to his proportionate amount of such increase in accordance with the
number of shares of capital stock owned by him at the time the increase is
authorized by the shareholders, unless another time subsequent to the date of
the shareholders' meeting is specified in a resolution adopted by the
shareholders at the time the increase is authorized.
Sixth. The Board of Directors shall appoint one of its members President of
this Association, who shall be Chairman of the Board; but the Board of Directors
may appoint a Director, in lieu of the President, to be Chairman of the Board,
who shall perform such duties as may be designated by the Board of Directors.
The Board of Directors shall have the power to appoint one or more Vice-
Presidents, at least one of whom shall also be a member of the Board of
Directors, and who shall be authorized, in the absence of the President, to
perform all acts and duties pertinent to the office of President, except such as
the President only is authorized by law to perform; to appoint a Cashier and
such other officers as may be required to transact the business of this
Association; to fix the salaries to be paid to all officers of this Association;
and to dismiss such officers, or any of them.
The Board of Directors shall have the power to define the duties of officers and
employees of this Association, to require bonds from them, and to fix the
penalty thereof; to regulate the manner in which Directors shall be elected or
appointed, and to appoint judges of the election; to make all by-laws that it
may be lawful for them to make for the general regulation of the business of
this Association and the management of its affairs; and generally to do and
perform all acts that it may be lawful for a Board of Directors to do and
perform.
Any person made a party to any action, suit or other proceeding, civil or
criminal, by reason of the fact that he is or was a director, officer, or
employee of the Association shall be indemnified by the Association against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney's fees, actually and necessarily incurred by him in connection with the
defense of such proceeding, or in connection with any appeal therein, except in
relation to (i) any matter as to which it shall be adjudged in such proceeding
that he is liable for negligence or misconduct in the performance of his duties
to the Association, provided that in the case of a criminal action, suit, or
proceeding, a conviction or judgment shall not be deemed in adjudication that
the director, officer, or employee is liable for negligence or misconduct in the
performance of his duties to the Association if it shall be determined that he
was acting in good faith in what he considered to be the best interests of the
Association and without reasonable cause to know that his acts were illegal; or
(ii) any matter settled or compromised unless it shall be determined that there
is not reasonable ground for such person being adjudged liable for negligence or
misconduct in the performance of his duties to the Association. All such
determinations hereunder shall be made by a majority of those members of the
Board of Directors who were not parties to such proceeding, or by one or more
disinterested persons to whom the question shall be referred by the Board of
Directors. Such right of indemnification shall not be deemed exclusive of any
other rights to which such director, officer, or employee may be entitled apart
from this provision.
9
<PAGE>
Seventh. This Association shall have succession from the date of its
organization certificate until such time as it be dissolved by the act of its
shareholders in accordance with the provisions of the banking laws of the United
States, or until its franchise becomes forfeited by reason of violation of law,
or until terminated by either a general or a special act of Congress, or until
its affairs be placed in the hands of a receiver and finally wound up by him.
Eighth. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than ten per centum of the stock
of this Association, may call a special meeting of shareholders at any time:
Provided, however, that, unless otherwise provided by law, not less than ten
days prior to the date fixed for any such meeting, a notice of the time, place,
and purpose of the meeting shall be given by first-class mail, postage prepaid,
to all shareholders of record of this Association at their respective addresses
as shown upon the books of the Association. These Articles of Association may be
amended at any regular or special meeting of the shareholders by the affirmative
vote of the shareholders owning at least a majority of the stock of this
Association, subject to the provisions of the banking laws of the United States.
The notice of any shareholders' meeting, at which an amendment to the Articles
of Association of this Association is to be considered, shall be given as
hereinabove set forth.
* * *
Certified to be a true copy of the Articles of Association of American National
Bank and Trust Company of Chicago, as amended, now in force and effect.
Date: February 3, 1998
(Seal)
10
<PAGE>
EXHIBIT 4
_______________________________________________________________________________
_______________________________________________________________________________
By-Laws
of
American National Bank
and Trust Company of Chicago
(As Amended and Restated February 2, 1996)
Charter No. 13216
_______________________________________________________________________________
_______________________________________________________________________________
February, 1996
11
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article I Meetings of Shareholders.................................... 1
Article II Directors................................................... 2
Article III Officers.................................................... 4
Article IV Transfers of Real Estate.................................... 5
Article V Contracts and Voting........................................ 5
Article VI Authority to Sell Stocks, Bonds, etc. ...................... 6
Article VII Stock Certificates & the Transfer Thereof................... 6
Article VIII Increase of Stock........................................... 7
Article IX Banking Hours............................................... 7
Article X Seal........................................................ 8
Article XI Trust Department............................................ 8
Article XII Amendments of By-Laws....................................... 9
</TABLE>
12
[CAPTION]
<PAGE>
BY-LAWS
of
AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO
(As Amended and Restated February 2, 1996)
Charter No. 13216
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of shareholders shall be held on
the first Friday of February each year or at such other date as is from time to
time designated by the Board of Directors (the "Board"), for the purpose of
electing directors and the transaction of such other business as may come before
the meeting. If the election of directors shall not be held on the day
designated for the annual meeting, or at any adjournment thereof, the Board
shall cause the election to be held at a meeting of the shareholders as soon
thereafter as possible.
SECTION 2. SPECIAL MEETINGS. The Board, or shareholders owning in the aggregate
not less than 10 percent of the stock of the Bank, may call a special meeting of
shareholders at any time for the purpose or purposes stated in the call of the
meeting.
SECTION 3. PLACE OF MEETINGS. Shareholder meetings shall be held at the main
banking office of the Bank or at such other convenient place established by the
Board.
SECTION 4. NOTICE OF MEETINGS. The Chairman of the Board or the Secretary shall
give written notice stating the place, day and hour of each meeting of
shareholders and, in case of a special meeting, the purpose or purposes for
which the meeting is called. Such notice shall be delivered not less than ten,
nor more than forty days before the date of the meeting, either personally or by
mail to each shareholder of record entitled to vote at such meeting. If mailed,
such notices shall be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears on the records
of the Bank with postage thereon prepaid. Such notice may be waived in writing.
SECTION 5. PRESIDING OFFICER. The Chairman of the Board, if present, shall
preside at all shareholder meetings. In the Chairman's absence, the President,
if present, shall preside. In the absence of the Chairman and President, the
shareholders may elect a Chairman pro tem to preside at the meeting.
13
<PAGE>
SECTION 6. QUORUM; MAJORITY VOTE. A majority of the outstanding shares of
stock, represented in person or by proxy, shall constitute a quorum at any
meeting of the shareholders, provided that if less than a majority of the
outstanding shares of stock are represented at said meeting, a majority of the
shares of stock so represented may adjourn the meeting from time to time without
further notice. If a quorum is present, the affirmative vote of the majority of
shares represented at the meeting shall be the act of the shareholders.
SECTION 7. PROXIES. Proxies may be secured for annual and special meetings,
shall be dated, and shall be filed with the Secretary of the Bank before or at
the time of the meeting. At all meetings of the shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his attorney-in-fact.
No proxy shall be valid eleven months from the date of its execution, unless
otherwise provided in the proxy. No officer or employee of the Bank may act as
proxy.
SECTION 8. VOTING RIGHTS. Each outstanding share shall be entitled to one vote
on each matter submitted to a vote at a meeting of shareholders.
SECTION 9. Consent of Shareholders In Lieu of Annual or Special Meeting. Unless
otherwise restricted by the Articles of Association or by law, any action which
may be taken at any annual or special shareholder meeting may be taken without a
meeting, without prior notice and without a vote, if written consent setting
forth the action so taken shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those shareholders who did not give written consent.
ARTICLE II
DIRECTORS
SECTION 1. AUTHORITY. The property and business of the Bank shall be managed by
the Board, which shall have all of the powers conferred by law, the Articles of
Association and these by-laws.
SECTION 2. NUMBER. The Board shall at all times consist of not less than five
nor more than twenty-five individuals. The exact number within such minimum and
maximum limits shall be fixed and determined from time to time by resolution of
a majority of the full Board or by resolution of the shareholders at any meeting
thereof; provided, however, that the Board may not increase the number of
directors to a number which: (i) exceeds by more than two the number of
directors last elected by shareholders where such number was fifteen or less; or
(ii) exceeds by
14
<PAGE>
more than four the number of directors last elected by shareholders where such
number was sixteen or more, but in no event shall the number of directors exceed
twenty-five.
SECTION 3. TERM OF OFFICE. Each director shall hold office from the date of his
election or appointment until the next annual shareholder meeting. Any director
ceasing to be the owner of the amount of stock required by law or in any other
manner becoming disqualified, shall thereby vacate his office as director. A
director who is an officer of the Bank or one of its affiliates shall not stand
for re-election to the Board at the annual meeting coincident with or next
following the date of his retirement or other termination of employment from the
Bank or such affiliate. A director who is not an officer of the Bank or any such
affiliate shall not stand for re-election to the Board at the annual meeting of
the Bank held in the third year following the year in which he retired from his
principal occupation; provided, however, that no director shall be eligible for
re-election at the annual meeting of the Bank next following his 73rd birthday.
The Board may fill any vacancy which occurs in the Board at any regular meeting
of the Board or at a special meeting called for that purpose.
SECTION 4. COMPENSATION. By resolution, the Board may provide that a reasonable
fee be paid to any of its members or to the members of any duly authorized
committee for services rendered. No such payment shall preclude any director
from serving the Bank in any other capacity and receiving compensation therefor.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Board shall be held on
such dates, times and locations as determined by the Chairman of the Board and
communicated to the directors in writing by the beginning of each calendar year
for that calendar year.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board may be held at any
time and at any place upon the call of the Chairman of the Board or upon the
call of at least three directors. Notice of special meetings shall state the
meeting's purpose, and shall be given to each director in person, by facsimile
transmission, by telephone, by overnight delivery service, or by U.S. first
class mail addressed to his usual place of business or to his residence.
Personal notice or notice by facsimile transmission or telephone shall be given
not later than the second day before the meeting. A director's attendance at a
special meeting shall constitute a waiver of notice of such meeting, except when
the director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
SECTION 7. QUORUM; MAJORITY VOTE. A quorum of directors shall be required to
transact business at any regular or special meeting of the Board. A majority of
the directors shall constitute a quorum. Each director shall be entitled to one
vote. A vote by a majority of the directors present at any regular or special
meeting of the Board at which a quorum is present shall be required to approve
any matter or proposal at any such meeting.
SECTION 8. PRESIDING OFFICER. The Chairman of the Board, if present, shall
preside at all meetings of the Board. The President, if present, shall preside
at meetings of the Board in the
15
<PAGE>
Chairman's absence. In the absence of both the Chairman and the President, the
Board shall designate another one of their members to so preside.
SECTION 9. MINUTES OF MEETING. The Board shall appoint a Secretary, who need
not be a member of the Board, to take minutes at any regular or special meeting
of the Board. If the Secretary is not present at any such meeting, the Chairman
of the Board may designate a secretary pro tem to take minutes at the meeting.
The Secretary or secretary pro tem shall record the actions and proceedings at
each regular or special meeting of the Board as minutes of the meeting and shall
maintain such minutes in a minute book of proceedings of such meetings of the
Board. Minutes of each such meeting shall be signed by the presiding officer and
secretary of each meeting.
SECTION 10. PARTICIPATION IN MEETINGS BY TELEPHONE. Unless otherwise restricted
by the Articles of Association or by law, members of the Board or any committee
designated by the Board may participate in a meeting of the Board or committee
by means of conference telephone or similar communications equipment which
allows each person participating in the meeting to hear each other.
Participation in such a meeting shall constitute presence in person at such
meeting.
SECTION 11. CONSENT OF DIRECTORS IN LIEU OF MEETING. Unless otherwise provided
in the Articles of Association or by law, any action required to be taken at a
meeting of the Board or any action which may be taken at a regular or special
meeting of the Board or a committee thereof, may be taken without a meeting,
without prior notice and without a vote, if written consent setting forth the
action so taken is signed by all of the directors that would be necessary to
authorize or take such action at a regular or special meeting of the board.
SECTION 12. COMMITTEES. The Board may, from time to time, establish such
committees as it deems appropriate and as required by law. Any such committee
shall be comprised of such members, shall have such authority and shall conduct
its activities in such manner as is provided in the resolution establishing the
committee. The members of any such committee who are not officers of the Bank
shall receive such compensation as the Board determines from time to time. The
Chairman of the Board shall be an ex-officio member of all committees of the
Board.
ARTICLE III
OFFICERS
SECTION 1. OFFICER TITLES. The titles of the officers of the Bank may include
the Chairman of the Board, one or more Vice Chairmen of the Board, a President,
one or more Executive Vice Presidents, one or more Senior Vice Presidents, a
Chief Credit Officer, a Chief Trust Officer, a Chief Financial Officer, a
General Auditor, a General Counsel, one or more Vice Presidents, a Cashier, a
Secretary, one or more Assistant Secretaries, one or more Trust Officers, and
such other officers as may be appropriate for the prompt and orderly transaction
of the business of the Bank. Individuals appointed as Chairman and Vice Chairman
of the Board and President must be members of the Board. The same person may
hold any two or more offices. The Chairman
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of the Board and the President shall have the authority to establish all officer
titles below the level of Senior Vice President.
SECTION 2. ELECTION OF OFFICERS. The Chairman of the Board and the President
shall be elected by the Board for the current year for which such Board was
elected and each shall hold his office for such year unless he shall resign,
become disqualified or be removed. Officers at the level of Senior Vice
President and above shall be elected by the Board. The Chairman of the Board and
the President shall have the authority to appoint all other officers, and to
further delegate such authority to other officers of the Bank.
SECTION 3. AUTHORITY AND RESPONSIBILITY. The authorities and responsibilities
of all officers, in addition to those specifically prescribed herein, shall be
those usually pertaining to their respective offices, or as may be designated by
the Board or by the Chairman of the Board or by the President, or by any officer
of the Bank designated by one of the foregoing.
SECTION 4. MISCELLANEOUS. All officers and employees of the Bank who shall be
responsible for any moneys, funds or valuables of the Bank shall give bond, or
be covered by a blanket bond, in such penal sum and with such security as shall
be approved by the Board, conditioned for the faithful and honest discharge of
their duties as such officers or employees and that they will faithfully apply
and account for all such moneys, funds and valuables and deliver the same on
proper demand to the order of the Board of this Bank, or to the person or
persons authorized to receive the same.
SECTION 5. TERM OF OFFICE. Officers shall be appointed for an indefinite term,
and their employment may be terminated and/or they may be removed from office at
any time. The Bank's holding company, First Chicago NBD Corporation, may
terminate and/or remove the Chairman of the Board, the President and the Chief
Executive Officer. The Chairman of the Board, the President, and their
designates have the authority to terminate and/or remove all other officers. The
salary of any officer whose employment terminates shall cease as of the date of
his termination, and he shall cease to be an officer as of the date of
termination.
ARTICLE IV
TRANSFERS OF REAL ESTATE
The Chairman of the Board, the President and any Vice President or above of the
Bank shall have authority (without an order of the Board) to execute and deliver
on behalf of and in the name of the Bank, deeds or contracts for deeds conveying
any real estate owned by the Bank in its own right or in which the Bank has an
interest either with or without covenants of warranty, and the same shall be
attested to by any of such officers of the Bank other than the officers so
executing said instruments; provided, however, that deeds, contracts or leases
with respect to any real estate used by the Bank as its banking quarters, must
be executed by an executive vice president or above, or an officer designated by
an executive vice president or above. All releases of mortgages or trust
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deeds shall be executed in the same manner as provided in the preceding sentence
in respect of transfers and conveyances of real estate in which this Bank has an
interest.
ARTICLE V
CONTRACTS AND VOTING
SECTION 1. EXECUTION OF INSTRUMENTS ON BEHALF OF BANK. Any officer of the Bank
and such other persons as may be authorized by the Chairman of the Board or the
President from time to time are severally and respectively authorized to execute
documents and take action(s) in the Bank's name in connection with transactions
conducted in the ordinary course of business including, without limitation, to
guarantee signatures, certify resolutions and/or agreements, endorse checks,
drafts and notes, sign orders for the deposit of securities and for the
withdrawal of securities deposited with the bank correspondents of this Bank.
Notwithstanding the foregoing, (i) all notes evidencing obligations of the Bank
must be executed and delivered by a Vice President of the Bank or above, or the
Cashier, (ii) letters of credit must be signed and issued by two designated
officers or by a designated officer and any employee who shall be authorized to
do so by the Chairman of the Board or the President.
SECTION 2. VOTING. The vote of this Bank as stockholder in any corporation in
which it may hold stock or upon any securities carrying voting rights which it
shall have the right to vote in its individual capacity as a Bank, shall be cast
at any stockholders' meeting by any Vice President or above, or the Cashier, in
person, or by some person or persons authorized by written proxy signed by one
of said officers. In all cases where shares of stock or other securities
carrying voting rights and owned by this Bank shall be held in the name of a
nominee of the Bank, any Vice President or above, or the Cashier may authorize
such nominee to vote such stock or other securities in person, either
unconditionally or upon such terms, limitations, or conditions as such officer
may direct, or any such officer may authorize such nominee to execute a proxy to
vote such shares of stock or other securities carrying voting rights, either
unconditionally or upon such terms, limitations or conditions as such officer
shall approve.
ARTICLE VI
AUTHORITY TO SELL STOCKS, BONDS, ETC.
Any two officers from the group consisting of Vice Presidents and above and the
Cashier or such officers as authorized from time to time by the Board, may at
any time jointly:
(1) Sell, assign, and transfer any and all United States registered bonds now
standing, or which may hereafter stand in the name of the Bank;
(2) Sell, assign, and transfer any and all notes, bonds, certificates of
indebtedness or obligations of any corporation, firm or individual, which notes,
bonds, certificates of indebtedness or
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obligations are now registered or may hereafter be registered in the name of
this Bank, or are payable or endorsed to this Bank; or
(3) Sell, assign, and transfer to any assignee or transferee, for and on behalf
of this Bank and in its name, any and all shares of capital stock of any
corporation or corporations held by this Bank.
ARTICLE VII
STOCK CERTIFICATES AND THE TRANSFER THEREOF
SECTION 1. TRANSFERABILITY OF SHARES. Shares of stock of this Bank shall be
transferable only upon the books of the Bank, subject to the provisions of the
National Bank Act. The Bank shall maintain a transfer book in which all
transfers of such stock shall be recorded. Transfers of stock may be suspended
preparatory to any election or payment of any dividends.
SECTION 2. RECORD DATE. The Board shall have power to fix a date of record of
stock holdings for purposes of notices of shareholders' meetings, voting rights
at such meetings, the payment of dividends, or any other proper purpose.
SECTION 3. MISCELLANEOUS. All stock certificates shall be signed with a manual
or facsimile signature by any Vice President or above, and by another of such
officers or the Secretary or Cashier, and the seal of the Bank shall be
impressed thereon or a facsimile thereof printed thereon. Each certificate shall
also be signed manually by the Chief Financial Officer or General Auditor, on
behalf of the Bank as registrar, and by a duly authorized officer or employee of
the trust department as transfer agent. Each certificate shall recite on its
face that the stock represented thereby is transferable only upon the books of
the Bank by the holder thereof, or the holder's attorney, upon surrender of the
certificate, and when stock is transferred, the certificates thereof shall be
returned to the Bank, canceled, preserved, and new certificates issued. In case
of loss of any certificates a new one executed in the manner above provided,
shall be issued in lieu thereof upon proof satisfactory to the Chairman of the
Board, the President, any Executive Vice President, or the Chief Trust Officer
of such loss and upon appropriate indemnity if required by such officer.
ARTICLE VIII
INCREASE OF STOCK
In the event of any increase in the capital stock of this Bank, the preemptive
rights of the shareholders, if any, in respect of any such increased stock shall
be set forth in the Articles of Association. Any warrants or certificates
issuable to shareholders in connection with any increase of the capital stock of
this Bank shall be delivered to the respective shareholders entitled thereto,
either by hand or by mail, first-class postage prepaid, addressed to their
respective addresses as shown on the books of the Bank. If, in the event of sale
of additional shares, any subscription rights shall not have been exercised at
the expiration of the specified subscription period, such
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unsubscribed new shares may be issued and sold at such price, not less than the
par value thereof, to such persons and on such terms as the Directors may
determine.
ARTICLE IX
BANKING HOURS
The Bank shall be open for business during such days of the year and during such
hours of the day as the Chairman of the Board or the President or their
designate shall determine.
ARTICLE X
SEAL
The seal of the Bank shall be circular in form and the words AMERICAN NATIONAL
BANK AND TRUST COMPANY OF CHICAGO-CORPORATE SEAL thereon. Such seal or a
facsimile thereof may be affixed to or printed on any instrument requiring the
same and attested by the Chief Financial Officer, the Cashier, the Secretary,
any Assistant Secretary, any Trust Officer, or any other officer thereunto
designated by the Board.
ARTICLE XI
TRUST DEPARTMENT
SECTION 1. EXERCISE OF FIDUCIARY POWERS. All fiduciary powers of the Bank shall
be exercised through the trust department, subject to all applicable laws and
governmental regulations. The Bank shall maintain separate books and records for
the trust department that are distinct from the other books and records of the
Bank.
SECTION 2. CHIEF TRUST OFFICER. All operations and fiduciary activities of the
trust department shall be the responsibility of the Chief Trust Officer, subject
to the powers and duties of the Board, the Committees appointed by the Board,
the Chairman of the Board, the President, and any Executive Vice President. The
Board may appoint one or more Vice Presidents and/or Trust Officers in addition
to the Chief Trust Officer to administer said trust department, who shall have
such powers and perform such duties as may be prescribed by these By-laws or as
may be delegated to them by the Chief Trust Officer, the Board, the Chairman of
the Board, the President, or any Executive Vice President.
SECTION 3. EXECUTION OF INSTRUMENTS. Any Trust Officer or above, the Secretary,
any Assistant Secretary, the Cashier, the Chief Financial Officer, or any other
officer or person appointed by the Chairman of the Board or the President or
their designate, for that purpose, or for
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the purpose of appointing vault custodians may sign, execute, acknowledge,
deliver and accept on behalf of the Bank all checks against any trust department
account or accounts and all agreements, indentures, mortgages, deeds,
conveyances, releases, transfers, assignments, certificates, declarations,
receipts, discharges, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings and other instruments or documents in
connection with the exercise of any of the fiduciary powers of the Bank in the
ordinary course of business of the trust department.
SECTION 4. AUTHENTICATION OF INSTRUMENTS. All authentication or certificates by
the Bank as trustee under any mortgage, deed of trust or other instrument
securing bonds, notes, debentures or other obligations of any person or
corporation, and all certificates as registrar or transfer agent, and all
certificates of deposit for stocks, bonds, or other securities, and interim and
trust certificates may be signed or countersigned on behalf of the Bank by any
of the officers designated in the preceding Section hereof or by any other
person appointed by the Chairman of the Board or the President or their
designate and when so signed shall be binding on the Bank as the valid act of
the Bank.
SECTION 5. VOTING. The vote of this Bank as stockholder in any corporation in
which it may hold capital stocks trustee or other fiduciary capacity may be cast
at the stockholders' meetings of such corporation by any Trust Officer or above,
the Secretary, any Assistant Secretary, in person or by some person authorized
by written proxy signed by one of said officers; provided, however, that such
proxy if given to any person not an officer or director of this Bank shall be
limited to a single meeting and shall either be limited to voting for trustees
or directors or shall direct how such proxy holder shall vote. The above
provision, however, shall not apply to stock held by this Bank under a written
agreement which expressly provides for the giving of proxies. Whenever this Bank
has been or may be appointed attorney in fact with power of substitution in and
about the transfer of shares of capital stock of any corporation, any Second
Vice President or above may substitute by proper written instrument an attorney
in fact to act in the place and stead of this Bank in and about such transfer.
ARTICLE XII
AMENDMENTS OF BY-LAWS
The Board may amend these By-laws in any respect to the extent permitted at law
at any regular or special meeting of the Board or shareholders duly called for
that purpose, by a vote of a majority of the Board or a majority of the
shareholders.
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EXHIBIT 6
CONSENT OF TRUST UNDER SECTION 321(b) OF THE
TRUST INDENTURE ACT OF 1939
The American National Bank and Trust Company of Chicago hereby consents
that reports of examination of said bank by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Such reports shall be used for the purposes and subject to the limitations
and conditions set forth in Section 321(b) of the Trust Indenture Act of 1939.
Dated: February 3, 1998
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/ Anjali Gottreich
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Its: Assistant Vice President
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