<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 10, 1997
REGISTRATION NO. 333-36337
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MAIL-WELL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
COLORADO 84-1250533
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
23 INVERNESS WAY, SUITE 160
ENGLEWOOD, CO 80112
(303) 790-8023
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
ROGER WERTHEIMER, ESQ.
23 INVERNESS WAY, SUITE 160
ENGLEWOOD, CO 80112
(303) 790-8023
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
HERBERT H. DAVIS III, ESQ.
ROTHGERBER, APPEL, POWERS & JOHNSON LLP
1200 SEVENTEENTH STREET, SUITE 3000
DENVER, COLORADO 80202
(303) 623-9000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: from time
to time after this Registration Statement becomes effective.
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 of 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. [_]
---------------
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 SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THE OFFERED 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 SUCH REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING 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 NOVEMBER 29, 1997
PROSPECTUS SUPPLEMENT
(To Prospectus Dated November , 1997)
- --------------------------------------------------------------------------------
$150,000,000
[LOGO OF MAIL-WELL, INC. MAIL-WELL, INC.
APPEARS HERE]
% Convertible Subordinated Notes Due 2002
- --------------------------------------------------------------------------------
The % Convertible Subordinated Notes due 2002 (the "Notes") of Mail-Well,
Inc. (the "Company") are convertible at the option of the holder at any time
after 60 days following the date of original issuance thereof and prior to
maturity, unless previously redeemed or repurchased, into shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), at a
conversion price of $ per share (equivalent to a conversion rate of
shares per $1,000 principal amount of Notes), subject to certain adjustments.
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "MWL." On October 27, 1997 the last reported sales
price of the Company's Common Stock on the NYSE was $34.50 per share. The
Company intends to apply to have the Notes listed for trading on the NYSE under
the symbol " ".
The Notes will bear interest at the rate of % per annum from November , 1997,
payable in arrears on May 1 and November 1 of each month, commencing May 1,
1998. The Notes are redeemable at the option of the Company, in whole or in
part, at any time on or after November 1, 2000 at the redemption prices set
forth herein together with accrued and unpaid interest. The Notes do not
provide for any sinking fund. Upon the occurrence of a Designated Event (as
defined herein), each holder of the Notes may require the Company to repurchase
all or a portion of such holder's Notes at 101% of the principal amount
thereof, together with accrued and unpaid interest, if any, to the date of
repurchase. See "Description of Notes."
The Notes will constitute unsecured subordinated obligations of the Company and
will rank pari passu in right of payment to the Company's other subordinated
indebtedness, if any. The Notes and the Company's obligations with respect
thereto (including the Company's obligation to repurchase Notes upon the
occurrence of a Designated Event) will be subordinated in right of payment to
all Senior Debt (as defined herein) of the Company and effectively subordinated
to all future and outstanding indebtedness of the Company's subsidiaries. See
"Description of Notes--Subordination of Notes." At September 30, 1997, on a pro
forma basis giving effect to the Offering and the Common Stock Offering (as
such terms are defined below), the Company had no outstanding Senior Debt and
the Company's subsidiaries had approximately $94 million of outstanding
Indebtedness (as defined herein) and other liabilities. See "Capitilization."
The Indenture (as defined herein) does not prohibit or limit the incurrance of
additional Senior Debt or additional Indebtedness of the Company or its
subsidiaries. See "Risk Factors" herein and in the accompanying Prospectus.
Concurrently with the Offering of Notes being made by this Prospectus
Supplement, the Company and certain shareholders of the Company are offering
3,820,200 shares of Common Stock (the "Common Stock Offering"). The offering of
Notes made hereby (the "Offering") and the Common Stock Offering are not
contingent upon one another.
SEE "RISK FACTORS" ON PAGES S-7 TO S-8 HEREIN AND "RISK FACTORS" ON PAGES 4 TO
8 IN THE ACCOMPANYING PROSPECTUS FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES OFFERED
HEREBY.
- --------------------------------------------------------------------------------
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 SUPPLEMENT OR ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions(2) Company(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.................................. % % %
- --------------------------------------------------------------------------------
Total(4).................................. $ $ $
</TABLE>
================================================================================
(1) Plus accrued interest, if any, from November , 1997.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Before deducting offering expenses payable by the Company estimated to be
$ .
(4) The Company has granted the several Underwriters a 30-day over-allotment
option to purchase up to an additional $22,500,000 aggregate principal
amount of Notes on the same terms and conditions as set forth above. If all
such additional Notes are purchased by the Underwriters, the total Price to
Public will be $ , the total Underwriting Discounts and Commissions will
be $ , and the total Proceeds to Company will be $ . See
"Underwriting."
- --------------------------------------------------------------------------------
The Notes are offered by the several Underwriters subject to delivery by the
Company and acceptance by the Underwriters, to prior sale and to withdrawal,
cancellation or modification of the offer without notice. Delivery of the Notes
to the Underwriters is expected to be made at the office of Prudential
Securities Incorporated or in book entry form through the facilities of the
Depository Trust Company, on or about November , 1997 against payment therefor
in immediately available funds.
PRUDENTIAL SECURITIES INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HANIFEN, IMHOFF INC.
November , 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OR THE
COMMON STOCK, INCLUDING PURCHASES OF THE NOTES OR THE COMMON STOCK TO
STABILIZE THE MARKET PRICES THEREOF, PURCHASES OF THE NOTES OR THE COMMON
STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE NOTES MAINTAINED BY THE
UNDERWRITERS, AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified by, and should be read in conjunction
with, the more detailed information and consolidated financial statements,
including the notes thereto, appearing elsewhere in this Prospectus Supplement,
in the accompanying Prospectus and in the documents incorporated by reference
herein. Except as otherwise indicated, the information contained in this
Prospectus Supplement assumes that the underwriters over-allotment option will
not be exercised. As used in this Prospectus Supplement, the "Company" refers
to Mail-Well, Inc., a Colorado corporation, and its subsidiaries as well as to
the business operations of their predecessors. Investors should consider
carefully the information set forth under "Risk Factors" included herein and
under "Risk Factors" in the accompanying Prospectus.
THE COMPANY
Mail-Well, Inc. (the "Company") is a leading consolidator in the highly
fragmented envelope and high-impact color printing industries. From December 1,
1994 through September 30, 1997, the Company completed ten acquisitions in the
envelope and commercial printing industries, ranging in size from $6.1 million
to $97.4 million. As a result of its consolidation strategy, the Company has
become the largest printer and manufacturer of envelopes in the United States
and Canada, competing primarily in the higher-margin consumer direct market
segment of the envelope industry in which envelopes are designed and
manufactured to customer specifications, as well as the leading high-impact
color printer in the United States.
Since its formation in 1994, the Company has achieved significant growth in
both revenues and net income through its acquisition strategy, internal growth
and the use of operating leverage. As a result of these strategies, revenue and
net income increased to $778.5 million and $16.9 million, respectively, for the
Company in 1996 from $262.3 million and $1.4 million, respectively, for the
Company and its predecessors in 1994. For the six months ended June 30, 1997,
the Company's revenue and net income grew to $419.5 million and $12.6 million,
respectively, from $378.8 million and $6.4 million, respectively, during the
same period in 1996.
The Company believes that there continue to be significant consolidation
opportunities in the envelope and high-impact color printing industries. There
are approximately 215 independent envelope companies in the United States and
Canada, generating in excess of $3.0 billion in annual revenues. The Company
estimates that there are approximately 500 commercial printing companies in the
United States competing in the high-impact color segment of the printing
industry, generating approximately $3.5 billion in annual revenues in that
segment.
As of September 30, 1997, the Company and its subsidiaries operated 53
envelope plants and printing facilities throughout the United States and Canada
serving over 40,000 customers. The Company's envelope products include standard
size envelopes as well as envelopes with features customized for mass mailing
markets. The Company also produces medical folders, overnight mailers,
photofinishing envelopes, airline and car rental jackets, tags and interoffice
envelopes. The Company's high-impact printed products are designed to elicit
the maximum response from the reader and include advertising literature, high-
end catalogs and brochures, calendars and annual reports. The Company is
recognized as an innovative provider of quality printed products to leading
companies throughout the United States.
S-3
<PAGE>
BUSINESS STRATEGY
The Company's objective is to continue to increase its profits through
acquisitions and an operating strategy that enhances internal growth and
achieves cost efficiencies. The key elements of the Company's strategy include:
Strategic Acquisitions. The Company believes that the envelope and high-
impact color printing industries are highly fragmented and present significant
opportunities for consolidation. The Company's growth strategy includes the
acquisition of established and profitable envelope and high-impact color
printing businesses in markets with attractive growth opportunities. The
Company seeks acquisition targets with strong management infrastructures and
opportunities to increase operating efficiencies as well as to expand the
Company's customer base, presence in geographic areas, and product lines. The
Company's management team has extensive experience in identifying attractive
acquisition targets and integrating acquired businesses into its operations.
Internal Sales Growth. A key component of the Company's strategy is to
accelerate internal sales growth for both its envelope and high-impact color
printing segments. The key elements of this internal growth strategy include
the expansion of the products and services sold to existing customers and the
addition of new customers. The Company believes that it has the ability to
combine the responsiveness of a local facility with the full service advantages
of a large national company, and intends to increase growth in each of its
regions by adding complementary products and services to its operations. For
example, most of the Company's envelope manufacturing facilities produce only a
portion of the envelope products available from the Company as a whole. By
targeting markets in which the Company believes there is demand for additional
product lines, the Company believes it may be able to achieve significant
internal growth.
National Sales and Marketing Program. The Company has begun to establish a
sales and marketing program targeting national accounts as a means to expand
its envelope and high-impact printing business. The Company believes that this
program will allow it to both utilize its current network of strategically
located plants and sales offices to attract new customers that require
production from multiple locations, as well as to offer existing customers
greater flexibility in meeting their needs due to more available capacity and
equipment capabilities.
Operating Margins. The Company has realized and believes that it will
continue to realize cost savings as a result of volume related purchases of
paper, ink and other raw materials. The Company has also begun to achieve cost
savings through the consolidation of insurance administration, employee health
benefits, financial management and other administrative functions. The Company
also believes that its purchasing power will reduce the risk of constraints on
paper allocation from suppliers during periods of tight supply. The Company
believes that by continuing to centralize certain administrative and support
functions, the management of its operating subsidiaries and businesses acquired
in the future will be able to focus on pursuing new customers and business
opportunities and increasing capacity utilization.
Operating Efficiencies. The Company believes that there may be opportunities
to eliminate redundant facilities and equipment by consolidation or through
coordination among its current operations as well as operations to be acquired
in the future. The Company periodically reviews its operations at the local and
regional operating levels (as well as examining other industry practices) in
order to identify certain "best practices" that can be standardized and
implemented throughout its operations.
S-4
<PAGE>
ACQUISITIONS
The Company was formed in 1994 through the acquisition of the Mail-Well
Envelope division of the Georgia-Pacific Corporation ("GP Envelope"), and the
acquisition of the Pavey Envelope and Tag Corporation ("Pavey"). Since then,
the Company has built its business through a series of strategic acquisitions.
The following table sets forth certain information with respect to such
acquisitions:
<TABLE>
<CAPTION>
DATE OF GEOGRAPHIC ANNUAL REVENUES(1)
COMPANY ACQUISITION LOCATION PRODUCTS (IN MILLIONS)
------- -------------- ------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
American Envelope....... December 1994 National Envelopes $180
Supremex................ July 1995 Canada Envelopes 90
Graphic Arts Center..... August 1995 Portland High-Impact Color 140
Printing
Quality Park Products... April 1996 Atlanta, St. George Envelopes 90
(UT), Beresford (SD)
Pac National Group
Products............... November 1996 Ontario, Canada Envelopes 44
Shepard Poorman High-Impact Color
Communications......... December 1996 Indianapolis Printing 50
Griffin Envelope........ June 1997 Seattle Envelopes 12
The Allied Printers..... July 1997 Seattle High-Impact Color 17
Printing
Murray Envelope......... July 1997 Hattiesburg (MS) Envelopes 48
National Color September 1997 Atlanta High-Impact Color 23
Graphics............... Printing
</TABLE>
- --------
(1) Represents the approximate revenues for the twelve months preceding the
date of acquisition.
RECENT FINANCIAL RESULTS
The Company has recently announced its results of operations for the quarter
and the nine months ended September 30, 1997. For the quarter ended September
30, 1997, sales increased 16.5% to $233.5 million from $200.5 million in the
same period in 1996. Third quarter 1997 net income was $7.5 million, an
increase of 49.4% over the $5.0 million in 1996. Third quarter earnings per
share increased to $0.40 per share in 1997 compared to $0.28 per share in 1996.
For the nine months ended September 30, 1997, sales increased 12.7% to $653.0
million from $579.3 in the same period in 1996. For the nine months ended
September 30, 1997, the Company reported net income of $20.1 million, a 76.3%
increase over the $11.4 million in net income for the same period a year ago.
Earnings per share for the nine months ended September 30, 1997 increased 68.8%
to $1.08 per share from $0.64 per share for the same period in 1996.
RISK FACTORS
Investors should consider the material risk factors involved in connection
with an investment in the Notes and the impact to investors from various events
that could adversely affect the Company's business. See "Risk Factors" included
herein as well as "Risk Factors" in the accompanying Prospectus.
S-5
<PAGE>
THE OFFERING
Securities Offered $150,000,000 aggregate principal amount %
Hereby................... Convertible Subordinated Notes due 2002 (the
"Notes") ($172,500,000 aggregate principal amount
if the Underwriters' over-allotment option is
exercised in full) See "Description of Notes."
Interest Rate............. % per annum on the principal amount, payable
semiannually in arrears in cash on May 1 and
November 1 of each year, commencing May 1, 1998.
Conversion Rights......... Each Note will be convertible, at the option of the
holder, at any time after 60 days following the
date of original issuance thereof through maturity,
unless previously redeemed or otherwise purchased
by the Company, into Common Stock at the conversion
rate of shares per $1,000 principal amount of
the Notes (the "Conversion Rate"). The Conversion
Rate will be subject to adjustment upon the
occurrence of certain events affecting the Common
Stock. See "Description of Notes--Conversion of
Notes."
Subordination............. The Notes will be subordinated to all future Senior
Debt (as defined herein) and pari passu with
Indebtedness (as defined herein) of the Company
that is not Senior Debt. The Notes will also be
effectively subordinated to all existing and future
Indebtedness and liabilities of subsidiaries of the
Company. At September 30, 1997, on a pro forma
basis giving effect to the Offering and the Common
Stock Offering, the Company had no outstanding
Senior Debt and the Company's subsidiaries had
approximately $94 million of outstanding
Indebtedness and other liabilities. The Indenture
(as defined herein) does not prohibit or limit the
incurrence of additional Senior Debt or additional
Indebtedness of the subsidiaries. See "Risk
Factors" herein and in the accompanying Prospectus.
Redemption at the Option
of the Company........... The Notes are not redeemable by the Company prior
to November 1, 2000. Subject to the foregoing, the
Notes will be redeemable on at least 30 days'
notice at the option of the Company, in whole or in
part, at any time, at a Redemption Price as set
forth herein, together with accrued and unpaid
interest to the date of the redemption. See
"Description of Notes--Optional Redemption."
Repurchase at the Option
of the Holders...........
Upon the occurrence of any Change of Control (as
defined herein) or a Termination of Trading (as
defined herein) in the Company occurring prior to
the maturity of the Notes, each holder shall have
the right, at such holder's option, to require the
Company to purchase all or any part (provided that
the principal amount is $1,000 or an integral
multiple thereof) of such holder's Notes at a
Redemption Price equal to 101% of the principal
amount thereof, together with accrued and unpaid
interest up to the payment date (as defined
herein). See "Description of Notes--Repurchase at
the Option of Holders."
Use of Proceeds........... The net proceeds from the issuance of the Notes
will be used to repay a portion of the outstanding
Indebtedness of the Company's subsidiaries. See
"Use of Proceeds."
Listing................... The Company intends to apply to have the Notes
listed for trading on the NYSE under the symbol
" ".
Concurrent Offering of Concurrently with the Offering made hereby, the
Common Stock............. Company and certain shareholders of the Company are
offering 3,820,200 shares of Common Stock pursuant
to the Common Stock Offering. The Offering and the
Common Stock Offering are not contingent upon one
another.
S-6
<PAGE>
RISK FACTORS
An investment in the Notes offered hereby involves a high degree of risk. In
addition to the information set forth under "Risk Factors" in the accompanying
Prospectus, prospective investors should carefully consider the following
additional factors in connection with an investment in the Notes offered
hereby.
HOLDING COMPANY STRUCTURE; INDEBTEDNESS OF SUBSIDIARIES. The only asset of
the Company is the capital stock of Mail-Well I Corporation ("M-W
Corporation"). Because all of the operations of the Company are conducted
through its subsidiaries, the Company's cash flow and consequently its ability
to service debt, including the payment of principal and interest on the Notes,
is dependent upon the cash flow of its subsidiaries and the transfer of funds
by its subsidiaries to the Company in the form of loans, dividends or
otherwise. The subsidiaries are distinct legal entities and have no obligation
to pay any amounts due pursuant to the various obligations or Indebtedness of
the Company or to make any funds available therefor, whether in the form of
loans, dividends or otherwise.
In addition, the Company's subsidiaries are parties to certain credit
facilities with aggregate availability of $225 million (the "Credit
Facilities") which mature in 2003 and one of the Company's subsidiaries has
issued $85 million in subordinated notes (the "Subsidiary Notes") which are
guaranteed by the Company and mature in 2004. The Credit Facilities contain
provisions significantly restricting the ability of the Company to make
restricted payments (including the payment of dividends and other
distributions to the Company) and currently permit such restricted payments
only for purposes of (i) making principal and interest payments on the
Subsidiary Notes, (ii) covering the Company's administrative and tax expenses
and (iii) making payments relating to the Company's employee stock ownership
plan. In addition, the Credit Facilities permit the payment of up to 50% of
Excess Cash Flow (as defined therein) by the subsidiaries to the Company up to
a maximum amount of $12 million annually, with the balance going to mandatory
prepayment provisions. It is a condition to the closing of this Offering that
the Company repay in full amounts outstanding under and retire the Credit
Facilities. If the proceeds of the Offering together with the Common Stock
Offering are insufficient to repay the Credit Facilities in full, the Company
intends to utilize a temporary bridge facility which it is in the process of
finalizing in order to repay in full the Credit Facilities. In addition, the
Company expects to have in place a commitment for a permanent replacement
credit facility of approximately $250 million prior to expiration of the
bridge facility. The permanent facility is not expected to have an aggregate
restricted payment limitation similar to that contained in the existing Credit
Facilities. While the Company expects the permanent facility to contain more
favorable terms than its current indebtedness, such facility is expected to
contain certain restrictive covenants which could negatively impact its
ability to meet its obligations under the Notes in the event of defaults under
such facility.
In addition to the restricted payment provisions contained in the Credit
Facilities, pursuant to the indenture governing the Subsidiary Notes,
restricted payments (including the payment of dividends and other
distributions to the Company) are prohibited unless, after giving effect to
such payment (i) no default has occurred, (ii) the subsidiary would be
permitted to incur $1.00 of additional indebtedness under the applicable
indenture, (iii) the aggregate principal amount of all restricted payments
since the date of issuance of such notes on February 24, 1994 does not exceed
either 50% of Consolidated Net Income (as defined therein), the proceeds of
issuances of equity of the subsidiary or the aggregate amount of capital
contributions from the Company. The provisions governing restricted payments
contained in each of the Credit Facilities and the indenture governing the
Subsidiary Notes could significantly adversely effect the Company's ability to
make principal and interest payments with respect to the Notes.
In addition to limitations on restricted payments, the Credit Facilities and
the indenture governing the Subsidiary Notes contain, and any bridge or
permanent replacement credit facility is expected to contain, restrictive
covenants that, among other things, limit the ability of the subsidiaries to
incur additional indebtedness, prepay subordinated debt, transfer assets, pay
dividends or repurchase equity. In addition, these facilities require the
subsidiaries to satisfy certain financial covenants and tests and limit
capital expenditures to specified limits. The violation of any of these
restrictive provisions would cause an event of default under the respective
facilities, effectively prohibiting the ability of the subsidiaries to make
dividends or advances to the Company.
S-7
<PAGE>
SUBORDINATION. The Notes will be unsecured and subordinated in right of
payment in full to all future Senior Debt (as defined herein) of the Company.
As a result of such subordination, in the event of bankruptcy, liquidation or
reorganization of the Company or upon acceleration of the Notes due to an
Event of Default (as defined in the Indenture), the assets of the Company
would be available to pay obligations on the Notes only after all Senior Debt
has been paid in full, and there might not be sufficient assets remaining to
pay amounts due on any or all of the Notes then outstanding. In addition, the
Notes will be effectively subordinated to claims of creditors (including the
lenders under the Credit Facilities and the holders of the Subsidiary Notes)
of the Company's subsidiaries, including trade creditors, secured creditors,
taxing authorities, creditors holding guarantees, and tort claimants. In the
event of a liquidation, reorganization, or similar proceeding relating to a
subsidiary, these persons generally would have priority as to the assets of
such subsidiary over the claims and equity interest of the Company and,
thereby indirectly, holders of the Company's indebtedness, including the
Notes. The Indenture does not prohibit or limit the incurrence of Senior Debt
or the incurrence of other Indebtedness and other liabilities by the Company
or its subsidiaries, and the incurrence of additional Indebtedness and other
liabilities by the Company or its subsidiaries could adversely affect the
Company's ability to pay its obligations on the Notes. At September 30, 1997,
on a pro forma basis giving effect to the Offering and the Common Stock
Offering, the Company had no outstanding Senior Debt and the Company's
subsidiaries had outstanding indebtedness and other liabilities of
approximately $94 million.
LIMITATIONS ON REDEMPTION OF NOTES. Upon the occurrence of a Designated
Event (as defined herein), each holder of the Notes will have certain rights,
at the holder's option, to require the Company to redeem all or a portion of
such holder's Notes. If a Designated Event were to occur, there can be no
assurance that the Company would have sufficient funds to pay the Redemption
Price of all Notes tendered. The restricted payment provisions contained in
the Credit Facilities significantly restrict the Company's ability to redeem
the Notes and any future credit agreements of the Company or its subsidiaries
may contain similar provisions. In the event of the occurrence of a Designated
Event at a time when the Company is prohibited from purchasing or redeeming
the Notes, the Company could seek the consent of its lenders to the purchase
of the Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company would remain prohibited from purchasing or redeeming
Notes. In such case, the Company's failure to redeem tendered Notes would
constitute an Event of Default under the Indenture, which might, in turn,
constitute a default under the terms of agreements relating to other
Indebtedness that the Company may enter into from time to time. In such
circumstances, the subordination provisions in the Indenture would likely
restrict payments to the holders of the Notes.
ABSENCE OF PRIOR PUBLIC MARKET FOR THE NOTES. Prior to the Offering made
hereby, there has been no trading market for the Notes. Although the
Underwriters have advised the Company that 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 of 1933,
as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as
amended (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
sustained. If an active market for the Notes fails to develop or be sustained,
the trading price of such Notes could be materially adversely affected.
S-8
<PAGE>
USE OF PROCEEDS
The Company intends to use the net proceeds estimated to be $ ($ if
the Underwriters' over-allotment option is exercised in full) from the sale of
the Notes offered hereby to repay amounts outstanding under the Credit
Facilities. The Credit Facilities mature in 2003 and carry an interest rate of
LIBOR plus 175 basis points (7.41% at September 30, 1997). Pending any of the
foregoing applications, the net proceeds may be invested temporarily in short-
term, investment-grade, interest bearing securities or guaranteed obligations
of the United States government. The Company currently intends to use the
proceeds of the Common Stock Offering to repay the balance of the outstanding
indebtedness described above, as well as for general corporate purposes. See
"Capitalization."
PRICE RANGE OF COMMON STOCK
The Common Stock has been listed on the NYSE since December 1996 under the
symbol "MWL". Prior to that time, the Common Stock was included in the Nasdaq
Stock Market's National Market (that "Nasdaq National Market") under the
symbol "MLWL". The following table sets forth, for the periods indicated, the
range of high and low sales prices per share of the Common Stock as reported
by the NYSE or the Nasdaq National Market, respectively.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
1995
----
<S> <C> <C>
Fourth Quarter.................................................. $ 9.05 $ 7.12
1996
----
First Quarter................................................... $ 8.50 $ 5.44
Second Quarter.................................................. 6.53 5.19
Third Quarter................................................... 6.95 5.53
Fourth Quarter.................................................. 11.17 7.00
1997
----
First Quarter................................................... $14.50 $10.50
Second Quarter.................................................. 29.00 13.17
Third Quarter................................................... 34.50 25.38
Fourth Quarter (to October 27, 1997)............................ 38.75 27.38
</TABLE>
In June 1997, the Common Stock was split 3-for-2, and all prices reflect
such split. As of September 30, 1997, there were approximately 377
stockholders of record. On October 27, 1997, the last reported sales price of
the Common Stock on the NYSE was $34.50 per share.
DIVIDEND POLICY
The Company has not paid or declared a dividend on Common Stock since its
incorporation. The Company does not anticipate declaring or paying any
dividends on Common Stock in the foreseeable future because it intends to
retain earnings to finance the expansion of its business, to repay
indebtedness and for general corporate purposes. Any declaration and payment
of future dividends will be at the discretion of the Board of Directors and
will depend upon, among other things, the Company's earnings, financial
condition, capital requirements, level of indebtedness, contractual
restrictions with respect to payments of dividends and other relevant factors.
Certain of the Company's indebtedness limits the amount of dividends the
Company could pay before causing a default thereunder.
S-9
<PAGE>
CAPITALIZATION
The following table sets forth the historical capitalization of the Company
as of September 30, 1997 and as adjusted to reflect the application of the
estimated net proceeds from the Offering. This presentation should be read in
conjunction with the financial statements of the Company and related notes
incorporated by reference herein.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
----------------------
HISTORICAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current liabilities:
Current portion of long-term debt and capital
leases.......................................... $ 16,938 $ 334(1)
Long-term liabilities:
Capital Leases................................... 2,762 2,762
Bank borrowings.................................. 145,185 -- (1)
Senior Subordinated Notes........................ 85,000 85,000
Convertible Notes................................ -- 150,000
Other long-term debt............................. 5,472 5,472
-------- --------
Total long-term liabilities.................... 238,419 243,234
Minority interest.................................. 3,500 3,500
Stockholders' equity:
Preferred stock, $0.01 par value, 25,000 shares
authorized, none issued and outstanding......... -- --
Common stock, $0.01 par value, 30,000,000 shares
authorized; 18,834,732 issued and outstanding,
and 21,959,732 issued and outstanding, as
adjusted........................................ 188 220(2)
Paid-in capital.................................. 99,226 193,694(2)
Retained earnings................................ 47,728 42,323(3)
Unearned ESOP compensation....................... (3,307) (3,307)
Cumulative foreign currency translation
adjustment...................................... (313) (313)
Pension liability adjustment..................... (110) (110)
-------- --------
Total stockholders' equity..................... 143,412 232,507
-------- --------
Total capitalization............................... $402,269 $479,575
======== ========
</TABLE>
- --------
(1) Reflects the application of the estimated net proceeds of the Offering
made hereby plus a portion of the estimated net proceeds of the Common
Stock Offering. It is a condition to the closing of this Offering that the
Credit Facilities be repaid in full, either with the proceeds of this
Offering and the Common Stock Offering or through a combination of this
Offering and a bridge facility which the Company is in the process of
finalizing. In addition, the Company is in the process of obtaining a
permanent replacement credit facility which it expects to have in place
following consummation of the Offering. See "Risk Factors."
(2) Reflects the application of the estimated net proceeds of the Common Stock
Offering.
(3) Reflects effect of an extraordinary charge for the write-off of $5,405,000
net of income taxes, in deferred financing costs upon repayment of
outstanding debt.
S-10
<PAGE>
SELECTED FINANCIAL DATA
The summary of historical financial data presented below is derived from the
historical audited financial statements of the Company and its predecessors,
GP Envelope and Pavey, except for the data presented below for the interim
periods as of June 30, 1997 and 1996, and for the periods then ended, and as
of December 31, 1992 and for the year then ended, for GP Envelope which is
derived from the unaudited financial statements which, in the opinion of
management, reflect all adjustments, consisting of only normal, recurring
adjustments, necessary for a fair presentation of such information. The
historical balance sheet data as of December 31, 1994 include GP Envelope and
Pavey which were acquired on February 24, 1994 and American Envelope which was
acquired on December 19, 1994. The operations of GP Envelope, Pavey, American
Envelope, Supremex, Graphic Arts Center, Quality Park Products, Pac National
Group Products and Shepard Poorman Communications have been included in the
historical income statement data of the Company from their respective dates of
acquisition. The data presented below should be read in conjunction with the
Management's Discussion and Analysis of Financial Condition and Results of
Operations, the historical financial statements and the related notes thereto
included in the Forms 10-K and 10-Q (and Amendments on Form 10-K/A and 10-Q/A,
respectively) incorporated herein by reference.
<TABLE>
<CAPTION>
PREDECESSOR COMPANIES(1)
--------------------------
SIX MONTHS PERIOD FROM PERIOD FROM
ENDED YEAR ENDED FEBRUARY 24, JANUARY 1, YEAR ENDED
JUNE 30, DECEMBER 31, 1994 THROUGH 1994 THROUGH DECEMBER 31,
------------- ------------- DECEMBER 31, FEBRUARY 23, -------------
1997 1996 1996 1995 1994 1994 1993 1992
------ ------ ------ ------ ------------ ------------ ------ ------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............... $419.5 $378.8 $778.5 $596.8 $225.7 $36.6 $252.0 $262.7
Cost of sales........... 326.6 301.8 611.6 470.8 176.7 32.7 206.0 212.3
Other operating costs... 59.5 50.3 106.0 78.4 30.4 5.9 39.4 38.6
------ ------ ------ ------ ------ ----- ------ ------
Operating income
(loss)................. 33.4 26.7 60.9 47.6 18.6 (2.0) 6.6 11.8
Interest expense -
debt................... 9.1 14.1 26.9 27.0 12.9 .0 .3 .4
Interest expense -
amortization of
deferred financing
costs.................. 1.4 1.4 3.6 2.3 1.0 -- -- --
Other (income) expense.. 1.0 .0 1.2 .7 (.2) -- -- --
Provision (benefit) for
income taxes........... 9.3 4.8 12.3 7.2 2.2 (.7) 2.5 4.3
------ ------ ------ ------ ------ ----- ------ ------
Income (loss) before
extraordinary item..... 12.6 6.4 16.9 10.4 2.7 (1.3) 3.8 7.1
Extraordinary item...... -- -- -- 2.4(2) -- -- -- --
------ ------ ------ ------ ------ ----- ------ ------
Net income (loss)....... $ 12.6 $ 6.4 $ 16.9 $ 8.0 $ 2.7 $(1.3) $ 3.8 $ 7.1
====== ====== ====== ====== ====== ===== ====== ======
PER SHARE DATA(3):
Income before
extraordinary item..... $ .68 $ .36 $ .95 $ .91 $ .31
Extraordinary item...... -- -- -- .21(2) --
------ ------ ------ ------ ------
Net income.............. $ .68 $ .36 $ .95 $ .70 $ .31
====== ====== ====== ====== ======
Weighted average shares
outstanding............ 18.4 17.8 17.9 11.4 8.8
====== ====== ====== ====== ======
BALANCE SHEET DATA:
Working capital......... $ 29.1 $ 85.2 $ 22.1 $ 89.8 $ 67.3
Total assets............ 479.6 510.7 470.9 500.4 307.7
Total long term debt,
excluding current
portion................ 200.7 292.2 209.9 295.9 229.4
Total liabilities....... 344.8 401.0 349.7 398.1 283.3
Total stockholders'
equity................. 134.8 109.7 121.2 102.3 23.7
</TABLE>
- --------
(1) Per share and balance sheet data are not presented for these periods as
operations were those of predecessor companies.
(2) Extraordinary item arising from the early extinguishment of debt.
(3) In June 1997, the Common Stock was split 3-for-2 and all share and per
share information has been restated to reflect the split.
S-11
<PAGE>
MANAGEMENT
The names, ages (as of December 31, 1996), positions with the Company and
the business experience over the past five years of the executive officers and
directors of the Company are set forth below. Each director is elected for a
one year term or until his successor is elected.
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
Gerald F. Mahoney....................... 53 Chairman of the Board and Chief
Executive Officer, Director
Paul V. Reilly.......................... 44 Senior Vice President, Finance and
Chief Financial Officer
Roger Wertheimer........................ 37 Vice President, General Counsel and
Secretary
Robert J. Terry......................... 56 President and Chief Operating
Officer--U.S. Envelope Operations,
Director
Frank P. Diassi (1)..................... 64 Director
J. Bruce Duty (1)(2).................... 45 Director
Frank J. Hevrdejs(1).................... 51 Director
Jerome W. Pickholz (2)(3)............... 64 Director
W. Thomas Stephens (3).................. 54 Director
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominating Committee.
Gerald F. Mahoney has been a director, Chairman of the Board and Chief
Executive Officer of the Company since February 1994. He was Chairman of the
Board, President and Chief Executive Officer of Pavey Envelope & Tag Corp.,
from January 1991 until it became a subsidiary of the Company in February
1994. From January 1990 to the present, he has also served as President of
Saddle River Capital, an investment banking firm. Mr. Mahoney devotes
substantially all of his time to the Company in his capacity as Chairman and
CEO. From June 1987 to September 1989, Mr. Mahoney served as President of
Transkrit Corp., a business forms manufacturing company.
Paul V. Reilly has been Senior Vice President, Finance and Chief Financial
Officer of the Company since April 1997 and has been with the Company since
June 1995. Mr. Reilly spent 14 years with Polychrome Corporation, a prepress
supplier to the printing industry, where he held a number of positions
including Assistant Corporate Treasurer, Corporate Treasurer, Vice President
and Chief Financial Officer, and General Manager of United States Operations.
During 1994 and 1995, Mr. Reilly worked with Saddle River Capital, an
investment banking firm which purchased and managed small businesses, and more
recently as Vice President with a direct marketer of educational materials.
Mr. Reilly is a Certified Public Accountant.
Roger Wertheimer has been Vice President, General Counsel and Secretary of
the Company since February 1995. Mr. Wertheimer has been engaged in the
practice of law since 1984. He previously served as Corporate Counsel for PACE
Membership Warehouse, Inc., from 1988 to 1994 and practiced as a private legal
practitioner from March 1994 until February 1995, when he joined the Company.
Robert J. Terry has been a director of the Company since February 1994. Mr.
Terry is currently President and Chief Operating Officer of the Company's U.S.
Envelope Operations. He originally joined GP Envelope, the Company's
predecessor, in May 1964. Mr. Terry served as Executive Vice President of the
Mail-Well Envelope Division of Georgia-Pacific from December 1991 to February
1994, and served as Regional Vice President of Butler Paper Company, a
subsidiary of Georgia-Pacific, and as Vice President of Georgia-Pacific's
Mail-Well Envelope Division prior to that time. Mr. Terry served on the Board
of the Envelope Manufacturers Association from 1992 to 1996, and currently
serves on the Board of the Denver Better Business Bureau.
S-12
<PAGE>
Frank P. Diassi has been a director of the Company since February 1994. He
is currently managing general partner of the Unicorn Group, an investment
company. He organized the Unicorn Group in 1982 and has originated investments
in over 39 entrepreneurial companies. His primary area of interest is in
chemical and related industries. Since August 1996, Mr. Diassi has been
Chairman of Sterling Chemicals, Inc., a manufacturer of commodity
petrochemicals and chemicals primarily in the pulp and paper industry. He was
a founding director of Arcadian Corporation, the largest nitrogen fertilizer
company in North America. Mr. Diassi was director and Chairman of the Finance
Committee of Arcadian Corporation from 1989 to 1994. Mr. Diassi serves as a
member of the Compensation Committee of the Board of Directors.
J. Bruce Duty has been a director of the Company since February 1994. Since
July 1993 he has been Senior Vice President of Capital Southwest Corporation,
a venture capital investment firm. From July 1982 to June 1993, he was Vice
President of Capital Southwest Corporation. Mr. Duty serves as a member of
both the Audit and Compensation Committees of the Board of Directors.
Frank J. Hevrdejs has been a director of the Company since its inception in
November 1993. In 1982, Mr. Hevrdejs co-founded The Sterling Group, Inc., a
major management buyout company. Mr. Hevrdejs is a principal and president of
The Sterling Group, Inc. Additionally, he is Chairman of First Sterling
Ventures Corp., an investment company, Endoro Holdings, Inc., a structural and
electrical manufacturing company, and Fibreglass Holdings, Inc., a truck
accessory manufacturer. He is also a board member and a member of the
executive committee of Purina Mills, Inc., an animal feed producer, and a
board member of Eagle U.S.A., an air-freight company. Mr. Hevrdejs serves as
Chairman of the Compensation Committee of the Board of Directors.
Jerome W. Pickholz has been a director of the Company since June 1994. From
1978 to 1994, he was Chief Executive Officer of Ogilvy & Mather Direct
Worldwide, a direct advertising agency. From 1994 to June 1995, he served as
Chairman of the Board of Ogilvy & Mather Direct Worldwide. Since January 1996,
Mr. Pickholz has served as founder and Chairman of Pickholz, Tweedy, Cowan,
L.L.C., a marketing communications company. Mr. Pickholz serves as a member of
the Audit Committee and the Nominating Committee of the Board of Directors.
W. Thomas Stephens has been a director of the Company since March 1996.
Since September 1996, Mr. Stephens has been retired from Johns Manville
Corporation (formerly Schuller Corporation). From 1986 to September 1996, he
served as Chief Executive Officer and President of Johns Manville Corporation,
a building materials and forest products company. Mr. Stephens also served as
Chairman of Johns Manville Corporation from June 1990 to September 1996, and
as Executive Vice President and CFO from 1984 to 1986. Mr. Stephens serves as
director on the boards of Public Service of Colorado, a utility company, and
Stillwater Mining Company, a mining company. Mr. Stephens is a trustee of the
Eagle-Picher Trust. Mr. Stephens serves as Chairman of the Nominating
Committee of the Board of Directors.
S-13
<PAGE>
DESCRIPTION OF NOTES
GENERAL
The Notes will be issued under an indenture, to be dated as of November ,
1997, between the Company and , as trustee (the "Trustee"), as
supplemented by an indenture supplement (the "Indenture Supplement") executed
simultaneously therewith. The Indenture, together with the Indenture
Supplement, will be collectively referred to herein as the "Indenture." A form
of the Indenture is incorporated by reference in the Registration Statement of
which this Prospectus Supplement is a part. The following summaries of certain
provisions of the Indenture and Indenture Supplement do not purport to be
complete and are subject to and are qualified in their entirety by reference
to, all of the provisions of the Indenture, including the definitions therein
of certain terms. Capitalized terms used but not defined herein have the
meanings given to them in the Indenture.
The Notes are convertible at the option of the holder into Common Stock of
the Company. See "--Conversion." The Notes are unsecured, will constitute
subordinated obligations of the Company and will rank pari passu in right of
payment to the Company's other subordinated indebtedness, if any. The Notes
and the Company's obligations with respect thereto (including the Company's
obligations to repurchase Notes upon the occurrence of a Designated Event (as
defined below)) will be subordinated in right of payment to all Senior Debt
(as defined in the Indenture) of the Company as well as effectively
subordinated to all existing and future indebtedness of the Company's
subsidiaries. As of September 30, 1997, on a pro forma basis, the Company had
no Senior Debt and the Companys subsidiaries had approximately $94 million of
outstanding indebtedness and other liabilities. The Indenture does not
restrict, however, the amount of Senior Debt or other indebtedness of the
Company or any subsidiary of the Company that may be incurred in the future,
and the Company and its subsidiaries anticipate incurring Senior Debt or other
indebtedness in the future.
PRINCIPAL, MATURITY AND INTEREST
The Notes offered by this Prospectus Supplement will be limited to $150
million aggregate principal amount, plus such additional amount not in excess
of $22,500,000 as may be purchased by the Underwriters upon exercise of the
over-allotment option. See "Underwriting." The Notes will mature on November
1, 2002. The Notes will bear interest at the rate per annum set forth on the
cover page of this Prospectus from November 1, 1997 or from the most recent
interest payment date to which interest has been paid or provided for, payable
semiannually on May 1 and November 1 of each year, commencing May 1, 1998, to
the person in whose name such Note is registered at the close of business on
the April 15 or October 15 preceding such interest payment date. Interest will
be computed on the basis of a 360 day year comprised of twelve 30-day months.
The Notes will be issuable and transferable in fully registered form and
will be issued in denominations of $1,000 and integral multiples thereof.
Principal, premium, if any, and interest on the Notes may, at the option of
the Company, be paid either (i) by check mailed to the address of the person
entitled thereto as it appears in the security register or (ii) by transfer to
an account maintained by the payee entitled thereto as specified in the
security register; provided, however, that payments to The Depository Trust
Company ("DTC") will be made by wire transfer of immediately available funds
to the account of DTC or its nominee.
OPTIONAL REDEMPTION
The Notes may be redeemed at the option of the Company, in whole or in part,
at any time on or after November 1, 2000, on not less than 15, nor more than
60, days' prior notice at the redemption prices (expressed as percentages of
principal amount) set forth below, together with accrued and unpaid interest,
if any, to the date of redemption, if redeemed during the 12-month period
beginning on November 1 of the years indicated below (subject to the right of
holders of record on relevant record dates to receive interest due on an
interest payment date):
S-14
<PAGE>
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2000........................................................... %
2001........................................................... %
2002........................................................... %
</TABLE>
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed either in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, pro rata or by lot or
by any other method the Trustee deems fair and appropriate.
MANDATORY REDEMPTION
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Upon the occurrence of a Designated Event (as defined below), each holder of
Notes shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such holder's Notes
(the "Designated Event Repurchase") at a purchase price equal to 101% of the
principal amount thereof, together with accrued and unpaid interest thereon to
the Designated Event Payment Date (the "Designated Event Payment"). Within 30
days following any Designated Event, the Company shall mail a notice to each
holder stating: (1) that the Designated Event Repurchase is being made
pursuant to the covenant entitled "Designated Event" and that all Notes
tendered will be accepted for payment; (2) the purchase price and the purchase
date, which shall be no earlier than 45 days nor later than 60 days from the
date such notice is mailed (the "Designated Event Payment Date"); (3) that any
Notes not tendered will continue to accrue interest; (4) that, upon the
payment of the Designated Event Payment, all Notes accepted for payment
pursuant to the Designated Event Repurchase shall cease to accrue interest
after the Designated Event Payment Date; (5) that holders electing to have any
Notes purchased pursuant to a Designated Event Repurchase will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, to the Trustee at the address
specified in the notice prior to the close of business on the third Business
Day preceding the Designated Event Payment Date; (6) that holders will be
entitled to withdraw their election if the Trustee receives, not later than
the close of business on the second Business Day preceding the Designated
Event Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the holder, the principal amount of Notes delivered
for purchase, and a statement that such holder is withdrawing his election to
have such Notes purchased; (7) that holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must
be equal to $1,000 in principal amount or an integral multiple thereof; (8)
the last date on which holders' rights to have Notes repurchased may be
exercised; and (9) any other procedures holders must follow in order to have
their Notes repurchased.
At least one Business Day prior to the Designated Event Payment Date, the
Company shall irrevocably deposit with the Trustee or Paying Agent an amount
equal to the principal amount of Notes to be purchased. On the Designated
Event Payment Date, the Company will, to the extent lawful, (1) accept for
purchase Notes or portions thereof tendered pursuant to the Designated Event
Repurchase, (2) deposit with the Trustee the Notes so accepted and (3) deliver
or cause to be delivered to the Trustee an Officers' Certificate stating the
Notes or portions thereof tendered to the Trustee. The Trustee shall promptly
mail to each holder of Notes so accepted payment in an amount equal to the
purchase price for such Notes, and the Trustee shall promptly authenticate and
mail to each holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided, that each such new Note
shall be in a principal amount of $1,000 or an integral multiple thereof. The
Company will publicly announce the results of the Designated Event Repurchase
on or as soon as practicable after the Designated Event Payment Date. There
can be no assurance that the Company will have the financial resources
necessary to repurchase the Notes in such circumstances.
S-15
<PAGE>
The foregoing provisions would not necessarily afford holders of the Notes
protection in the event of a takeover, recapitalization, restructuring or
other transaction involving the Company that may adversely affect holders.
The right to require the Company to repurchase Notes as a result of a
Designated Event could have the effect of delaying, deferring or preventing a
Designated Event or other attempts to acquire control of the Company unless
arrangements have been made to enable the Company to repurchase all the Notes
at the Designated Event Payment Date. Consequently, this right may render more
difficult or discourage a merger, consolidation or tender offer (even if such
transaction is supported by the Company's Board of Directors or is favorable
to the stockholders), the assumption of control by a holder of a large block
of the Company's shares and the removal of incumbent management.
The terms of certain of the existing indebtedness of the Company's
subsidiaries prohibit the Company from purchasing any Notes prior to their
stated maturity, and also provide that certain change of control events with
respect to the Company would constitute a default thereunder. In addition,
such indebtedness contains restrictions on the ability of the subsidiaries to
make restricted payments (including dividends and other distributions to the
Company) which could significantly adversely affect the Company's ability to
repurchase the Notes upon the occurrence of a Designated Event. See "Risk
Factors." Any future credit agreements or other agreements relating to
indebtedness (including the permanent replacement facility currently being
negotiated by the Company or any bridge facility) to which the Company or its
subsidiaries becomes a party may contain similar restrictions on the
repurchase of Notes. Moreover, the exercise by the holders of the Notes of
their rights to require the Company to repurchase the Notes could cause a
default under such other indebtedness, even if the Designated Event itself
does not, due to the financial effect of the repurchase on the Company. In the
event a Designated Event occurs at a time when the Company is prohibited from
repurchasing Notes, the Company could seek the consent of its lenders to the
repurchase of Notes or could attempt to refinance the borrowings that contain
such prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company would remain prohibited from repurchasing Notes. In
such case, the Company's failure to repurchase tendered Notes would constitute
an Event of Default under the Indenture, which may, in turn, constitute a
further default under certain of the Company's existing debt instruments and
may constitute a default under the terms of other indebtedness that the
Company may enter into from time to time. As the payment of the Designated
Event Payment is subordinated to the prior payment of Senior Debt and
effectively subordinated to the prior payment of the indebtedness of the
Company's subsidiaries as described under "--Subordination of Notes" below, in
such circumstances, such subordination would likely prohibit payments to the
holders of Notes.
A "Designated Event" will be deemed to have occurred upon a Change of
Control (as defined below) or a Termination of Trading (as defined below).
A "Change of Control" will be deemed to have occurred when: (i) any "person"
or "group" (as such terms are used in Section 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) of shares representing more than 50% of the combined
voting power of the then outstanding securities entitled to vote generally in
elections of directors of the Company ("Voting Stock"), (ii) the Company
consolidates with or merges into any other corporation, or any other
corporation merges into the Company, and, in the case of any such transaction,
the outstanding Common Stock of the Company is reclassified into or exchanged
for any other property or security, unless the stockholders of the Company
immediately before such transaction own, directly or indirectly immediately
following such transaction, at least a majority of the combined voting power
of the outstanding voting securities of the corporation resulting from such
transaction in substantially the same proportion as their ownership of the
Voting Stock immediately before such transaction, (iii) the sale, lease,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) or (iv) any time the Continuing Directors do not constitute
a majority of the Board of Directors of the Company (or, if applicable, a
successor corporation to the Company); provided, that a Change of Control
shall not be deemed to have occurred if either (i) the last sales price of the
S-16
<PAGE>
Common Stock for any five trading days during the ten trading days immediately
preceding the Change of Control is at least equal to 110% of the Conversion
Price in effect on the date of such Change of Control or (ii) at least 90% of
the consideration (excluding cash payments for fractional shares) in the
transaction or transactions constituting the Change of Control consists of
shares of common stock that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
A "Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Notes are then convertible) is not
listed for trading on a United States national securities exchange or an
established automated over-the-counter trading market in the United States.
The Company will comply with the provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act which may then be applicable and
will file a Schedule 13E-4 or any other schedule required thereunder in
connection with any offer by the Company to repurchase Notes at the option of
holders upon a Designated Event.
The Company could, in the future, enter into certain transactions, including
certain recapitalization of the Company, that would not constitute a Change of
Control for purposes of the Designated Event repurchase feature of the Notes,
but that would increase the amount of Senior Debt (or other indebtedness)
outstanding at such time. There are no restrictions in the Indenture on the
creation of additional Senior Debt (or any other indebtedness), and under
certain circumstances the incurrence of significant amounts of additional
indebtedness could have an adverse effect on the Company's ability to service
its indebtedness, including the Notes. If a Designated Event were to occur,
there can be no assurance that the Company would have sufficient funds to pay
the Designated Event Payment for all Notes tendered by the holders thereof. A
default by the Company on its obligations to pay the Designated Event Payment
could result in acceleration of the payment of other indebtedness of the
Company at the time outstanding pursuant to cross-default provisions.
CONVERSION
The Notes, or any portion thereof which is an integral multiple of $1,000,
are convertible at any time after 60 days following the date of original
issuance thereof and prior to the close of business on November 1, 2002,
subject to prior redemption at the option of the Company or repurchase at the
option of the holder, into shares of the Company's Common Stock, at the
conversion price set forth on the cover of this Prospectus Supplement, subject
to adjustment as set forth below (the "Conversion Price"). The Company will
not be required to issue fractional shares of Common Stock but will pay a cash
adjustment in lieu thereof. In the case of any Note or portion thereof called
for redemption, conversion rights expire at the close of business on the
business day immediately preceding redemption. In the event any holder
exercises its repurchase right upon a Designated Event, such holder's
conversion right will terminate. See"--Repurchase at the Option of Holders."
Except as described below, no adjustment will be made on conversion of any
Notes for interest accrued thereon or for dividends on any Common Stock
issued.
Accrued interest will not be paid on Notes that are converted. If any Note
is converted between a record date for the payment of interest and the next
succeeding interest payment date, the interest payable on such interest
payment date shall be paid to the holder of such Note on such record date;
however, such Note upon surrender must be accompanied by funds equal to the
interest payable on such interest payment date on the principal amount so
converted (unless such Note shall have been called for redemption, in which
case no such payment shall be required).
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The Conversion Price is subject to adjustment in certain events, including
(i) the subdivision, combination or reclassification of the outstanding Common
Stock of the Company; (ii) the issuance by the Company of Common Stock as a
dividend or distribution on the Common Stock; (iii) the issuance of rights and
warrants (expiring within 45 days after the record date for the determination
of stockholders entitled to receive such rights and warrants) to all holders
of Common Stock entitling them to purchase shares of Common Stock or
securities convertible into or exchangeable for Common Stock at a price per
share (or having a conversion or exercise price per share) less than the then
current market price (as defined in the Indenture) of the Common Stock (iv)
the distribution of shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness or other assets (excluding dividends in
cash, except as described in clause (v) below) to all holders of Common Stock;
(v) the distribution, by dividend or otherwise, of cash to all holders of
Common Stock in an aggregate amount that, together with the aggregate of any
other distributions of cash that did not trigger a Conversion Price adjustment
to all holders of its Common Stock within the 12 months preceding the date
fixed for determining the stockholders entitled to such distribution and all
Excess Payments in respect of each tender offer or other negotiated
transaction by the Company or any of its Subsidiaries for Common Stock
concluded within the preceding 12 months not triggering a Conversion Price
adjustment, exceeds 5% of the product of the current market price per share
(determined as set forth below) on the date fixed for the determination of
stockholders entitled to receive such distribution times the number of shares
of Common Stock outstanding on such date; (vi) payment of an Excess Payment in
respect of a tender offer or other negotiated transaction by the Company or
any of its Subsidiaries for Common Stock, if the aggregate amount of such
Excess Payment, together with the aggregate amount of cash distributions made
within the preceding 12 months not triggering a Conversion Price adjustment
and all Excess Payments in respect of each tender offer or other negotiated
transaction by the Company or any of its Subsidiaries for Common Stock
concluded within the preceding 12 months not triggering a Conversion Price
adjustment, exceeds 5% of the product of the current market price per share
(determined as set forth below) on the expiration of such tender offer times
the number of shares of Common Stock outstanding on such date; (vii) the
distribution to all holders of Common Stock of rights or warrants to subscribe
for securities (other than those securities referred to in clause (iii)
above); and (viii) the issuance of Common Stock or securities convertible
into, or exchangeable for, Common Stock at a price per share (or having a
conversion or exchange price per share) that is less than the current market
price of the Common Stock (but excluding, among other things, issuances: (a)
pursuant to any bona fide plan for the benefit of employees, directors or
consultants of the Company now or hereafter in effect; (b) to acquire all or
any portion of a business in an arm's-length transaction between the Company
and an unaffiliated third party including, if applicable, issuances upon
exercise of options or warrants assumed in connection with such an
acquisition; (c) in a bona fide public offering pursuant to a firm commitment
underwriting or sales at the market pursuant to a continuous offering stock
program; (d) pursuant to the exercise of warrants, rights (including, without
limitation, earnout rights) or options, or upon the conversion of convertible
securities, which are issued and outstanding on the date hereof, or which may
be issued in the future for fair value and with an exercise price or
conversion price at least equal to the current market price of the Common
Stock at the time of such issuance). In the event of a distribution to
substantially all holders of Common Stock of rights or warrants to subscribe
for securities (other than those securities referred to in clause (iii)
above), the Company may, instead of making any adjustment in the Conversion
Price, make proper provision so that each holder of a Convertible Note who
converts such Convertible Note after the record date for such distribution and
prior to the expiration or redemption of such rights shall be entitled to
receive upon such conversion, in addition to shares of Common Stock, an
appropriate number of such rights. The Company is not required to make any
adjustment in the Conversion Price of less than 1%, but instead such
adjustment will be carried forward and taken into account in the computation
of any subsequent adjustment.
In the Indenture, the "current market price" per share of Common Stock on
any date shall be deemed to be the average of the Daily Market Prices for the
shorter of (i) 30 consecutive business days ending on the last full trading
day on the exchange or market referred to in determining such Daily Market
Prices prior to the time of determination (as defined in the Indenture) or
(ii) the period commencing on the date next succeeding the first public
announcement of the issuance of such rights or warrants or such distribution
through such last full trading day prior to the time of determination.
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"Excess Payment" means the excess of (A) the aggregate of the cash and fair
market value of other consideration paid by the Company or any of its
Subsidiaries with respect to the shares acquired in the tender offer or other
negotiated transaction over (B) the market value of such acquired shares after
giving effect to the completion of the tender offer or other negotiated
transaction.
In case of any merger or consolidation of the Company or the sale or
conveyance by the Company of all or substantially all the assets of the
Company, the holder of each outstanding Note shall have the right to convert
such Note into the kind and amount of shares of stock and other securities and
property (including cash) received in such transaction by a holder of the
number of shares of Common Stock into which such Note was convertible
immediately prior to the effective date of such transaction. The meaning of
the phrase "sale or conveyance by the Company of all or substantially all of
the assets of the Company" will be determined under New York law, which
governs the Indenture. Application of the phrase to a particular sale of
assets will depend on the interpretation given to the phrase by courts
construing New York law at the time, and by the specific facts and
circumstances of such sale. Although there is a developing body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the applicability
of the foregoing provision as a result of a lease, transfer or conveyance of
less than all of the assets of the Company to another person or group may be
uncertain.
The Company may from time to time reduce the Conversion Price by any amount
for any period of at least 20 days, in which case the Company shall give at
least 15 days' notice of such reduction, if the Board of Directors of the
Company has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. In
addition, and without limiting the foregoing, the Board of Directors may also
make such reductions in the Conversion Price as it deems advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "Certain United States Tax
Considerations."
Certain adjustments (or the failure to make certain adjustments in certain
cases) in the Conversion Price in accordance with the foregoing provisions
(other than to take account of a dividend of the Company's own stock or a
stock split) could be taxable pursuant to Section 305 of the Internal Revenue
Code of 1986, as amended, as a constructive distribution to holders of the
Notes at the time of such adjustments in the Conversion Price.
SUBORDINATION OF NOTES
The payment of the principal of, interest on or any other amounts due on the
Notes will be subordinate in right of payment to all existing and future
Senior Debt. The Indenture does not restrict the amount of Senior Debt or
other indebtedness that may be incurred in the future by the Company or any
subsidiary of the Company. In addition, the Notes will be effectively
subordinated to claims of holders of any preferred stock and claims of
creditors (other than the Company) of the Company's subsidiaries, including
trade creditors, secured creditors, taxing authorities, creditors holding
guarantees, and tort claimants. In the event of a liquidation, reorganization,
or similar proceeding relating to a subsidiary, these persons generally would
have priority as to the assets of such subsidiary over the claims and equity
interest of the Company and, thereby indirectly, holders of the Company's
indebtedness, including the Notes. As of September 30, 1997 and on a pro forma
basis giving effect to the Offering and the Common Stock Offering, the Company
had no outstanding Senior Indebtedness and the Company's subsidiaries had
outstanding indebtedness and other liabilities of approximately $94 million.
The only asset of the Company is the capital stock of M-W Corporation.
Because all of the operations of the Company are conducted through its
subsidiaries, the Company's cash flow and consequently its ability to service
debt, including the payment of principal and interest on the Notes, is
dependent upon the cash flow of its subsidiaries and the transfer of funds by
its subsidiaries to the Company in the form of loans, dividends or otherwise.
The subsidiaries are distinct legal entities and have no obligation to pay any
amounts due pursuant to the various obligations or Indebtedness of the Company
or to make any funds available therefor, whether in the form of loans,
dividends or otherwise. In addition, both the terms of the current Credit
Facilities as well as the indenture governing the Subordinated Notes contain
provisions which significantly limit and in certain
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circumstances prohibit the payment of dividends or advances to the Company. Any
bridge facility or permanent replacement credit facility may contain similar
limitations. Finally, violation by the subsidiaries of any of the restrictive
covenants contained in the Credit Facilities or in the indenture governing the
Subsidiary Notes could cause an event of default under the respective
facilities, effectively prohibiting dividends or advances to the Company. See
"Risk Factors".
No payment on account of principal of, redemption of, interest on or any
other amounts due on the Notes, including, without limitation, any payments
with respect to a Designated Event, and no redemption, purchase or other
acquisition of the Notes may be made unless (i) full payment of amounts then
due on all Senior Debt have been made or duly provided for pursuant to the
terms of the instrument governing such Senior Debt, and (ii) at the time for,
or immediately after giving effect to, any such payment, redemption, purchase
or other acquisition, there shall not exist under any Senior Debt or any
agreement pursuant to which any Senior Debt has been issued, any default which
shall not have been cured or waived and which shall have resulted in the full
amount of such Senior Debt being declared due and payable.
Upon any distribution of its assets in connection with any dissolution,
winding-up, liquidation or reorganization of the Company or acceleration of the
principal amount due on the Notes because of an Event of Default, all Senior
Debt must be paid in full before the holders of the Notes are entitled to any
payments whatsoever.
If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify the holders of Senior Debt or the trustee(s) for
such Senior Debt of the acceleration. The Company may not pay the Notes until
five days after such holders or trustee(s) of Senior Debt receive notice of
such acceleration and, thereafter, may pay the Notes only if the subordination
provisions of the Indenture otherwise permit payment at that time.
As a result of these subordination provisions, in the event of the Company's
insolvency, holders of the Notes may recover ratably less than general
creditors of the Company.
MODIFICATION AND WAIVER
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Notes, the
Company and the Trustee may also execute a supplemental indenture to add
provisions to, or change in any manner or eliminate any provisions of, the
Indenture with respect to such Notes or modify in any manner the rights of the
holders of the Notes and any related coupons under such Indenture; provided
that no such supplemental indenture will, without the consent of the holder of
each such outstanding Note (i) change the stated maturity of the principal of,
or any installment of principal or interest on, the Notes or any premium
payable upon redemption thereof, (ii) reduce the principal amount of, or the
rate of interest on, the Notes; (iii) change the place or currency of payment
of principal or interest, if any, on the Notes; (iv) impair the right to
institute suit for the enforcement of any payment on or with respect to the
Notes; (v) reduce the above-stated percentage of holders of the Notes to modify
or amend such Indenture; (vi) modify the foregoing requirements or reduce the
percentage in principal amount of outstanding Notes necessary to waive any
covenant or past default; (vii) amend or modify any of the provisions of such
Indenture relating to subordination of the Notes in any manner adverse to the
holders of such Notes; (viii) adversely affect the right of any holder to
convert any Note as provided in the Indenture and (ix) modify the provisions in
the Indenture relating to the Company's requirement to repurchase Notes upon a
Designated Event in a manner adverse to the holders. Holders of not less than a
majority in principal amount of the outstanding Notes of any series may waive
certain past Defaults and may waive compliance by the Company with certain of
the restrictive covenants described above with respect to the Notes.
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the Notes will be issued in fully registered
form, without coupons. The Notes will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York ("DTC"), and registered in the
name of Cede & Co., as DTC's nominee in the form of a global Note certificate
(the "Global Certificate" ) or will remain in the custody of the Trustee
pursuant to a FAST Balance Certificate Agreement between DTC and the Trustee.
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GLOBAL CERTIFICATES
Upon the issuance of the Global Certificate, DTC or its custodian will
credit, on its internal system, the respective principal amount of Notes of the
individual beneficial interests represented by such Global Certificate to the
respective accounts of persons who have accounts with such depositary. Such
accounts initially will be designated by or on behalf of the Underwriters.
Ownership of beneficial interests in the Global Certificate will be limited to
persons who have accounts with DTC ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a Global
Certificate will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC or its nominee (with respect
to interests of participants) and the records of participants (with respect to
interests of persons other than participants).
Conveyance of notices and other communications by DTC to Direct Participants
(as defined herein), by Direct Participants to Indirect Participants (as
defined herein), and by Direct Participants and Indirect Participants to
beneficial owners, will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Purchases of Notes under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Notes on DTC's records. The
ownership interest of each actual purchaser of each Note ("Beneficial Owner")
will in turn be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Direct and Indirect Participant through which the Beneficial
Owners entered the transaction. Transfers of ownership interests in the Notes
are to be accomplished by entries made on the books of participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Notes, except in the event that
use of the book entry system for the Notes is discontinued.
So long as DTC, or its nominee, is the registered owner or holder of the
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by such Global Certificate
for all purposes under the Indenture and the Notes. No beneficial owner of an
interest in the Global Certificate will be able to transfer the interest except
in accordance with DTC's applicable procedures, in addition to those provided
for under the Indenture.
Payments of the principal of, and interest on, the Global Certificate will be
made to DTC or its nominee, as the case may be, as the registered owners
thereof. Neither the Company, the Trustee nor any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Certificate of for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests, subject to any statutory or regulatory
requirements as may be in effect from time to time.
The Company expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of the Global Certificate, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global
Certificate as shown on the records of DTC or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in such
Global Certificate held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way in
accordance with DTC rules. If a holder requires physical delivery of a
certificated note for any reason, including to sell Notes to persons in
jurisdictions which require such delivery of such Notes or to pledge such
Notes, such holder must transfer its interest in the Global Certificate in
accordance with the normal procedures of DTC and the procedures set forth in
the Indenture. Once an interest in the Global Certificate is delivered as a
certificated Note, such certificated Note may be exchanged for an interest in
the Global Certificate.
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The Company expects that DTC will take any action permitted to be taken by a
holder of Notes (including the presentation of Notes for exchange as described
below) only at the direction of one or more participants to whose account the
DTC interests in a Global Certificate is credited and only in respect of such
portion of the aggregate principal amount of the Notes as to which such
participant or participants has or have given direction. However, if there is
an Event of Default (as defined) under the Notes, DTC may exchange the Global
Certificate for certificated Notes, which it will distribute to its
participants.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in accounts of its participants, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
banks, securities brokers and dealers and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants").
Although the Company expects that DTC will agree to the foregoing procedures
in order to facilitate transfers of interests in the Global Certificate among
participants of DTC, DTC is under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither the Company nor the Trustee will have any responsibility for the
performance by DTC or its Direct or Indirect Participants of their respective
obligations under the rules and procedures governing their operations.
If DTC is at any time unwilling or unable to continue as a depositary for a
Global Certificate and a successor depositary is not appointed by the Company
within 90 days, the Company will issue certificated Notes in exchange for the
Global Certificate. The Company also may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor securities
depository). In that event, the Company will issue certificated Notes in
exchange for the Global Certificate.
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, but
the Company takes no responsibility for the accuracy thereof.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to exchange or register the transfer of
any Note selected for redemption. Also, the Company is not required to
exchange or register the transfer of any Note for a period of 15 days before a
selection of Notes to be redeemed. The registered holder of a Note will be
treated as the owner of it for all purposes.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that the Company will not consolidate with or merge
into any other Person or sell, convey, transfer or lease all or substantially
all of its properties and assets to any Person, or permit any Person to
consolidate with or merge into the Company or sell, convey, transfer or lease
all or substantially all of its properties and assets to the Company, unless
(a) the Company shall be the continuing Person or the Person
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formed by such consolidation or into which the Company is merged or the Person
or corporation that acquires all or substantially all of its properties and
assets is a corporation, partnership or trust organized and validly existing
under the laws of the United States or any stated thereof or the District of
Columbia and expressly assumes payment of the principal of and premium, if
any, and interest on the Notes and performance and observance of each
obligation of the Company under the Indenture and the Notes, (b) immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company as a result of such transaction as having
been incurred by the Company at the time of such transaction, no Default or
Event of Default exists, (c) such sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the Company's
properties or assets shall be as an entirety or virtually as an entirety to
one Person and such Person shall have assumed all the Obligations of the
Company under the Notes and the Indenture, pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, and (d) the
Company has delivered to the Trustee an Officer's Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, conveyance, transfer
or lease complies with the provisions of the Indenture.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to the
Notes (even if the event is the failure to do an act which is prohibited by
the subordination provisions of the Indenture): (a) failure to pay interest
upon any Note when it becomes due and payable, and continuance of such default
for a period of 30 days; (b) failure to pay the principal of (or premium, if
any, on) any Note at its maturity; (c) failure to pay the Redemption Price or
the Designated Event Payment when and as due; (d) failure to perform, or
breach of, any covenant or agreement of the Company in the Indenture continued
for 60 days after written notice as provided in the Indenture; (e) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date on which the
Notes are first authenticated and issued, which default (i) is caused by a
failure to pay principal or interest due on such Indebtedness within the grace
period for payment provided in such Indebtedness (which failure continues
beyond any applicable grace period) (a "Payment Default") or (ii) results in
the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10 million or more; (f) one or more judgments or decrees shall be entered
against the Company or any Subsidiary involving a liability of more than $10
million in the aggregate and such judgments or decrees shall not have been
vacated, discharged, satisfied or stayed pending appeal within 60 days from
the date of entry thereof; and (g) certain events of bankruptcy, insolvency or
reorganization of the Company or any Material Subsidiary.
If an Event of Default with respect to the Notes shall occur and be
continuing, the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may declare the principal of
all Notes to be due and payable. The Company is required to furnish to the
Trustee quarterly statements as to any default in the performance by the
Company of its obligations under the Indenture. Under certain circumstances,
any declaration of acceleration with respect to the Notes may be rescinded and
past defaults may be waived by the holders of a majority of the aggregate
principal amount of the outstanding Notes. The Indenture provides that the
Trustee shall give notice to the holders of the Notes of any default known to
it as provided in the Trust Indenture Act of 1939.
No holder of any Note will have any right individually to pursue any remedy
under the Indenture unless (i) the holder previously has given to the Trustee
written notice of a continuing Event of Default, (ii) holders of not less than
25% of the aggregate principal amount of the outstanding Notes have made
written request to the Trustee to institute a proceeding, (iii) such holder
has offered reasonable indemnity to the Trustee, (iv) the Trustee has not
received from the holders of a majority in aggregate principal amount of the
outstanding Notes a
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direction inconsistent with the request and (v) the Trustee has failed to
institute such proceeding within 60 days. However, these limitations do not
apply to a suit instituted by a holder of a Note for the enforcement of
payment of the principal of an premium, it any, or interest on such Note on or
after the respective due dates expressed in such Note or of the right to
convert the Note in accordance with the Indenture.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of equity interests in any entity,
including, without limitation, corporate stock and partnership interests.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the date of
preparation of a financial statement or the date that a particular action is
taken or event occurs, as applicable.
"Indebtedness" means, with respect to any person, all obligations, whether
or not contingent, of such person (i) (a) for borrowed money (including, but
not limited to, any indebtedness secured by a security interest, mortgage or
other lien on the assets of such person which is (1) given to secure all or
part of the purchase price of property subject thereto, whether given to the
vendor of such property or to another, or (2) existing on property at the time
of acquisition thereof), (b) evidenced by a note, debenture, bond or other
written instrument, (c) under a lease required to be capitalized on the
balance sheet of the lessee under GAAP or under any lease or related document
(including a purchase agreement) which provides that such person is
contractually obligated to purchase or to cause a third party to purchase such
leased property, (d) in respect of letters of credit, bank guarantees or
bankers' acceptances, (e) with respect to Indebtedness secured by a mortgage,
pledge, lien, encumbrance, charge or adverse claim affecting title or
resulting in an encumbrance to which the property or assets of such person are
subject, whether or not the obligation secured thereby shall have been assumed
or guaranteed by or shall otherwise be such person's legal liability, (f) in
respect of the balance of deferred and unpaid purchase price of any property
or assets, (g) under interest rate or currency swap agreements, cap, floor and
collar agreements, spot and forward contracts and similar agreements and
arrangements; (ii) with respect to any obligation of others of the type
described in the preceding clause (i) or under clause (iii) below assumed by
or guaranteed in any manner by such person or in effect guaranteed by such
person through an agreement to purchase, contingent or otherwise (and the
obligations of such person under any such assumptions, guarantees or other
such arrangements); and (iii) any and all deferrals, renewals, extensions,
refinancings and refundings of, or amendments, modifications or supplements
to, any of the foregoing.
"Material Subsidiary" means any Subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act (as such Regulation is in effect on
the date hereof).
"Senior Debt" means the principal of, interest on and other amounts due on
Indebtedness of the Company, whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed or guaranteed by the Company, unless,
in the instrument creating or evidencing or pursuant to which Indebtedness is
outstanding, it is expressly provided that such Indebtedness is not senior in
right of payment to the Notes. Senior Debt includes, with respect to the
obligations described above, interest accruing, pursuant to the terms of such
Senior Debt, on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not post-filing interest is
allowed in such proceeding, at the rate specified in the instrument governing
the relevant
S-24
<PAGE>
obligation. Notwithstanding anything to the contrary in the foregoing, Senior
Debt shall not include: (a) Indebtedness of or amounts owed by the Company for
compensation to employees, or for goods, services or materials purchased in the
ordinary course of business; (b) Indebtedness of the Company to a Subsidiary of
the Company; or (c) any liability for Federal, state, local or other taxes owed
or owing by the Company.
"Subsidiary" means any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any person or one or more of the other
Subsidiaries of that person or a combination thereof.
GOVERNING LAW
The Indenture and Notes will be governed and construed in accordance with the
laws of the State of New York without giving effect to such state's conflicts
of laws principles.
S-25
<PAGE>
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain material United States
federal income tax consequences of the purchase, ownership and disposition of
the Notes (and of Common Stock acquired upon a conversion of the Notes) to the
initial holders thereof. This discussion is based on provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
promulgated thereunder, and administrative and judicial interpretations
thereof now in effect, all of which are subject to change, possibly with
retroactive effect. This discussion addresses the tax consequences to the
initial holders of Notes and does not address the tax consequences to
subsequent holders of Notes. Furthermore, this discussion is limited to
holders who hold the Notes as capital assets. This discussion is for general
information only, and does not address all of the tax consequences that may be
relevant to particular holders in light of their personal circumstances, or to
certain types of holders (such as certain financial institutions, insurance
companies, tax exempt entities, dealers in securities, Non-U.S. Holders or
persons who have hedged the interest rate).
As used herein, the term "United States Holder" or "U.S. Holder" means a
holder of a Note, or of Common Stock acquired upon conversion of a Notes, that
is for United States federal income tax purposes (i) a citizen or resident of
the United States, (ii) a corporation or partnership created or organized in
or under the laws of the United States or of any State, (iii) an estate the
income of which is subject to United States federal income taxation regardless
of source, or (iv) a trust which is subject to the supervision of a court
within the United States and the control of a U.S. Person. As used herein
"Non-U.S. Holder" means any beneficial owner who is not a U.S. Holder.
Prospective Purchasers are urged to consult their own tax advisors as to the
particular tax consequences to them of the acquisition, ownership and
disposition of the Notes or Common Stock, including the applicability of any
federal estate or gift tax laws or any state, local or foreign tax laws,
changes in applicable tax laws and any pending or proposed legislation.
TAX TREATMENT OF INTEREST PAYMENTS
Interest payments on the Notes will be includable in a United States
Holder's taxable income as received or accrued in accordance with the holder's
method of tax accounting.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Upon the sale, exchange, redemption, retirement at maturity or other
disposition of a Note, a United States Holder generally will recognize capital
gain or loss equal to the difference between the amount of cash plus the fair
market value of all property received on such disposition (except to the
extent such cash or property is attributable to accrued interest, which is
taxable as ordinary income) and such holder's adjusted tax basis in the Note.
For United States Holders other than individuals, such gain or loss will be
long-term capital gain or loss if, at the time of such disposition, the United
States Holder's holding period in the Note is more than one year. Certain
changes to the Code, enacted recently as part of the Taxpayer Relief Act of
1997, will apply to United States Holders who are individuals. In general, the
maximum tax rate for such holders on long-term capital gains will be 20% for
most capital assets (including the Notes) held for more than 18 months. For
individual holders holding Notes for more than one year but not more than 18
months, the maximum tax rate on capital gains will be 28%. Capital gain or
loss will be short-term if the Note is held for one year or less.
ADJUSTMENTS TO CONVERSION RATE
The Conversion Price of the Notes is subject to adjustment under certain
circumstances. See "Description of Notes--Conversion of Notes." Section 305 of
the Code may treat a United States Holder of Notes as receiving a constructive
distribution, taxable as dividend to the extent of the Company's current or
accumulated earnings and profits, in the case of certain adjustments in the
Conversion Price of the Notes that may occur in limited circumstances
(particularly an adjustment to reflect a taxable dividend to holders of the
Common Stock).
S-26
<PAGE>
CONVERSION OF NOTES INTO COMMON STOCK
Generally, no gain or loss will be recognized for federal income tax
purposes at the time of the conversion of the Notes into shares of Common
Stock. However, cash paid in lieu of a fractional share of Common Stock will
result in capital gain (or loss) to the extent of the difference between the
amount of such cash and the portion of the adjusted basis of the Note
allocable to such fractional share. 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 such adjusted basis allocated to any
fractional share of Common Stock deemed exchanged for cash. The holding period
of the Common Stock received on conversion will include the period during
which the converted Notes were held.
SALE OR EXCHANGE OF COMMON STOCK
A United States Holder of Common Stock into which the Notes have been
converted generally will recognize capital gain or loss upon the sale,
exchange, redemption, or other disposition of the Common Stock measured by the
difference between the amount realized on such disposition and the United
States Holder's adjusted tax basis in the Common Stock. Such gain or loss will
be long-term capital gain or loss if the holding period of the Common Stock
(determined as described above under "Conversion of Notes into Common Stock")
is more than one year at the time of the sale or exchange. Special rules may
apply to certain redemptions of Common Stock which may result in different
treatment.
BACK-UP WITHHOLDING
A United States Holder of Notes or Common Stock may be subject to "back-up
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 and payments of the proceeds of
the sale of Notes or Common Stock. These back-up withholding rules apply if
the United States 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 back-up
withholding. A United States 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 United States Holder under the back-up
withholding rules is creditable against the United States Holder's federal
income tax liability, provided the required information is furnished to the
IRS. Back-up withholding does not apply, however, with respect to payments
made to certain holders, including corporations, tax-exempt organizations and
certain foreign persons, provided their exemption from back-up withholding is
properly established. The Company will report to the 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.
S-27
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Common Stock in the public market may have
an adverse effect on the market price of the Common Stock. Of the 18,834,732
shares outstanding at September 30, 1997, 12,651,335 shares are freely
tradeable. All of the shares of Common Stock issued upon conversion of the
Notes offered hereby will also be freely transferable. In addition, and as of
September 30, 1997, 6,183,397 shares are otherwise available for resale into
the public market pursuant to Rule 144 under the Securities Act.
The Company, its directors and executive officers, and the Company's
principal shareholders who hold an aggregate of 4,324,648 shares of Common
Stock have entered into lock-up agreements with the representatives of the
Underwriters pursuant to which they have agreed that they will not, directly
or indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose) or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock,
without the prior written consent of Prudential Securities Incorporated on
behalf of the Underwriters, for a period of 90 days after the date of this
Prospectus Supplement, except for shares offered pursuant to this offering and
issuances pursuant to the exercise of options granted under employee benefit
plans existing as of the date of this Prospectus Supplement or pursuant to the
terms of convertible securities or warrants of the Company outstanding as of
the date of this Prospectus Supplement. Prudential Securities Incorporated
may, in its sole discretion at any time and without notice, release all or any
portion of the shares subject to such lock-up agreements. All remaining
3,629,448 shares (assuming the sale of 695,200 shares by the selling
Shareholders in the Common Stock Offering) will become available for sale 90
days after the date of this Prospectus Supplement upon expiration of these
lock-up agreements, subject to compliance with Rule 144 or Rule 701
promulgated under the Securities Act.
S-28
<PAGE>
UNDERWRITING
The Underwriters named below (the "Underwriters"), for whom Prudential
Securities Incorporated, Bear Stearns & Co. Inc., Donaldson, Lufkin & Jenrette
Securities Corporation and Hanifen, Imhoff Inc. are acting as representatives
(collectively, the "Representatives"), have severally agreed, subject to the
terms and conditions contained in the underwriting agreement (the
"Underwriting Agreement"), to purchase from the Company the aggregate
principal amount of Notes set forth below opposite their respective names:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Prudential Securities Incorporated............................. $
Bear, Stearns & Co. Inc. ......................................
Donaldson, Lufkin & Jenrette Securities Corporation............
Hanifen, Imhoff Inc. ..........................................
------------
Total...................................................... $150,000,000
============
</TABLE>
The Company is obligated to sell, and the Underwriters are obligated to
purchase, all of the Notes offered hereby, if any are purchased.
The Underwriters, through their Representatives, have advised the Company
that they propose to offer the Notes initially at the public offering price
set forth on the cover page of this Prospectus Supplement; that the
Underwriters may allow to selected dealers a concession of % of the
principal amount of the Notes; and that such dealers may re-allow a concession
of % of the principal amount of the Notes to certain other dealers. After
the public offering, the offering price and the concessions may be changed by
the Representatives.
The Company has granted the Underwriters an option, exercisable for 30 days
from the date of this Prospectus Supplement, to purchase up to an additional
$22,500,000 in aggregate principal amount of Notes at the public offering
price, less underwriting discounts and commissions, as set forth on the cover
page of this Prospectus Supplement. The Underwriters may exercise such option
solely for the purpose of covering over-allotments incurred in the sale of the
Notes offered hereby. To the extent such option to purchase is exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional Notes as the number set
forth next to such Underwriter's name in the preceding table bears to
$150,000,000.
The Company has agreed to indemnify the several Underwriters and contribute
to any losses arising out of certain liabilities, including liabilities under
the Securities Act.
The Company, its executive officers and directors, holding an aggregate of
approximately 4,324,648 shares of Common Stock have agreed that they will not,
directly or indirectly, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose) or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock, without the prior written consent of Prudential Securities
Incorporated on behalf of the Underwriters, for a period of 90 days after the
date of this Prospectus Supplement, except for shares offered pursuant to this
offering and issuances pursuant to the exercise of options granted under
employee benefit plans existing as of the date of this Prospectus Supplement
or pursuant to the terms of convertible securities or warrants of the Company
outstanding as of the date of this Prospectus Supplement. Prudential
Securities Incorporated may, in its sole discretion, at any time and without
notice, release all or any portion of the shares subject to such lockup
agreements.
In connection with the Offering, certain Underwriters (and selling group
members if any) and their respective affiliates may engage in transactions
that stabilize, maintain or otherwise affect the market price of the Notes and
the Common Stock. Such transactions may include stabilization transactions
effected in accordance
S-29
<PAGE>
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Notes or Common Stock for the purpose of stabilizing its market
price. The Underwriters also may create a short position for the account of
the Underwriters by selling more Notes in connection with the Offering than
they are committed to purchase from the Company, and in such case may purchase
Notes and Common Stock in the open market following completion of the Offering
to cover all or a portion of such short position. The Underwriters may also
cover all or a portion of such short position, with up to $22,500,000
additional aggregate principal amount of Notes, by exercising the
Underwriters' overallotment option referred to above. In addition, Prudential
Securities Incorporated, on behalf of the Underwriters, may impose "penalty
bids" under contractual arrangements with the Underwriters whereby it may
reclaim from an Underwriter (or any selling group member participating in the
Offering) for the account of the other Underwriters, the selling concession
with respect to Notes that is distributed in the Offering but subsequently
purchased for the account of the Underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the Notes and Common Stock at levels above that which might otherwise
prevail in the open market. None of the transactions described in this
paragraph are required and, if they are undertaken, then they may be
discontinued at any time.
LEGAL MATTERS
The legality of the Notes being offered hereby and the Common Stock of the
Company to be issued upon the conversion of the Notes has been passed upon for
the Company by Rothgerber, Appel, Powers & Johnson LLP, Denver, Colorado.
Certain legal matters will be passed upon for the Underwriters by Andrews &
Kurth L.L.P., Houston, Texas.
S-30
<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 NOVEMBER 10, 1997
PROSPECTUS
- --------------------------------------------------------------------------------
$300,000,000
MAIL-WELL, INC.
DEBT SECURITIES
PREFERRED STOCK
[LOGO OF MAIL-WELL,INC. DEPOSITORY SHARES
APPEARS HERE] COMMON STOCK
WARRANTS
- --------------------------------------------------------------------------------
Mail-Well, Inc., a Colorado corporation (the "Company" or "Mail-Well"), may
offer from time to time, in one or more series (i) debt securities (the "Debt
Securities"), which may be senior subordinated debt securities ("Senior
Subordinated Debt Securities") or subordinated debt securities ("Subordinated
Debt Securities"), in each case consisting of debentures, notes and/or other
unsecured evidences of indebtedness, (ii) shares of Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), (iii) Preferred Stock represented by
depository shares ("Depository Shares"), (iv) shares of its common stock, par
value $0.01 per share (the "Common Stock") and (v) warrants to purchase Debt
Securities, Preferred Stock or shares of Common Stock (the "Warrants"), as
shall be designated by the Company at the time or times of the offering. The
Debt Securities, the Preferred Stock, the Common Stock, the Warrants and any
shares of Common Stock issuable upon conversion or exchange of the Debt
Securities or Preferred Stock or exercise of the Warrants are collectively
referred to as the "Securities" and will have an aggregate public offering
price of up to $300,000,000 or the equivalent thereof in U.S. dollars if any
Securities are denominated in a currency other than U.S. dollars or in currency
units. The Securities may be offered separately or together (in any
combination) and as a separate series, in any case in amounts, at prices and on
terms to be determined at the time of sale.
The form in which the Securities are to be issued will be set forth in a
Prospectus Supplement (including any related term sheet) relating to such
Securities (the "Prospectus Supplement"), together with the offering terms of
such Securities, and will include where applicable, their specific designation,
aggregate principal amount or aggregate public offering price, maturity, if
any, rate and times of payment of interest or dividends, if any, redemption,
conversion, exchange and sinking fund terms, if any, exercise price and
detachability, if any, and other specific terms. If so specified in the
applicable Prospectus Supplement, Debt Securities of a series may be issued in
whole or in part in the form of one or more temporary or permanent global
securities. The Prospectus Supplement will also contain information, as
applicable, about certain material United States federal income tax
considerations relating to the particular securities offered thereby. The
Prospectus Supplement will also contain information, where applicable, as to
any listing on a national securities exchange of the securities covered by such
Prospectus Supplement.
The Securities may be offered directly through agents designated from time to
time by the Company or to or through underwriters or dealers. The names of such
agents, dealers or underwriters and any applicable purchase price, fee,
underwriting discounts and commissions and the net proceeds from such sale will
be set forth, or will be calculable from the information set forth, in the
applicable Prospectus Supplement. See "Plan of Distribution." No Securities may
be sold without delivery of the applicable Prospectus Supplement describing the
method and terms of offering of such Securities.
SEE "RISK FACTORS" ON PAGES 4 TO 8 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN CONNECTION WITH AN INVESTMENT
IN THE SECURITIES.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
This Prospectus is dated November , 1997
<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 Judiciary Plaza, 450
Fifth Street, N.W. Washington, D.C. 20549; 7 World Trade Center, 13th Floor,
New York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W. Washington, D.C. 20549. Such reports and other information
concerning the Company may also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005. The Commission also
maintains a site on the World Wide Web at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto. Such
additional information is available for inspection and copying at the offices
of the Commission. Statements contained in this Prospectus, in any Prospectus
Supplement or in any document incorporated by reference herein or therein as
to the contents of any contract or other document referred to herein or
therein are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to, or
incorporated by reference in, the Registration Statement, each such statement
being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, all of which were previously filed by the Company
(File No. 0-26692) with the Commission pursuant to the Exchange Act, are
hereby incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K, and the Amendment on Form
10-K/A filed on October 28, 1997, for the year ended December 31, 1996;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997, and the Amendments on Form 10-Q/A filed
on September 12, 1997 and October 28, 1997 for the quarter ended June 30,
1997;
(3) the Company's Current Report on Form 8-K, dated May 20, 1997.
All reports and documents filed by the Company subsequent to the date of
this Prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act and prior to the termination of the offering of the Securities covered by
this Prospectus shall be deemed to be incorporated by reference and to be a
part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated by reference or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that such
statement is modified or replaced by a statement contained in this Prospectus
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference into this Prospectus. Any such statement so modified
or superseded shall not be deemed, except as so modified or replaced, to
constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request
of any such person to the Company, a copy of any or all of the documents
referred to above that have been or may be incorporated into this Prospectus
by reference, including exhibits to such documents (unless such exhibits are
specifically incorporated by reference to such documents). Requests for such
copies should be directed to Investor Relations, Mail-Well, Inc., 23 Inverness
Way East, Englewood, Colorado 80112, telephone number (303) 790-8023.
2
<PAGE>
THE COMPANY
Mail-Well, Inc. (the "Company") is the largest printer and manufacturer of
envelopes in the United States and Canada, competing primarily in the higher-
margin consumer direct market segment of the envelope industry in which
envelopes are designed and manufactured to customer specifications. In
addition, the Company is the leading high-impact color printer in the United
States. As of September 30, 1997, the Company and its subsidiaries operated 53
envelope plants and printing facilities throughout the United States and
Canada serving over 40,000 customers.
Since its formation in 1994, the Company has achieved significant growth in
both revenues and net income through a business strategy that focuses on
acquisitions, internal growth and operating leverage. As a result of this
strategy, revenue and net income increased to $778.5 million and $16.9
million, respectively, for the Company in 1996 from $262.3 million and $1.4
million, respectively, for the Company and its predecessors in 1994. For the
six months ended June 30, 1997, the Company's revenue and net income grew to
$419.5 million and $12.6 million, respectively, from $378.8 million and $6.4
million, respectively, during the same period in 1996.
The envelope and high-impact color printing industries are highly
fragmented. There are approximately 215 independent envelope companies in the
United States and Canada, generating in excess of $3.0 billion in annual
revenues. The Company estimates that there are approximately 500 commercial
printing companies in the United States competing in the high-impact color
segment of the printing industry, generating approximately $3.5 billion in
annual revenues in that segment. The Company's objective is to grow both
internally and externally. Internally, the Company plans to expand the
products and services sold to existing customers and to add new customers.
Externally, the Company plans to continue to grow by pursuing acquisition
opportunities to capitalize on the consolidation occurring within these
industries. From December 1, 1994 through September 30, 1997, the Company
completed ten acquisitions in the envelope and commercial printing industries,
ranging in size from $6.1 million to $97.4 million.
Management believes that it enjoys, and will continue to enjoy, certain
competitive advantages, including (i) the ability to utilize the Company's
network of strategically located plants and sales offices to attract customers
that require production from multiple locations, (ii) the ability to realize
cost savings as a result of volume related purchases of paper, ink and other
raw materials, (iii) the reduction of overhead expense through the
consolidation of certain administrative functions for insurance, employee
health benefits and financial management, (iv) the ability to increase
profitability through the optimization of equipment utilization among
facilities, (v) the ability to offer customers greater flexibility in meeting
their needs due to more available capacity and equipment capabilities and (vi)
the ability to combine the responsiveness of a local or regional facility with
the resources of a large national company.
The Company's envelope products include standard size envelopes as well as
envelopes with features customized for mass mailing markets. The Company also
produces medical folders, overnight mailers, photofinishing envelopes, airline
and car rental jackets, tags and interoffice envelopes. The Company's high-
impact printed products are designed to elicit the maximum response from the
reader and include advertising literature, high-end catalogs and brochures,
calendars and annual reports. The Company is recognized as an innovative
provider of quality printed products to leading companies throughout the
United States.
The Company's principal executive offices are located at 23 Inverness Way
East, Englewood, Colorado 80112; its telephone number is (303) 790-8023.
RECENT DEVELOPMENTS
On June 27, 1997, the Company acquired all of the outstanding shares of
common stock of Griffin Envelope, Inc. ("Griffin"). Griffin, which is located
in Seattle, Washington, manufactures and distributes envelopes in the
northwestern United States. Annual sales for Griffin approximate $12 million.
3
<PAGE>
On July 11, 1997, the Company acquired all of the outstanding shares of
common stock of The Allied Printers ("Allied"). Allied, which is located in
Seattle, Washington, is a high impact color printer servicing customers with
sheet fed printing needs. Annual sales for Allied approximate $17 million. In
addition to other consideration, the Company issued 36,531 shares of common
stock to Edward R. Whitehead, the sole shareholder of Allied, in connection
with this acquisition.
On July 14, 1997, the Company acquired all of the outstanding shares of
common stock of Murray Envelope Corporation ("Murray"). Murray, which is
located in Hattiesburg, Mississippi, manufactures envelopes primarily for sales
through distributors in the southeastern and south central markets.
Additionally, the Barkley division of Murray distributes filing products for
the national market. Annual sales for Murray approximate $48 million. In
connection with the acquisition, a wholly-owned subsidiary of the Company
issued 110,236 shares of common stock which are convertible into an equal
number of shares of Company common stock.
On September 10, 1997, the Company acquired substantially all of the Assets
of National Color Graphics, Inc. ("Color Graphics"). Color Graphics, which is
located in Atlanta, Georgia, is a high impact color printer servicing customers
with sheet fed needs. Annual sales for Color Graphics approximate $23 million.
The Company paid approximately $58.5 million in aggregate consideration, for
Griffin, Allied, Murray and Color Graphics. The consideration consisted of
cash, Common Stock, notes and convertible securities. No single acquisition,
nor the acquisitions in the aggregate, were "significant" as defined by the
rules of the Commission.
RISK FACTORS
An investment in the Securities offered hereby involves a high degree of
risk. Prospective investors should consider carefully the following factors, in
addition to other information contained in this Prospectus and any Prospectus
Supplement, in connection with an investment in the Securities offered hereby.
This Prospectus contains statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The words "expect," "believe,"
"goal," "plan," "intend," "estimate" and similar expressions and variations
thereof used in this Prospectus are intended to specifically identify forward-
looking statements. Those statements appear in a number of places in this
Prospectus and include statements regarding, but not limited to, product demand
and sales, growth rate, ability to obtain assumed productivity savings, quality
controls, availability of acquisition opportunities and their related costs,
cost savings due to integration and synergies associated with acquisitions,
ability to obtain additional financings and bank debt restructuring, interest
rates, foreign currency exchange rates, paper and raw material costs, waste
paper prices, ability to pass through paper costs to customers, postage rates,
changes in the direct mail industry, competition, ability to develop new
products, labor costs, labor relations and advertising costs. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those projected in the forward-
looking statements as a result of various factors. The Company undertakes no
obligation to publicly update or revise forward-looking statements made in this
Prospectus to reflect events or circumstances after the date of this Prospectus
or to reflect the occurrence of unanticipated events.
LEVERAGE. The Company has incurred substantial indebtedness in connection
with financing certain of its acquisitions. The degree to which the Company is
leveraged could have important consequences to the holders of the Company's
Securities, including the following: (i) the Company's ability to obtain
additional financing for working capital, acquisitions or other purposes in the
future may be limited, (ii) a substantial portion of the Company's cash flow
from operations will be dedicated to the payment of principal and interest on
indebtedness, (iii) the Company may be more vulnerable to economic downturns or
other adverse developments than less leveraged competitors, and (iv) borrowings
under the Company's bank credit agreements (as amended through
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<PAGE>
the date hereof, the "Credit Agreements") bear interest at fluctuating rates
which could result in higher interest expense in the event of an increase in
interest rates. The Company's ability to make scheduled payments of principal
or interest on, or to refinance, indebtedness will depend on future operating
performance and cash flow, which are subject to prevailing economic conditions
and financial, competitive and other factors beyond the Company's control. See
"Ratio of Earnings to Fixed Charges."
AVAILABILITY, FINANCING AND INTEGRATION OF ACQUISITIONS. The Company has
grown rapidly through acquisitions. Although the Company believes it has an
adequate infrastructure, there can be no assurance that the Company's current
management, personnel and other corporate infrastructure will be adequate to
manage the Company's growth. In addition, to the extent the success of the
Company's strategy is contingent on making further acquisitions, there can be
no assurance that the Company will be able to identify and acquire acceptable
acquisition candidates on terms favorable to the Company or that the Company
will be able to integrate such acquisitions successfully. Increased
competition for acquisition candidates may develop, in which event there may
be fewer acquisition opportunities available to the Company as well as higher
acquisition prices. There can be no assurance that the Company will be able to
continue to identify, acquire or profitably manage additional businesses or
successfully integrate acquired businesses, if any, into the Company without
substantial costs, delays or other operational or financial problems. Further,
acquisitions involve a number of special risks, including possible adverse
effects on the Company's operating results, diversion of management's
attention, failure to retain key acquired personnel, risks associated with
unanticipated events or liabilities and amortization of acquired intangible
assets, some or all of which could have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company may finance future acquisitions through the issuance of the
Securities, the incurrence of additional bank indebtedness, the utilization of
cash from operations, or a combination thereof. In the event that the Common
Stock does not maintain a sufficient market value, or potential acquisition
candidates are otherwise unwilling to accept Common Stock or other Securities
as part of the consideration for the sale of their businesses, the Company may
be required to utilize more of its cash resources or available funds under its
Credit Agreements in order to finance future acquisitions. If the Company does
not have sufficient cash resources, its ability to make acquisitions could be
limited unless it is able to obtain additional capital through debt or equity
financings. There can be no assurance that the Company will be able to obtain
all the financing it will need in the future on terms the Company deems
acceptable.
UNITED STATES AND CANADIAN POSTAL SERVICES. Because the great majority of
envelopes used in the United States and Canada are sent through the mail,
postal rates are a significant factor affecting the growth of envelope usage.
Historically, increases in postal rates, relative to changes in the cost of
alternative delivery means and/or advertising media, have resulted in
temporary reductions in the growth rate of mail sent. For example, third class
postal rates increased approximately 50% and 14% in 1991 and 1995,
respectively, contributing to a substantial leveling off in the growth rate of
third class mail sent during the periods following such increases. In 1997,
the U.S. Postal Service announced proposed rate increases of approximately 4%
for direct mail and 3% for first class mail, and a proposed 6% rate decrease
for prepaid, courtesy reply envelopes. The recent proposed postal rate
increases are significantly less than the cumulative rate of inflation since
the last postal rate increases. Management does not expect that these postal
rate increases will go into effect until mid-1998 and, if implemented, does
not anticipate the rate increases to negatively impact mail volume, although
there can be no assurance in that regard.
The Canadian Post Corporation (the "CPC") increased the basic postal rate by
approximately 4.7% in 1995, and approximately 6.7% in 1996, contributing to a
leveling off of the growth rate of mail sent during the periods immediately
following such increases. Although the CPC has announced its intention to
raise rates further in 1998, management believes such an increase will be
minimal and does not anticipate that it will have a negative impact on mail
volume. There can be no assurance, however, that future increases in United
States and/or Canadian postal rates will not have a material adverse effect on
the Company's financial condition and results of operations.
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The CPC has been operating under an expired labor contract since May 1996.
Although no agreement has been reached, the parties continue to negotiate. In
the event of a work stoppage, the Canadian government has the right to call
the postal workers back to work, a power which it has exercised in previous
work stoppages. Although management believes that a short-term work stoppage
would not have a material, long-term impact on the Company's business, there
can be no assurance that any work stoppage would not be prolonged, or would
not have a material adverse effect on the Company.
LABOR RELATIONS. As of June 30, 1997, the Company had approximately 6,600
full-time employees, of which approximately 2,100 employees were members of 14
local labor unions. If unionized employees were to engage in a concerted
strike or other work stoppage, or if other employees were to become unionized,
the Company could experience a disruption of operations and higher labor
costs. The Company is currently negotiating new union contracts with respect
to four of its larger envelope printing and converting facilities, all of
which have been operating under tentative arrangements which are terminable on
short notice, while the Company's commercial printing facility in Portland is
operating under an extension of its existing agreement, which is not
terminable unless and until a legal impasse has been reached. No new agreement
has been reached with respect to any of these plants. In order to mitigate the
effect of a potential work stoppage, the Company has prepared a contingency
plan for each of these locations. There can be no assurance, however, that the
Company's preparations will prevent a material adverse effect on the Company's
operations in the event of a protracted work stoppage.
COST AND AVAILABILITY OF PAPER. The cost of paper represents a significant
portion of the Company's cost of materials. Increases in paper costs could
have a material adverse effect on the Company's results of operations and
financial condition. Historically, the Company has been successful in
maintaining gross profit margins when paper prices increase by passing paper
price increases on to its customers and by receiving increased proceeds from
waste paper sales. There can be no assurance, however, that the Company will
be able to continue to pass on future increases in the cost of paper.
Moreover, rising paper costs and their consequent impact on the Company's
pricing could have a material adverse effect on the Company's volume of units
sold. For example, successive paper price increases during the latter part of
1995 and early 1996 resulted in a decline in demand for the Company's
products, particularly from the direct-mail advertising industry.
Proceeds from the sale of waste paper were equal to 1.1% of the Company's
net sales and 5.1% of the Company's gross profits for the six months ended
June 30, 1997. Prices for waste paper generally fluctuate in a pattern similar
to changes in raw paper prices. Accordingly, in a falling paper price
environment, the Company's proceeds from waste paper sales could decrease
significantly. Although management believes that the Company will be able to
generate waste paper proceeds in the future, there can be no assurance that
such proceeds will not decline from current levels.
Due to the significance of paper in the manufacture of most of the Company's
products, the Company is dependent upon the availability of paper. During
periods of tight paper supply, many paper producers allocate shipments of
paper based on the historical purchase levels of customers. As a result of the
Company's large volume paper purchases from several paper producers, the
Company generally has not experienced difficulty in obtaining adequate
quantities of paper, although occasionally the Company has experienced minor
delays in delivery. Although management believes that the Company's large
volume paper purchases will continue to enable the Company to receive adequate
supplies of paper in the future, there can be no assurance in this regard.
COMPETITION. The envelope and commercial printing industries in which the
Company competes are extremely fragmented and highly competitive. In the
envelope market, the Company competes primarily with a few multi-plant and
many single-plant companies servicing regional and local markets. The Company
also faces competition from alternative sources of communication and
information transfer such as facsimile machines, electronic mail, interactive
video disks, interactive television and electronic retailing. In the
commercial printing market, the Company competes against a number of large,
diversified and financially stronger printing companies, as well as regional
and local commercial printers, many of which are capable of competing with the
Company in both volume and production quality.
6
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AVAILABILITY OF ALTERNATIVE DELIVERY MEDIA. The Company's envelope printing
and manufacturing business is highly dependent upon the demand for envelopes
sent through the mail. Such demand comes from utility companies, banks and
other financial institutions, among others. As the current trend towards usage
of the Internet and other electronic media by consumers for such purposes as
paying utility and credit card bills grows, the Company expects the demand for
envelopes for such purposes to decline. Although management believes that
overall demand for envelopes will continue to grow at rates comparable to
recent historical levels, there can be no assurance that competition from
alternative media will not have an adverse effect on such demand.
NATURE OF PRINTING BUSINESS. The envelope and high-impact color printing
businesses in which the Company competes are generally characterized by
individual orders from customers or short-term (less than one year) supply
contracts. In the high-impact color printing market in particular, customer
orders are typically for specific printing jobs, and continued or repeat
engagements for successive jobs depending upon the customer's satisfaction
with the services provided. Although the Company is not dependent upon any one
customer or group of customers, and management believes that the Company has
and will continue to have excellent relations with its customers, there can be
no assurance that any particular customer will continue to do business with
the Company over an extended period of time. In addition, the timing of
particular jobs or types of jobs at particular times of year may cause
fluctuations in the financial results of the Company's high-impact color
printing operations in any given quarter.
ASSET ENCUMBRANCES; RESTRICTIVE COVENANTS. The obligations of the Company
under the Credit Agreements are secured by a pledge of all of the capital
stock of Mail-Well I Corporation ("M-W Corporation"), a wholly-owned
subsidiary of the Company, and all of M-W Corporation's subsidiaries, and by a
first priority security interest in substantially all of the assets of M-W
Corporation and its subsidiaries. If the Company becomes insolvent or is
liquidated, or if payment under the Credit Agreements is accelerated, the
lenders under the Credit Agreements would be entitled to exercise the remedies
available to secured lenders under applicable law and pursuant to the Credit
Agreements. Accordingly, such lenders will have a claim on the assets of the
Company and its subsidiaries prior to that of any Security holder.
The Credit Agreements and the indenture pursuant to which the 10 1/2% Senior
Subordinated Notes due 2004 were issued by M-W Corporation (the "Indenture")
contain numerous financial and operating covenants and require the Company and
its subsidiaries to meet certain financial ratios and tests. A failure to
comply with the obligations contained in the Credit Agreements or the
Indenture could result in an event of default under either the Credit
Agreements or the Indenture which could permit acceleration of the related
debt and acceleration of debt under other instruments that may contain cross-
acceleration or cross-default provisions.
CONTROL BY MANAGEMENT AND DIRECTORS. As of September 30, 1997, officers and
directors of the Company and entities affiliated with them beneficially owned
approximately 23% of the then outstanding shares of Common Stock. In addition,
the Company's employee stock ownership plan ("ESOP") owned approximately 10.4%
of the outstanding shares, of which approximately 5.0% were unallocated and
thus voted by management on all matters. As a result, management and directors
exercise substantial influence over the Company's affairs.
VOLATILITY OF STOCK PRICE. Since the completion of the Company's initial
public offering in September 1995, the market price of the Common Stock has
fluctuated significantly. The Company believes that factors such as
announcements of developments related to the Company's business, sales by
competitors, including sales to the Company's customers, sales of the Common
Stock into the public market, including by members of management, developments
in the Company's relationship with its customers, partners, distributors and
suppliers, shortfalls or changes in analysts expectations for revenue, gross
margins, earnings or losses or other financial results, regulatory
developments, fluctuations in results of operations, seasonality and general
conditions in the Company's market or the markets served by the Company's
customers or the economy could cause the price of the Common Stock to
fluctuate substantially. In addition, the stock market has experienced extreme
price fluctuations which have often been unrelated to the operating
performance of affected companies. There can be no assurance that the market
price of the Common Stock will not decline substantially, or otherwise
continue to
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<PAGE>
experience significant fluctuations in the future, including fluctuations that
are unrelated to the Company's operating performance. In addition, to the
extent a public market develops for any of the Company's other Securities,
investors may experience similar levels of volatility, including but not
limited to changes in interest rates generally.
HOLDING COMPANY STRUCTURE. The only asset of the Company is the capital
stock of M-W Corporation. Because all of the operations of the Company are
conducted through its subsidiaries, the Company's cash flow and consequently
its ability to service debt and pay dividends is dependent upon the cash flow
of its subsidiaries and the transfer of funds by its subsidiaries to the
Company in the form of loans, dividends or otherwise. The subsidiaries are
distinct legal entities and have no obligation, contingent or otherwise, to
pay any amounts due pursuant to the various obligations of indebtedness of the
Company or to make any funds available therefor, whether in the form of loans,
dividends or otherwise. Moreover, the Credit Agreements and the Indenture
restrict the Company's ability to pay dividends.
ENVIRONMENTAL COMPLIANCE. The Company's operations are subject to federal,
state and local environmental laws and regulations relating to air emissions,
waste generation, handling, management and disposal, and at certain
facilities, wastewater treatment and discharge. In addition, certain of the
Company's predecessors have been designated as potentially responsible parties
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 with respect to off-site disposal of hazardous waste. While management
believes that the Company has minimal exposure as a result of such
designations and that the Company's current operations are in substantial
compliance with applicable environmental laws and regulations, there can be no
assurance that currently unknown matters, new laws and regulations, or
stricter interpretations of existing laws and regulations will not materially
affect the Company's business or operations in the future.
DEPENDENCE ON KEY MANAGEMENT. The Company's success will continue to depend
to a significant extent on its executive officers and other key management
personnel. The Company has not currently entered into employment agreements
with its executive officers. There can be no assurance that the Company will
be able to retain its executive officers and key personnel or attract
additional qualified management in the future. In addition, the success of
certain of the Company's acquisitions may depend, in part, on the Company's
ability to retain management personnel of the acquired companies. The Company
does not carry key-person insurance on any of its managerial personnel.
USE OF PROCEEDS
Except as otherwise indicated in this Prospectus and in an accompanying
Prospectus Supplement, the Company intends to use the net proceeds from the
sale of the Securities offered hereby for general corporate purposes, which
may include, without limitation, capital expenditures, possible future
acquisitions, repayment of outstanding indebtedness, working capital
requirements and other corporate purposes. Pending any of the foregoing
applications, the net proceeds may be invested temporarily in short-term,
investment-grade, interest bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing the sum of
historical earnings from continuing operations before taxes on income and
fixed charges, as adjusted, by fixed charges. Fixed charges represent interest
expense (including capitalized interest) and amortization of debt discount and
expense and that portion of rental expense which is deemed to be
representative of interest.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEAR ENDED
JUNE 30 DECEMBER 31
----------- -----------------
1997 1996 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............. 2.74 1.71 1.94 1.60 1.35
</TABLE>
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the applicable Prospectus
Supplement relating to such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series,
and will constitute either Senior Subordinated Debt Securities or Subordinated
Debt Securities. Senior Subordinated Debt Securities may be issued from time
to time under an Indenture (the "Senior Subordinated Debt Securities
Indenture") to be entered into between the Company and a trustee to be named
in the applicable Prospectus Supplement (the "Senior Subordinated Debt
Securities Trustee"). Subordinated Debt Securities may be issued from time to
time under an Indenture (the "Subordinated Debt Securities Indenture") to be
entered into between the Company and a trustee to be named in the applicable
Prospectus Supplement (the "Subordinated Debt Securities Trustee").
The Senior Subordinated Debt Securities Indenture and the Subordinated Debt
Securities Indenture are referred to herein individually as an "Indenture" and
collectively as the "Indentures," and the Senior Subordinated Debt Securities
Trustee and the Subordinated Debt Securities Trustee are referred to herein
individually as the "Trustee" and collectively as the "Trustees." Forms of the
Indentures are filed as exhibits to the Registration Statement. The Indentures
will be subject to and governed by the Trust Indenture Act of 1939, as amended
(the "TIA"). Capitalized terms used in this section which are not otherwise
defined in this Prospectus shall have the meanings set forth in the Indentures
to which they relate. The following summaries of certain provisions of the
Debt Securities and the Indentures do not purport to be complete and are
subject to, and are qualified in their entirety by express reference to, all
the provisions of the Indentures, including the definitions therein of certain
terms. As used in this section of the Prospectus, the "Company" refers to
Mail-Well, Inc. and does not include its subsidiaries.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company.
The Indentures do not limit the aggregate principal amount of Debt Securities
that may be issued thereunder and provide that Debt Securities may be issued
thereunder from time to time in one or more series. Under the Indentures, the
Company will have the ability to issue Debt Securities with terms different
from those of Debt Securities previously issued, without the consent of the
holders of previously issued series of Debt Securities, in an aggregate
principal amount determined from time to time by the Company.
The applicable Prospectus Supplement or Prospectus Supplements relating to
any Senior Subordinated Debt Securities or Subordinated Debt Securities will
set forth the aggregate amount of other outstanding indebtedness, if any, that
would be senior to such Debt Securities and any limitation on the issuance of
additional senior indebtedness.
Securities may be issued as discount securities which may be sold at a
discount below their principal amount. Even if Securities are not issued at a
discount below their principal amount, such Securities may, for United States
Federal income tax purposes, be deemed to have been issued with "original
issue discount" ("OID") because of certain interest payment characteristics.
Special United States Federal income tax considerations applicable to
Securities issued with original issue discount, including discount securities,
will be described in more detail in any applicable Prospectus Supplement. In
addition, special United States Federal tax considerations or other
restrictions or terms applicable to any Debt Securities which are issuable in
bearer form, offered exclusively to United States Aliens or denominated in a
currency other than United States dollars will be set forth in the Prospectus
Supplement relating thereto.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities
offered thereby (the "Offered Debt Securities"): (i) the title of the Offered
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<PAGE>
Debt Securities; (ii) any limit on the aggregate principal amount of the
Offered Debt Securities; (iii) whether the Offered Debt Securities are to be
issuable as registered securities or bearer securities or both and whether the
Offered Debt Securities may be represented initially by a Debt Security in
temporary or permanent global form, and if so, the initial Depositary with
respect to such temporary or permanent global Debt Security and whether, and
the circumstances under which, beneficial owners of interests in any such
temporary or permanent global Debt Security may exchange such interests for
Debt Securities of such series and of like tenor of any authorized form and
denomination; (iv) the price or prices at which the Offered Debt Securities
will be issued; (v) the date or dates on which the principal of the Offered
Debt Securities is payable or the method of determination thereof; (vi) the
place or places where and the manner in which the principal of and premium, if
any, and interest, if any, on such Offered Debt Securities will be payable and
the place or places where such Offered Debt Securities may be presented for
transfer and, if applicable, conversion or exchange; (vii) the rate or rates
at which the Offered Debt Securities will bear interest, or the method of
calculating such rate or rates, if any, and the date or dates from which such
interest, if any, will accrue; (viii) the Stated Maturities (as defined below)
of installments of interest (the "Interest Payment Dates"), if any, on which
any interest on the Offered Debt Securities will be payable, and the Regular
Record Date for any interest payable on any Offered Debt Securities which are
registered securities; (ix) the right or obligation, if any, of the Company to
redeem or purchase Debt Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a holder thereof, the conditions,
if any, giving rise to such right or obligation, and the period or periods
within which, and the price or prices at which and the terms and conditions
upon which Debt Securities of the series shall be redeemed or purchased, in
whole or part, and any provisions for the remarketing of such Debt Securities;
(x) whether such Offered Debt Securities are convertible or exchangeable into
other debt or equity securities, and, if so, the terms and conditions upon
which such conversion or exchange will be effected, including the initial
conversion or exchange price or rate and any adjustments thereto, the
conversion or exchange period and other conversion or exchange provisions;
(xi) the currency or currencies, including composite currencies or currency
units, of payment of principal of and interest, if any, on the Offered Debt
Securities, if other than U.S. dollars, and, if other than U.S. dollars,
whether the Offered Debt Securities may be satisfied and discharged other than
as provided in the Indenture and whether the Company or the holders of any
such Offered Debt Securities may elect to receive payments in respect of such
Offered Debt Securities in a currency or currency units other than that in
which such Offered Debt Securities are stated to be payable; (xii) any terms
applicable to such Offered Debt Securities issued at an issue price below
their stated principal amount, including the issue price thereof and the rate
or rates at which such original issue discount will accrue; (xiii) if the
amount of payments of principal of and interest, if any, on the Offered Debt
Securities is to be determined by reference to an index or formula, or based
on a coin or currency or currency unit other than that in which the Offered
Debt Securities are stated to be payable, the manner in which such amounts are
to be determined and the calculation agent, if any, with respect thereto;
(xiv) if other than the principal amount thereof, the portion of the principal
amount of the Offered Debt Securities which will be payable upon declaration
or acceleration of the maturity thereof pursuant to an Event of Default; (xv)
any deletions from, modifications of or additions to the Events of Default or
covenants of the Company with respect to such Offered Debt Securities, whether
or not such Events of Default or covenants are consistent with the Events of
Default or covenants set forth herein; (xvi) any special United States Federal
income tax considerations applicable to the Offered Debt Securities; and
(xvii) any other terms of the Offered Debt Securities not inconsistent with
the provisions of the applicable Indenture. The applicable Prospectus
Supplement will also describe the following terms of any series of Senior
Subordinated Debt Securities or Subordinated Debt Securities offered hereby in
respect of which this Prospectus is being delivered: (a) the rights, if any,
to defer payments of interest on the Senior Subordinated Debt Securities or
Subordinated Debt Securities of such series by extending the interest payment
period, and the duration of such extensions, and (b) the subordination terms
of the Senior Subordinated Debt Securities or Subordinated Debt Securities of
such series. The foregoing is not intended to be an exclusive list of the
terms that may be applicable to any Offered Debt Securities and shall not
limit in any respect the ability of the Company to issue Debt Securities with
terms different from or in addition to those described above or elsewhere in
this Prospectus provided that such terms are not inconsistent with the
applicable Indenture. Any such Prospectus Supplement will also describe any
special provisions for the payment of additional amounts with respect to the
Offered Debt Securities.
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The operations of the Company are currently conducted almost entirely
through subsidiaries. Accordingly, the Company's cash flow and its consequent
ability to service debt, including the Debt Securities, are dependent, in
large part, upon the earnings of its subsidiaries and the distribution of
those earnings to the Company, whether by dividends, loans or otherwise. The
payment of dividends and the making of loans and advances to the Company by
its subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of those subsidiaries and are subject to various
business considerations. Any right of the Company to receive assets of any of
its subsidiaries upon their liquidation or reorganization (and the consequent
right of the holders of the Debt Securities to participate in those assets)
will be effectively subordinated to the claims of that subsidiary's creditors
(including trade creditors and tort claimants), except to the extent that the
Company is itself recognized as a creditor of such subsidiary, in which case
the claims of the Company would still be subordinate to any security interests
in the assets of such subsidiary and any indebtedness of such subsidiary
senior to that held by the Company.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Indentures do not include covenants limiting the amount of indebtedness that
may be incurred or otherwise restricting the Company's ability to enter into a
highly leveraged transaction, including a reorganization, restructuring,
merger or similar transaction involving the Company, that may adversely affect
the holders of the Debt Securities, if such transaction is a permissible
consolidation, merger or similar transaction. In addition, unless otherwise
specified in an applicable Prospectus Supplement, the Indentures do not afford
the holders of the Debt Securities the right to require the Company to
repurchase or redeem the Debt Securities in the event of a highly leveraged
transaction. See "Mergers and Sale of Assets."
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Debt Securities of a series may be issued solely as registered
securities, solely as bearer securities (with or without coupons attached) or
as both registered securities and bearer securities. Debt Securities of a
series may be issuable in whole or in part in the form of one or more global
Debt Securities, as described below under "Global Debt Securities." Unless
otherwise indicated in an applicable Prospectus Supplement, registered
securities will be issuable in denominations of $1,000 and integral multiples
thereof, and bearer securities will be issuable in denominations of $5,000 and
$100,000.
Registered securities of any series will be exchangeable for other
registered securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. In addition, if Debt
Securities of any series are issuable as both registered securities and as
bearer securities, at the option of the holder, subject to the terms of the
applicable Indenture, bearer securities (accompanied by all unmatured coupons,
except as provided below, and all matured coupons in default) of such series
will be exchangeable for registered securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Unless otherwise indicated in an applicable Prospectus Supplement, any bearer
security surrendered in exchange for a registered security between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest will be surrendered without the coupon relating to such date for
payment of interest and interest will not be payable in respect of the
registered security issued in exchange for such bearer security, but will be
payable only to the holder of such coupon when due in accordance with the
terms of the applicable Indenture. Bearer securities may not be issued in
exchange for registered securities.
Debt Securities may be presented for exchange as provided above, and unless
otherwise indicated in an applicable Prospectus Supplement, registered
securities may be presented for registration of transfer, at the office or
agency of the Company designated as registrar or co-registrar with respect to
any series of Debt Securities, without service charge and upon payment of any
taxes, assessments or other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected on the books
of the registrar or any other transfer agent appointed by the Company upon
such registrar or transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
intends to initially appoint the Trustee as registrar and the name of any
different or additional registrar designated by the Company with respect to
the Offered Debt Securities will be included in the Prospectus Supplement
relating thereto. If a
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Prospectus Supplement refers to any transfer agents (in addition to the
registrar) designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
only as registered securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as bearer securities, the Company will be
required to maintain (in addition to the registrar) a transfer agent in a
Place of Payment for such series located outside the United States. The
Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.
In the event of any partial redemption of Debt Securities of any series, the
Company will not be required to (i) issue, register the transfer of or
exchange Debt Securities of that series during a period beginning at the
opening of business 15 days before any selection of Debt Securities of that
series to be redeemed and ending at the close of business on (a) if Debt
Securities of the series are issuable only as registered securities, the day
of mailing of the relevant notice of redemption, and (b) if Debt Securities of
the series are issuable as bearer securities, the day of the first publication
of the relevant notice of redemption or, if Debt Securities of the series are
also issuable as registered securities and there is no publication, the
mailing of the relevant notice of redemption; (ii) register the transfer of or
exchange any registered security, or portion thereof, called for redemption,
except the unredeemed portion of any registered security being redeemed in
part; or (iii) exchange any bearer security called for redemption, except to
exchange such bearer security for a registered security of that series and of
like tenor and principal amount that is immediately surrendered for
redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest on any registered securities will be made at the
office of such paying agent or paying agents as the Company may designate from
time to time, except that at the option of the Company payment of principal or
interest may be made by check or by wire transfer to an account maintained by
the payee. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on registered securities will be made
to the person in whose name such registered security is registered at the
close of business on the Regular Record Date for such payment of interest.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on bearer securities will be payable,
subject to any applicable laws and regulations, at the offices of such paying
agents outside the United States as the Company may designate from time to
time, or by check or transfer to an account maintained by the payee outside
the United States. Unless otherwise indicated in an applicable Prospectus
Supplement, any payment of interest on any bearer securities will be made only
against surrender of the coupon relating to such interest installment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will be designated as the Company's sole paying agent for payments
with respect to Debt Securities which are issuable solely as registered
securities and as the Company's paying agent for payments with respect to Debt
Securities (subject to any limitations described in any applicable Prospectus
Supplement) which are issuable as bearer securities. Any paying agents outside
the United States and any other paying agents in the United States initially
designated by the Company for the Offered Debt Securities will be named in an
applicable Prospectus Supplement. The Company may at any time designate
additional paying agents or rescind the designation of any paying agent or
approve a change in the office through which any paying agent acts, except
that, if Debt Securities of a series are issuable only as registered
securities, the Company will be required to maintain a paying agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as bearer securities, the Company will be required to maintain (i) a
paying agent for payments with respect to any registered securities of the
series (and for payments with respect to bearer securities of the series in
the circumstances described in the Indenture, but not otherwise), and (ii) a
paying agent in a Place of Payment located outside the United States where
Debt Securities of such series and any related coupons may be presented and
surrendered for payment.
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All moneys paid by the Company to a paying agent for the payment of
principal of or interest, if any, on any Debt Security which remains unclaimed
at the end of two years after such principal or interest shall have become due
and payable will be repaid to the Company, and the holder of such Debt
Security or any coupon will thereafter look only to the Company for payment
thereof.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of,
a Depositary, which will be identified in an applicable Prospectus Supplement.
A global Debt Security may be issued in either registered or bearer form and
in either temporary or permanent form. A Debt Security in global form may not
be transferred except as a whole to the Depositary for such Debt Security or
to a nominee or successor of such Depositary. If any Debt Securities of a
series are issuable in global form, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such global Debt Security may exchange such interests for definitive
Debt Securities of such series and of like tenor and principal amount in any
authorized form and denomination, the manner of payment of principal of and
interest, if any, on any such global Debt Security and the specific terms of
the depositary arrangement with respect to any such global Debt Security.
MERGERS AND SALES OF ASSETS
The Company, in a single transaction or series of related transactions, may
not consolidate with or merge into any other person or convey, transfer or
lease all or substantially all of its properties and assets to another person
or group of affiliated persons, unless, among other things, (i) the resulting,
surviving or transferee person (if other than the Company) is organized and
existing under the laws of the United States, any state thereof or the
District of Columbia and such person expressly assumes all obligations of the
Company under the Debt Securities and the Indenture, and (ii) immediately
after giving effect to such transaction, no event which is, or after notice or
passage of time or both would be, an Event of Default (any such event, a
"Default") or Event of Default shall have occurred or be continuing under the
Indenture. Upon the assumption of the Company's obligations by a person to
whom such properties or assets are conveyed, transferred or leased, subject to
certain exceptions, the Company shall be discharged from all obligations under
the Debt Securities and the Indenture.
EVENTS OF DEFAULT
Each Indenture provides that, if an Event of Default specified therein shall
have occurred and be continuing, with respect to each series of the Debt
Securities outstanding thereunder individually, the Trustee or the holders of
not less than 25% in aggregate principal amount of the outstanding Debt
Securities of such series may declare the principal amount (or, if any of the
Debt Securities of such series are Discount Securities, such portion of the
principal amount of such Debt Securities as may be specified by the terms
thereof) of the Debt Securities of such series to be immediately due and
payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series may rescind
any such declaration.
Under each Indenture, an Event of Default is defined as, with respect to
each series of Securities outstanding thereunder individually, any of the
following: (i) default in payment of the principal of any Debt Security of
such series; (ii) default in payment of any interest on any Debt Security of
such series when due, continuing for 30 days (or such other period as shall be
set forth in the applicable Prospectus Supplement); (iii) failure by the
Company to comply with its other agreements in the Debt Securities of such
series or such Indenture for the benefit of the holders of Debt Securities of
such series upon the receipt by the Company of notice of such Default by the
Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of such series and the Company's failure to cure
such Default within 60 days (or such other period as shall be set forth in the
applicable Prospectus Supplement) after receipt by the Company of such notice;
(iv) certain events of bankruptcy or insolvency; and (v) any other Event of
Default set forth in the applicable Prospectus Supplement.
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The Trustee shall give notice to holders of the Debt Securities of any
continuing Default known to the Trustee within 90 days after the occurrence
thereof; provided, that the Trustee may withhold such notice, as to any
Default other than a payment Default, if it determines in good faith that
withholding the notice is in the interests of the holders.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series may 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 with respect to the Debt Securities of such
series; provided that such direction shall not be in conflict with any law or
the Indenture and subject to certain other limitations. Before proceeding to
exercise any right or power under the Indenture at the direction of such
holders, the Trustee shall be entitled to receive from such holders reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with any such
direction. With respect to each series of Debt Securities, no holder will have
any right to pursue any remedy with respect to the Indenture or the Debt
Securities, unless (i) such holder shall have previously given the Trustee
written notice of a continuing Event of Default with respect to the Debt
Securities of such series; (ii) the holders of at least 25% in aggregate
principal amount of the outstanding Debt Securities of such series shall have
made a written request to the Trustee to pursue such remedy; (iii) such holder
or holders have offered to the Trustee reasonable indemnity satisfactory to
the Trustee; (iv) the holders of a majority in aggregate principal amount of
the outstanding Debt Securities of such series have not given the Trustee a
direction inconsistent with such request within 60 days after receipt of such
request; and (v) the Trustee shall have failed to comply with the request
within such 60-day period.
Notwithstanding the foregoing, the right of any holder of any Debt Security
or coupon to receive payment of the principal of and interest in respect of
such Debt Security or payment of such coupon on the date specified in such
Debt Security or coupon representing such installment of interest as the fixed
date on which an amount equal to the principal of such Debt Security or an
installment of principal thereof or interest thereon is due and payable (the
"Stated Maturity" or "Stated Maturities") or to institute suit for the
enforcement of any such payments shall not be impaired or adversely affected
without such holder's consent. The holders of at least a majority in aggregate
principal amount of the outstanding Debt Securities of any series may waive an
existing Default with respect to such series and its consequences, other than
(i) any Default in any payment of the principal of, or interest on, any Debt
Security of such series or (ii) any Default in respect of certain covenants or
provisions in the Indenture which may not be modified without the consent of
the holder of each outstanding Debt Security of such series affected as
described in "Modification and Waiver," below.
Each Indenture provides that the Company shall deliver to the Trustee within
120 days after the end of each fiscal year of the Company (beginning with the
first fiscal year ending after the execution of the relevant Indenture) an
officers' certificate stating whether or not the signers know of any Default
that occurred during such period.
MODIFICATION AND WAIVER
The Company and the Trustee may execute a supplemental indenture without the
consent of the holders of the Debt Securities or any related coupons (i) to
add to the covenants, agreements and obligations of the Company for the
benefit of the holders of all the Debt Securities of any series or to
surrender any right or power conferred in the Indenture upon the Company; (ii)
to evidence the succession of another corporation to the Company and the
assumption by it of the obligations of the Company under the Indenture and the
Debt Securities; (iii) to provide that bearer securities may be registrable as
to principal, to change or eliminate any restrictions (including restrictions
relating to payment in the United States) on the payment of principal of or
interest, if any, on bearer securities, to permit bearer securities to be
issued in exchange for registered securities, to permit bearer securities to
be issued in exchange for bearer securities of other authorized denominations
or to permit the issuance of Debt Securities in uncertificated form; (iv) to
establish the form or terms of Debt Securities of any series and any related
coupons as permitted by the Indenture; (v) to provide for the acceptance of
appointment under the Indenture of a successor Trustee with respect to the
Debt Securities of one or more series
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and to add to or change any provisions of the Indenture as shall be necessary
to provide for or facilitate the administration of the trusts by more than one
Trustee; (vi) to cure any ambiguity, defect or inconsistency; (vii) to add to,
change or eliminate any provisions (which addition, change or elimination may
apply to one or more series of Debt Securities), provided that any such
addition, change or elimination neither (a) applies to any Debt Security of
any series created prior to the execution of such supplemental indenture and
is entitled to the benefit of such provision nor (b) modifies the rights of
the holder of any such Debt Security with respect to such provision; (viii) to
secure the Debt Securities; or (ix) to make any other change that does not
adversely affect the rights of any Security holder.
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt
Securities of the series affected by such supplemental indenture, the Company
and the Trustee may also execute a supplemental indenture to add provisions
to, or change in any manner or eliminate any provisions of, the Indenture with
respect to such series of Debt Securities or modify in any manner the rights
of the holders of the Debt Securities of such series and any related coupons
under such Indenture; provided that no such supplemental indenture will,
without the consent of the holder of each such outstanding Debt Security
affected thereby (i) change the stated maturity of the principal of, or any
installment of principal or interest on, any such Debt Security or any premium
payable upon redemption thereof, or reduce the amount of principal of any Debt
Security that is a discount security and that would be due and payable upon
declaration of acceleration of maturity thereof, (ii) reduce the principal
amount of, or the rate of interest on, any such Debt Security; (iii) change
the place or currency of payment of principal or interest, if any, on any such
Debt Security; (iv) impair the right to institute suit for the enforcement of
any payment on or with respect to any such Debt Security; (v) reduce the
above-stated percentage of holders of Debt Securities of any series necessary
to modify or amend such Indenture; (vi) modify the foregoing requirements or
reduce the percentage in principal amount of outstanding Debt Securities of
any series necessary to waive any covenant or past default; or (vii) amend or
modify any of the provisions of such Indenture relating to subordination of
the Debt Securities in any manner adverse to the holders of such Debt
Securities. Holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may waive certain past Defaults and
may waive compliance by the Company with certain of the restrictive covenants
described above with respect to the Debt Securities of such series.
DISCHARGE AND DEFEASANCE
Unless otherwise indicated in an applicable Prospectus Supplement, each
Indenture provides that the Company may satisfy and discharge obligations
thereunder with respect to the Debt Securities of any series by delivering to
the Trustee for cancellation all outstanding Debt Securities of such series or
depositing with the Trustee, after such outstanding Debt Securities have
become due and payable, cash sufficient to pay at Stated Maturity all of the
outstanding Debt Securities of such series and paying all other sums payable
under the Indenture with respect to such series.
In addition, unless otherwise indicated in an applicable Prospectus
Supplement, each Indenture provides that the Company (a) shall be discharged
from its obligations in respect of the Debt Securities of such series
("defeasance and discharge"), or (b) may cease to comply with certain
restrictive covenants ("covenant defeasance") including those described under
"Mergers and Sales of Assets" and any such omission shall not be an Event of
Default with respect to the Debt Securities of such series, in each case at
any time prior to the Stated Maturity or redemption thereof, when the Company
has irrevocably deposited with the Trustee, in trust, (i) sufficient funds in
the currency or currency unit in which the Debt Securities are denominated to
pay the principal of (and premium, if any) and interest to Stated Maturity (or
redemption) on, the Debt Securities of such series, or (ii) such amount of
direct obligations of, or obligations the principal of (and premium, if any)
and interest on which are fully guaranteed by, the government which issued the
currency in which the Debt Securities are denominated, and which are not
subject to prepayment, redemption or call, as will, together with the
predetermined and certain income to accrue thereon without consideration of
any reinvestment thereof, be sufficient to pay when due the principal of (and
premium, if any) and interest to Stated Maturity (or redemption) on, the Debt
Securities of such series. Such defeasance and discharge and covenant
defeasance are conditioned
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upon, among other things, the Company's delivery of an opinion of counsel that
the holders of the Debt Securities of such series will not recognize income,
gain or loss for United States Federal income tax purposes as a result of such
defeasance, and will be subject to tax in the same manner as if no defeasance
and discharge or covenant defeasance, as the case may be, had occurred. Upon
such defeasance and discharge, the holders of the Debt Securities of such
series shall no longer be entitled to the benefits of the Indenture, except
for the purposes of registration of transfer and exchange of the Debt
Securities of such series and replacement of lost, stolen or mutilated Debt
Securities and shall look only to such deposited funds or obligations for
payment.
THE TRUSTEES
Each Trustee will be permitted to engage in other transactions with the
Company and its subsidiaries; however, if any Trustee acquires any conflicting
interest, it must eliminate such conflict or resign.
DESCRIPTION OF PREFERRED STOCK
The Company may issue, from time to time, shares of one or more series or
classes of Preferred Stock. The following description sets forth certain
general terms and provisions of the Preferred Stock to which any Prospectus
Supplement may relate. The particular terms of any series of Preferred Stock
and the extent, if any, to which such general provisions may apply to the
series of Preferred Stock so offered will be described in the Prospectus
Supplement relating to such Preferred Stock. The following summary of certain
provisions of the Preferred Stock does not purport to be complete and is
subject to, and is qualified in its entirety by express reference to, the
provisions of the Company's Articles of Incorporation (the "Articles of
Incorporation") and the Certificate of Designation relating to a specific
series of the Preferred Stock (the "Certificate of Designation"), which will
be in the form filed as an exhibit to, or incorporated by reference in, the
Registration Statement of which this Prospectus is a part at or prior to the
time of issuance of such series of Preferred Stock.
Under the Articles of Incorporation, the Company has the authority to issue
up to twenty-five thousand (25,000) shares of Preferred Stock. The Board of
Directors of the Company is authorized to issue shares of Preferred Stock, in
one or more series or classes, and to fix for each such series voting powers
and such preferences and relative, participating, optional or other special
rights and such qualifications, limitations or restrictions as are permitted
by the Colorado Business Corporation Act.
The Board of Directors of the Company shall be authorized to determine for
each series of Preferred Stock, and the Prospectus Supplement shall set forth
with respect to such series: (1) the distinguishing designation of, and the
number of shares of Preferred Stock that shall constitute, such series; (2)
the rights in respect of dividends, if any, of such series of Preferred Stock,
the extent of the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes or any other series of the
same or other class or classes of capital stock of the Company and whether
such dividends shall be cumulative or noncumulative; (3) the right, if any, of
the holders of such series of Preferred Stock to convert the same into, or
exchange the same for, shares of any other class or classes or of any other
series of the same or any other class or classes of capital stock of the
Company, and the terms and conditions of such conversion or exchange; (4)
whether or not shares of such series of Preferred Stock shall be subject to
redemption, and the redemption price or prices and the time or times at which,
and the terms and conditions on which, shares of such series of Preferred
Stock may be redeemed; (5) the rights, if any, of the holders of such series
of Preferred Stock upon the voluntary or involuntary liquidation, dissolution
or winding-up of the Company or in the event of any merger or consolidation of
or sale of assets by the Company; (6) the terms of any sinking fund or
redemption or repurchase or purchase account, if any, to be provided for
shares of such series of Preferred Stock; (7) the voting powers, if any, of
the holders of any series of Preferred Stock generally or with respect to any
particular matter, which may be less than, equal to or greater than one vote
per share, and which may, without limiting the generality of the foregoing,
include the right, voting as a series of Preferred Stock as a class, to elect
one or more directors of the Company generally or under such specific
circumstances and on such conditions, as shall be provided in the resolution
or resolutions of the Board of Directors adopted pursuant hereto, including,
without limitation, in the event there shall have been
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a default in the payment of dividends on or redemption of any one or more
series of Preferred Stock; and (8) such other powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions thereof, as the Board of
Directors shall determine.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when and
as declared by the Board of Directors of the Company out of funds of the
Company legally available therefor, a cash dividend payable in such amounts,
at such dates and at such rates, if any, per share as set forth in the
applicable Prospectus Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, no
dividends (other than in common stock or other capital stock ranking junior to
the Preferred Stock as to dividends and upon liquidation) shall be declared or
paid or set aside for payment, nor shall any other distribution be declared or
made upon the common stock, or any other capital stock of the Company ranking
junior to or on a parity with the Preferred Stock as to dividends, nor shall
any common stock or any other capital stock of the Company ranking junior to
or on a parity with the Preferred Stock as to dividends be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Company (except by conversion into or exchange for other capital
stock of the Company ranking junior to the Preferred Stock as to dividends)
unless (i) if such series of Preferred Stock has a cumulative dividend, full
cumulative dividends on the Preferred Stock have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for all past dividend periods and the then current dividend period and
(ii) if such series of Preferred Stock does not have a cumulative dividend,
full dividends on the Preferred Stock have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for the then current dividend period; provided, however,
that any monies theretofore deposited in any sinking fund with respect to any
preferred stock in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the
Preferred Stock outstanding on the last dividend payment date shall have been
paid or declared and set apart for payment and provided, further; that any
such junior or parity preferred stock or common stock may be converted into or
exchanged for stock of the Company ranking junior to the Preferred Stock as to
dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not
bear interest.
CONVERTIBILITY
No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the applicable Prospectus
Supplement, which will set forth the terms and conditions upon which such
conversion or exchange may be effected, including the initial conversion or
exchange rate and any adjustments thereto, the conversion or exchange period
and any other conversion or exchange provisions.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking fund except as set forth in the applicable Prospectus Supplement,
which will set forth the terms and conditions thereof, including the dates and
redemption prices of any such redemption, any conditions thereto, and any
other redemption or sinking fund provisions.
LIQUIDATION RIGHTS
Unless otherwise set forth in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of the Company, the
holders of shares of each series of Preferred Stock are entitled to
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receive out of assets of the Company available for distribution to
stockholders, before any distribution of assets is made to holders of (i) any
other shares of preferred stock ranking junior to such series of Preferred
Stock as to rights upon liquidation, dissolution or winding up and (ii) shares
of common stock, liquidating distributions per share in the amount of the
liquidation preference specified in the applicable Prospectus Supplement for
such series of Preferred Stock plus any dividends accrued and accumulated but
unpaid to the date of final distribution; but the holders of each series of
Preferred Stock will not be entitled to receive the liquidating distribution
of, plus such dividends on, such shares until the liquidation preference of
any shares of the Company's capital stock ranking senior to such series of the
Preferred Stock as to the rights upon liquidation, dissolution or winding up
shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. If upon any liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock, and any
other Preferred Stock ranking as to any such distribution on a parity with the
Preferred Stock are not paid in full, the holders of the Preferred Stock and
such other parity preferred stock will share ratably in any such distribution
of assets in proportion to the full respective preferential amount to which
they are entitled. Unless otherwise specified in a Prospectus Supplement for a
series of Preferred Stock, after payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Company. Neither a consolidation or merger of the Company with,
or into, another corporation nor a sale of securities, lease, transfer or
conveyance shall be considered a liquidation, dissolution or winding up of the
Company.
VOTING RIGHTS
The Board of Directors may determine the voting powers, if any, of the
holders of any series of Preferred Stock generally or with respect to any
particular matter. Any such voting rights may be less than, equal to or
greater than one vote per share, and which may, without limiting the
generality of the foregoing, include the right, voting as a series of
Preferred Stock as a class, to elect one or more directors of the Company
generally or under such specific circumstances and on such conditions, as
shall be provided in the resolution or resolutions of the Board of Directors
adopted pursuant to the Articles of Incorporation, including, without
limitation, in the event there shall have been a default in the payment of
dividends on or redemption of any one or more series of Preferred Stock.
Holders of shares of Preferred Stock will have no voting rights except as
provided in the Prospectus Supplement and as otherwise required from time to
time by applicable law.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or
otherwise reacquired by the Company shall resume the status of authorized and
unissued shares of Preferred Stock undesignated as to series, and shall be
available for subsequent issuance. There are no restrictions on repurchase or
redemption of the Preferred Stock while there is any arrearage on sinking fund
installments except as may be set forth in an applicable Prospectus
Supplement. Payment of dividends on any series of Preferred Stock may be
restricted by loan agreements, indentures and other transactions entered into
by the Company. The accompanying Prospectus Supplement will describe any
material contractual restrictions on dividend payments.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable Prospectus Supplement, the
Articles of Incorporation or the applicable Certificate of Designation or as
otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock will be
designated in the applicable Prospectus Supplement.
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DESCRIPTION OF DEPOSITORY SHARES
GENERAL
The Company may offer receipts ("Depository Receipts") for Depository
Shares, each of which will represent a fractional interest in a share of a
particular series of a class of Preferred Stock, as specified in the
applicable Prospectus Supplement. Preferred Stock of each series of each class
represented by Depository Shares will be deposited under a separate Deposit
Agreement (each, a "Deposit Agreement") among the Company, the depository
named therein (such depository or its successor, the "Preferred Stock
Depository") and the holders from time to time of the Depository Receipts.
Subject to the terms of the Deposit Agreement, each owner of a Depository
Receipt will be entitled, in proportion to the fractional interest of a share
of the particular series of a Depository Receipt, to all the rights and
preferences of the Preferred Stock represented by such Depository Shares
(including dividend, voting, conversion, redemption and liquidation rights).
The Depository Shares will be evidenced by Depository Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the
issuance and delivery of the Preferred Stock by the Company to the Preferred
Stock Depository, the Company will cause the Preferred Stock Depository to
issue, on behalf of the Company, the Depository Receipts. Copies of the
applicable form of Deposit Agreement and Depository Receipt may be obtained
from the Company upon request.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depository will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock to the record
holders of the Depository Receipts evidencing the related Depository Shares in
proportion to the number of such Depository Receipts owned by such holder,
subject to certain obligations of holders to file proofs, certificates and
other information and to pay certain charges and expenses to the Preferred
Stock Depository.
In the event of a distribution other than in cash, the Preferred Stock
Depository will distribute property received by it to the record holders of
Depository Receipts entitled thereto, subject to certain obligations of
holders to file proofs, certificates and other information and to pay certain
charges and expenses to the Preferred Stock Depository, unless the Preferred
Stock Depository determines that it is not feasible to make such distribution,
in which case the Preferred Stock Depository may, with the approval of the
Company, sell such property and distribute the net proceeds from such sale to
such holders.
WITHDRAWAL OF SHARES
Upon surrender of the Depository Receipts at the corporate trust office of
the Preferred Stock Depository (unless the related Depository Shares have
previously been called for redemption), the holders thereof will be entitled
to delivery at such office, to or upon such holder's order, or the number of
whole shares of Preferred Stock and any money or other property represented by
the Depository Shares evidenced by such Depository Receipts. Holders of
Depository Receipts will be entitled to receive whole shares of the related
Preferred Stock on the basis of the proportion of Preferred Stock represented
by each Depository Share as specified in the applicable Prospectus Supplement,
but holders of such Preferred Stock will not thereafter be entitled to receive
Depository Shares therefor. If the Depository Receipts delivered by the holder
evidence a number of Depository Shares in excess of the number of Depository
Shares representing the number of shares of Preferred Stock to be withdrawn,
the Preferred Stock Depository will deliver to such holder at the same time a
new Depository Receipt evidencing such excess number of Depository Shares.
REDEMPTION OF DEPOSITORY SHARES
Whenever the Company redeems Preferred Stock held by the Preferred Stock
Depository, the Preferred Stock Depository will redeem as of the same
redemption date the number of Depository Shares representing the Preferred
Stock so redeemed, provided the Company shall have paid in full to the
Preferred Stock Depository
19
<PAGE>
the redemption price of the Preferred Stock to be redeemed plus an amount
equal to any accrued and unpaid dividends (except, with respect to
noncumulative shares of Preferred Stock, dividends for the current dividend
period only) thereon to the date fixed for redemption. The redemption price
per Depository Share will be equal to the redemption price and any other
amounts per share payable with respect to the Preferred Stock. If less than
all the Depository Shares are to be redeemed, the Depository Shares to be
redeemed will be selected by the Preferred Stock Depository by lot.
After the date fixed for redemption, the Depository Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depository Receipts evidencing the Depository Shares so called
for redemption will cease, except the right to receive any moneys payable upon
such redemption and any money or other property to which the holders of such
Depository Receipts were entitled upon such redemption upon surrender thereof
to the Preferred Stock Depository.
VOTING OF THE UNDERLYING PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depository will mail the
information contained in such notice of meeting to the record holders of the
Depository Receipts evidencing the Depository Shares which represent such
Preferred Stock. Each record holder of Depository Receipts evidencing
Depository Shares on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the
Preferred Stock Depository as to the exercise of the voting rights pertaining
to the amount of Preferred Stock represented by such holder's Depository
Shares. The Preferred Stock Depository will vote the amount of Preferred Stock
represented by such Depository Shares in accordance with such instructions,
and the Company will agree to take all reasonable action which may be deemed
necessary by the Preferred Stock Depository in order to enable the Preferred
Stock Depository to do so. The Preferred Stock Depository will abstain from
voting the amount of Preferred Stock represented by such Depository Shares to
the extent it does not receive specific instructions from the holders of
Depository Receipts evidencing such Depository Shares.
LIQUIDATION PREFERENCE
In the event of liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, each holder of a Depository Receipt will be
entitled to the fraction of the liquidation preference accorded each share of
Preferred Stock represented by the Depository Share evidenced by such
Depository Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION OF THE UNDERLYING PREFERRED STOCK
The Depository Shares, as such, are not convertible into Common Stock or any
securities or property of the Company. Nevertheless, if so specified in the
applicable Prospectus Supplement relating to an offering of Depository Shares,
the Depository Receipts may be surrendered by holders thereof to the Preferred
Stock Depository with written instructions to the Preferred Stock Depository
to instruct the Company to cause conversion of the Preferred Stock represented
by the Depository Shares evidenced by such Depository Receipts into whole
shares of Common Stock, other Preferred Stock of the Company or other shares
of capital Stock, and the Company has agreed that upon receipt of such
instructions and any amounts payable in respect thereof, it will cause the
conversion thereof utilizing the same procedures as those provided for
delivery of Preferred Stock to effect such conversion. If the Depository
Shares evidenced by a Depository Receipt are to be converted in part only, one
or more new Depository Receipts will be issued for any Depository Shares not
to be converted. No fractional shares of Common Stock will be issued upon
conversion, and if such conversion will result in a fractional share being
issued, an amount will be paid in cash by the Company equal to the value of
the fractional interest based upon the closing price of the Common Stock on
the last business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depository Receipt evidencing the Depository Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may
at any time be amended by agreement between the Company and
20
<PAGE>
the Preferred Stock Depository. However, any amendment that materially and
adversely alters the rights of the holders of Depository Receipts will not be
effective unless such amendment has been approved by the existing holders of
at least a majority of the Depository Shares evidenced by the Depository
Receipts then outstanding.
The Deposit Agreement may be terminated by the Company upon not less than 30
days' prior written notice to the Preferred Stock Depository if a majority of
each class of Depository Shares affected by such termination consents to such
termination, whereupon the Preferred Stock Depository shall deliver or make
available to each holder of Depository Receipts, upon surrender of the shares
of Preferred Stock as are represented by the Depository Shares evidenced by
such Depository Receipts. In addition, the Deposit Agreement will
automatically terminate if (i) all outstanding Depository Shares shall have
been redeemed, (ii) there shall have been a final distribution in respect of
the related Preferred Stock in connection with any liquidation, dissolution or
winding up of the Company and such distribution shall have been distributed to
the holders of Depository Receipts evidencing the Depository Shares
representing such Preferred Stock or (iii) each related share of Preferred
Stock shall have been converted into capital stock of the Company not so
represented by Depository Shares.
CHARGES OF PREFERRED STOCK DEPOSITORY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Company will pay the fees and expenses of the Preferred Stock Depository in
connection with the performance of its duties under the Deposit Agreement.
However, holders of the Depository Receipts will pay the fees and expenses of
the Preferred Stock Depository for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF PREFERRED STOCK DEPOSITORY
The Preferred Stock Depository may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time
remove the Preferred Stock Depository, any such resignation or removal to take
effect upon the appointment of a successor Preferred Stock Depository. A
successor Preferred Stock Depository must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depository will forward to holders of Depository
Receipts any reports and communications from the Company that are received by
the Preferred Stock Depository with respect to the related Preferred Stock.
Neither the Preferred Stock Depository nor the Company will be liable if it
is prevented from or delayed in, by law or any circumstances beyond its
control, performing its obligations under the Deposit Agreement. The
obligations of the Company and the Preferred Stock Depository under the
Deposit Agreement will be limited to performing their duties thereunder in
good faith and without gross negligence or willful misconduct, and the Company
and the Preferred Stock Depository will not be obligated to prosecute or
defend any legal proceeding in respect of any Depository Receipts, Depository
Shares or the Preferred Stock represented thereby unless satisfactory
indemnity is furnished. The Company and the Preferred Stock Depository may
rely on written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock represented thereby for deposit, holders of
Depository Receipts or other persons believed to be competent to give such
information, and on documents believed to be genuine and signed by a proper
party.
If the Preferred Stock Depository shall receive conflicting claims, requests
or instructions from any holders of Depository Receipts, on the one hand, and
the Company, on the other hand, the Preferred Stock Depository shall be
entitled to act on such claims, requests or instructions received from the
Company.
21
<PAGE>
DESCRIPTION OF COMMON STOCK
The Company's Articles of Incorporation authorize an aggregate of 30,000,000
shares of Common Stock. Except as described below with respect to certain
significant shareholders, holders of Common Stock are entitled to one vote for
each share on all matters on which shareholders are entitled to vote,
including election of directors. The Articles do not provide for cumulative
voting or preemptive, subscription, redemption or conversion rights.
Dividends may be paid to shareholders when, as and if declared by the Board
of Directors out of funds legally available for such purpose. The declaration
and payment of dividends is restricted under the terms of the Company's
guarantees of certain indebtedness of its subsidiaries.
In the event of the dissolution or winding up of the Company, after payment
or provision for payment of debts and other liabilities of the Company, the
holders of Common Stock will be entitled to receive pro rata all remaining
assets of the Company.
Under the provisions of Article XII of the Articles of Incorporation, a
holder of 15% or more of the Common Stock may not vote such shares in favor of
certain transactions, e.g. merger, consolidation, plan of exchange or sale of
substantially all of the Company's assets, with such shareholder or any party
related to such shareholder for a period of three years following acquisition
of the Common Stock without the approval of the Board of Directors and two-
thirds of the other shareholders. This provision does not apply if such
shareholder acquires at least 85% of the Common Stock in the same transaction
resulting in such shareholder acquiring 15%, or if such transaction is
approved by the Board of Directors prior to such shareholder's acquisition of
15% of the Common Stock.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue, together with other Securities or separately,
warrants for the purchase of (i) Debt Securities ("Debt Warrants"), (ii)
Preferred Stock (the "Preferred Stock Warrants") or (iii) Common Stock
("Common Stock Warrants"). The Preferred Stock Warrants and the Common Stock
Warrants are collectively referred to as the "Stock Warrants" and the Stock
Warrants and the Debt Warrants are collectively referred to as the
"Warrants").
The Warrants will be issued under Warrant Agreements (as defined below) to
be entered into between the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to any or all Warrants in respect of which this Prospectus
is being delivered. Copies of the form of agreement for each Warrant (each a
"Debt Securities Warrant Agreement" or "Stock Warrant Agreement," as the case
may be, or collectively the "Warrant Agreements"), including the forms of
certificates representing the Warrants ("Debt Warrant Certificates" or "Stock
Warrant Certificates," as the case may be, or collectively, the "Warrant
Certificates") reflecting the provisions to be included in such agreements
that will be entered into with respect to the particular offerings of each
type of warrant are, or will be, filed as exhibits to the Registration
Statement of which this Prospectus forms a part.
The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular
terms of the Warrants to which any Prospectus Supplement may relate and the
extent, if any, to which such general provisions may apply to the Warrants so
offered will be described in the applicable Prospectus Supplement. The
following summary of certain provisions of the Warrants, Warrant Agreements
and Warrant Certificates does not purport to be complete and is subject to,
and is qualified in its entirety by express reference to, all the provisions
of the Warrant Agreements and Warrant Certificates, including the definitions
therein of certain terms.
22
<PAGE>
DEBT WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Securities Warrant Agreement relating to such Debt Warrants and the
Debt Warrant Certificates representing such Debt Warrants, including the
following: (i) the designation, aggregate principal amount and terms of the
Debt Securities purchasable upon exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants; (ii)
the designation and terms of any related Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
Debt Security; (iii) the date, if any, on and after which such Debt Warrants
and the related Debt Securities will be separately transferable; (iv) the
principal amount of Debt Securities purchasable upon exercise of each Debt
Warrant and the price at which such principal amount of Debt Securities may be
purchased upon such exercise; (v) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire;
(vi) a discussion of the material United States Federal income tax
considerations applicable to the ownership or exercise of Debt Warrants; (vii)
whether the Debt Warrants represented by the Debt Warrant Certificates will be
issued in registered or bearer form, and, if registered, where they may be
transferred and registered; (viii) call provisions of such Debt Warrants, if
any; and (ix) any other terms of the Debt Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders
of the Debt Securities purchasable upon such exercise and will not be entitled
to payments of principal of (and premium, if any) or interest, if any, on the
Debt Securities purchasable upon such exercise.
Exercise of Debt Warrants. Each Debt Warrant will entitle the holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth
in, the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Debt Warrants may be exercised at any time up to 5:00 p.m., New York
City time, on the expiration date set forth in the applicable Prospectus
Supplement. After 5:00 p.m., New York City time, on the expiration date,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
forward the Debt Securities purchasable upon such exercise. If less than all
of the Debt Warrants represented by such Debt Warrant Certificate are
exercised, a new Debt Warrant Certificate will be issued for the remaining
amount of Debt Warrants.
STOCK WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Stock Warrants in respect of which this Prospectus is being
delivered, the Stock Warrant Agreement relating to such Stock Warrants and the
Stock Warrant Certificates representing such Stock Warrants, including the
following: (i) the type and number of shares of Preferred Stock or Common
Stock purchasable upon exercise of such Stock Warrants and the procedures and
conditions relating to the exercise of such Stock Warrants; (ii) the date, if
any, on and after which such Stock Warrants and the related shares of
Preferred Stock or Common Stock will be separately tradeable; (iii) the
offering price of such Stock Warrants, if any; (iv) the initial price at which
such shares may be purchased upon exercise of Stock Warrants and any provision
with respect to the adjustment thereof; (v) the date on which the right to
exercise such Stock Warrants shall commence and the date on which such right
shall expire; (vi) a discussion of the material United States Federal income
tax considerations applicable to the ownership or exercise of Stock Warrants;
(vii) call provisions of such Stock Warrants, if any; (viii) any other terms
of the Stock Warrants and; (ix) in the case of Preferred Stock Warrants,
information relating to the Preferred Stock purchasable upon exercise of such
Preferred Stock Warrants.
23
<PAGE>
Stock Warrant Certificates will be exchangeable for new Stock Warrant
Certificates of different denominations and Stock Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Stock
Warrants, holders of Stock Warrants will not have any of the rights of holders
of shares of capital stock purchasable upon such exercise, and will not be
entitled to any dividend payments on such capital stock purchasable upon such
exercise.
Exercise of Stock Warrants. Each Stock Warrant will entitle the holder to
purchase for cash such number of shares of Preferred Stock or Common Stock, as
the case may be, at such exercise price as shall in each case be set forth in,
or be determinable as set forth in, the applicable Prospectus Supplement
relating to the Stock Warrants offered thereby. Unless otherwise specified in
the applicable Prospectus Supplement, Stock Warrants may be exercised at any
time up to 5:00 p.m., New York City time, on the expiration date set forth in
the applicable Prospectus Supplement. After 5:00 p.m., New York City time, on
the expiration date, unexercised Stock Warrants will become void.
Stock Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating thereto. Upon receipt of payment and the Stock Warrant
Certificates properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, forward a
certificate representing the number of shares of capital stock purchasable
upon such exercise. If less than all of the Stock Warrants represented by such
Stock Warrant Certificate are exercised, a new Stock Warrant Certificate will
be issued for the remaining amount of Stock Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in
the offer and sale of the Securities will be named in an applicable Prospectus
Supplement. Securities offered pursuant to a particular Prospectus Supplement
are referred to herein as "Offered Securities."
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as its agents to offer and sell the Offered Securities
upon the terms and conditions set forth in the applicable Prospectus
Supplement. In connection with the sale of Offered Securities, underwriters
may be deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Offered Securities for whom they may act as agent. Underwriters
may sell Offered Securities to or through dealers, and such dealers may
receive compensation in the form of discounts and commissions or concessions
from the underwriters and/or commissions (which may be changed from time to
time) from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities, and any discounts and
commissions or concessions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of the Offered Securities
may be deemed to be underwriters under the Securities Act, and any discounts
and commissions received by them and any profit realized by them on resale of
the Offered Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and agents may be
entitled, under agreements with the Company, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Company for certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
24
<PAGE>
If so indicated in an applicable Prospectus Supplement, the Company will
authorize dealers acting as its agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each Contract will be for
an amount not less than, and the aggregate principal amount of Offered
Securities sold pursuant to Contracts shall not be less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with
whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational
and charitable institutions and other institutions, but will in all cases be
subject to the approval of the Company. The terms and conditions of any
Contracts will be set forth in the applicable Prospectus Supplement relating
thereto. Agents and underwriters will have no responsibility in respect of the
delivery or performance of Contracts.
LEGAL MATTERS
The validity of the issuance of the Securities offered hereby will be passed
upon for the Company by Rothgerber, Appel, Powers & Johnson LLP, Denver,
Colorado.
EXPERTS
The consolidated financial statements and related financial statement
schedules incorporated in this Prospectus by reference from the Company's
Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
25
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SO-
LICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY OR THEREBY
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHO-
RIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO DO SO, OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEI-
THER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS
NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT THERETO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$150,000,000
[LOGO OF MAIL-WELL, INC. APPEARS HERE]
MAIL-WELL, INC.
% Convertible Subordinated Notes due 2002
----------------------------------
PROSPECTUS SUPPLEMENT
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Prospectus Supplement Summary.............................................. S-3
Risk Factors............................................................... S-7
Use of Proceeds............................................................ S-9
Price Range of Common Stock................................................ S-9
Dividend Policy............................................................ S-9
Capitalization............................................................. S-10
Selected Financial Data.................................................... S-11
Management................................................................. S-12
Description of Notes....................................................... S-14
Certain United States Federal Income Tax Considerations.................... S-26
Shares Eligible for Future Sales........................................... S-28
Underwriting............................................................... S-29
Legal Matters.............................................................. S-30
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Recent Developments........................................................ 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 8
Ratio of Earnings to Fixed Charges......................................... 8
Description of Debt Securities............................................. 9
Description of Preferred Stock............................................. 16
Description of Depository Shares........................................... 19
Description of Common Stock................................................ 22
Description of Warrants.................................................... 22
Plan of Distribution....................................................... 24
Legal Matters.............................................................. 25
Experts.................................................................... 25
</TABLE>
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PRUDENTIAL SECURITIES INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HANIFEN, IMHOFF, INC.
November , 1997
- --------------------------------------------------------------------------------
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<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses of the offering (except for SEC registration fees),
all of which are to be borne by the Registrant, are as follows:
<TABLE>
<S> <C>
Printing Expenses............................................... $ 70,000
Accounting Fees and Expenses.................................... 45,000
Legal Fees and Expense.......................................... 50,000
SEC Registration Fee............................................ 90,910
Blue Sky Fees................................................... 5,000
Miscellaneous................................................... 5,000
--------
TOTAL......................................................... $265,910
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 7-109-101 et seq. of the Colorado Business Corporation Act ("CBCA")
empowers a Colorado corporation to indemnify its directors, officers,
employees and agents under certain circumstance, as well as providing for the
elimination of personal liability of directors and officers of a Colorado
corporation for monetary damages.
Article V of the Articles of Incorporation of the Registrant reads as
follows:
"The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person, and the estate and
personal representative of any such person, against all liability and expense
(including attorneys' fees) incurred by reason of the fact that he or she is
or was a director or officer of the Corporation or, while serving as a
director or officer of the Corporation, he or she is or was serving at the
request of the Corporation as a director, officer, partner, trustee, employee,
fiduciary, or agent of, or in any similar managerial or fiduciary position of,
another domestic or foreign Corporation or other individual or entity or of an
employee benefit plan. The Corporation shall also indemnify any person who is
serving or has served the Corporation as director, officer, employee,
fiduciary, or agent, and that person's estate and personal representative, to
the extent and in the manner provided in any bylaw, resolution of the
shareholders or directors, contract, or otherwise, so long as such provision
is legally permissible."
Article VI of the Articles of Incorporation of the Registrant reads as
follows:
"There shall be no personal liability of a director to the Corporation or to
its shareholders for monetary damages for breach of fiduciary duty as a
director, except that said personal liability shall not be eliminated to the
Corporation or to the shareholders for monetary damages arising due to any
breach of the director's duty of loyalty to the Corporation or to the
shareholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts specified in section 7-108-403,
C.R.S., or any transaction from which a director derived an improper personal
benefit. Notwithstanding any other provisions herein, personal liability of a
director shall be eliminated to the greatest extent possible as is now, or in
the future, provided for by law. Any repeal or modification of the foregoing
sentence shall not adversely affect any right or protection of a director of
the Corporation existing hereunder with respect to any act or omission
occurring prior to such repeal or modification."
The Company has entered into Indemnity Agreements with its directors and
certain key officers pursuant to which the Company generally is obligated to
indemnify its directors and such officers to the full extent permitted by the
CBCA as described above.
The Company has purchased liability insurance policies covering directors
and officers in certain circumstances.
II-1
<PAGE>
ITEM 16. EXHIBITS
The following Exhibits are filed as a part of this Registration Statement
pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS
- ----------- --------
<S> <C>
*1.1 Form of Underwriting Agreement for Equity Securities
*1.2 Form of Underwriting Agreement for Debt Securities
*4.1 Form of Senior Subordinated Debt Securities Indenture
*4.2 Form of Subordinated Debt Securities Indenture
4.3 Form of Certificate representing the Common Stock, par value $0.01 per share, of the Company--
incorporated by reference from exhibit 4.1 to the Company's Amendment No. 1 to Form S-3 filed
on October 29, 1997 (Reg. No. 333-35561)
4.4 The Company's Articles of Incorporation--incorporated by reference from exhibit 3(i) of the
Company's Form 10-Q for the quarter ended June 30, 1997
*4.5 Form of Indenture Supplement relating to Convertible Subordinated Notes
**5.1 Legal Opinion of Rothgerber, Appel, Powers & Johnson LLP
**23.1 Consent of Rothgerber, Appel, Powers & Johnson LLP
23.2 Consent of Deloitte & Touche LLP
**24.1 Power of Attorney
***25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of the trustee under
the Senior Subordinated Debt Securities Indenture.
***25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of the trustee under
the Subordinated Debt Securities Indenture.
</TABLE>
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* To be filed by amendment prior to effectiveness or incorporated by
reference from a Current Report on Form 8-K prior to the offering of the
securities represented thereby.
** Filed Previously
*** To be filed with the Commission on Form T-1 within two business days
following the offering of the debt securities represented thereby,
pursuant to Rule 5b-3 promulgated under the Trust Indenture Act of 1939,
as amended.
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 purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
II-2
<PAGE>
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
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 registrant 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 registrant 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 Act
and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities Act
of 1933, each 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.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)(2)
of the Trust Indenture Act.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
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 AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF ENGLEWOOD, STATE OF COLORADO, ON
NOVEMBER 7, 1997.
Mail-Well, Inc.
/s/ *
By: _________________________________
Roger Wertheimer, as attorney-in-
fact for
Gerald F. Mahoney, Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
POWER OF ATTORNEY
SIGNATURE TITLE DATE
/s/ *
- ------------------------------------- Chairman of the November 7, 1997
Roger Wertheimer, as attorney-in- Board/ Chief
fact for Gerald F. Mahoney Executive
Officer/Director
/s/ *
- ------------------------------------- President and COO November 7, 1997
Roger Wertheimer, as attorney-in- American Mail-Well
fact for Robert J. Terry Envelope/ Director
/s/ *
- ------------------------------------- Vice President/ November 7, 1997
Roger Wertheimer, as attorney-in- Chief Financial
fact for Paul V. Reilly Officer
/s/ *
- ------------------------------------- Director November 7, 1997
Roger Wertheimer, as attorney-in-
fact for Frank J. Hevrdejs
/s/ *
- ------------------------------------- Director November 7, 1997
Roger Wertheimer, as attorney-in-
fact for Frank P. Diassi
/s/ *
- ------------------------------------- Director November 7, 1997
Roger Wertheimer, as attorney-in-
fact for J. Bruce Duty
/s/ Director November 7, 1997
- -------------------------------------
Roger Wertheimer, as attorney-in-
fact for Jerome W. Pickholz
/s/ Director November 7, 1997
- -------------------------------------
Roger Wertheimer, as attorney-in-
fact for W. Thomas Stevens
*By: /s/ Roger Wertheimer
Roger Wertheimer
Attorney-in-fact
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS
----------- --------
<C> <S>
*1.1 Form of Underwriting Agreement for Equity Securities
1.2 Form of Underwriting Agreement for Convertible Subordinated Notes
*4.1 Form of Senior Subordinated Debt Securities Indenture
4.2 Form of Indenture for the Convertible Subordinated Notes
**4.3 Form of Certificate representing the Common Stock, par value $0.01
per share, of the Company--incorporated by reference from exhibit
4.1 to the Company's Amendment No. 1 to Form S-3 filed on October
29, 1997 (Reg. No. 333-35561)
**4.4 The Company's Articles of Incorporation--incorporated by reference
from exhibit 3(i) of the Company's Form 10-Q for the quarter ended
June 30, 1997
4.5 Form of Indenture Supplement relating to the Convertible
Subordinated Notes and form of Convertible Note (Exhibit A
thereto)
5.1 Legal Opinion of Rothgerber, Appel, Powers & Johnson LLP
23.1 Consent of Rothgerber, Appel, Powers & Johnson LLP (contained in
Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
**24.1 Power of Attorney
***25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the trustee under the Senior Subordinated Debt
Securities Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of the trustee under the Indenture for the
Convertible Subordinated Notes.
</TABLE>
- --------
* To be filed by amendment prior to effectiveness or incorporated by
reference from a Current Report on Form 8-K prior to the offering of the
securities represented thereby.
** Filed Previously
*** To be filed with the Commission on Form T-1 within two business days
following the offering of the debt securities represented thereby, pursuant
to Rule 5b-3 promulgated under the Trust Indenture Act of 1939, as amended.
II-5
<PAGE>
EXHIBIT 1.2
MAIL-WELL, INC.
$150,000,000
_____% CONVERTIBLE SUBORDINATED NOTES DUE 2002
UNDERWRITING AGREEMENT
----------------------
November ___, 1997
PRUDENTIAL SECURITIES INCORPORATED
BEAR STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HANIFEN, IMHOFF INC.
As Representatives of the Underwriters named in Schedule 2 hereto
Dear Sirs:
Mail-Well, Inc., a Colorado corporation (the "Company"), hereby confirms
its agreement with the several underwriters named in Schedule 2 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
Representatives (in such capacities, the "Representatives"), as set forth below.
If you are the only Underwriters, all references herein to the Representatives
shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
----------
Company proposes to issue and sell to the several Underwriters $150,000,000
principal amount of its ____% Convertible Subordinated Notes due 2002 (the
"Notes") to be issued pursuant to an Indenture to be dated as of November
, 1997 and as amended by an Indenture Supplement executed as of the same date
(collectively, the "Indenture") between the Company and _______ as trustee (the
"Trustee"), as specified in Schedule 2 hereto (the "Firm Securities"). The
Notes are convertible, at any time after 60 days following the date of original
issuance thereof and prior to the close of business on the maturity date of the
principal of the Notes, into shares of common stock, $0.01 par value of the
Company (the "Common Stock"). The Company also proposes to issue and sell to
the several Underwriters not more than $22,500,000 principal amount of
additional Notes if requested by the Underwriters as provided in Section 3 of
this Agreement. Any and all Notes purchased by the Underwriters pursuant to
such option are referred to herein as the "Option Securities" and the Firm
Securities and the Option Securities are referred to herein as the "Securities".
2. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to, and agrees with, each of the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on
such Form (File No. 333-36337) with respect to the Securities, including a basic
prospectus subject to completion, has been filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Act, and one or
more amendments to such registration statement may have been so filed. Such
registration statement, as so amended, has been declared by the Commission to be
effective under the Act. Such registration statement, as amended at the date of
this Agreement as specified in
<PAGE>
Schedule 1 hereto, meets the requirements set forth in Rule 415(a)(1)(x) under
the Act and complies in all other material respects with said Rule. The Company
will next file with the Commission either (A) if the Company relies on Rule 434
under the Act, a Term Sheet (as hereinafter defined) relating to the Securities,
that shall identify the Preliminary Prospectus (as hereinafter defined) that it
supplements and, if required to be filed pursuant to Rules 434(c)(2) and 424(b),
an Integrated Prospectus (as hereinafter defined), in either case, containing
such information as is required or permitted by Rule 434 and 424(b) under the
Act or (B) if the Company does not rely on Rule 434 under the Act, pursuant to
Rule 424(b) under the Act a final prospectus supplement to the basic prospectus
included in such registration statement, as so amended, describing the
Securities and the offering thereof, and in the case of clause (A) or (B) of
this sentence as have been provided to, or discussed with, and approved by the
Representatives as provided in Section 4(a) of this Agreement. The Company may
also file a related registration statement with the Commission pursuant to Rule
462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was declared effective, including (A)
all financial schedules and exhibits thereto, (B) all documents incorporated by
reference therein filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and (C) any information omitted therefrom and required to
be filed pursuant to Rule 434(c)(2) and 424(b), in the Integrated Prospectus;
the term "Rule 462(b) Registration Statement" means any registration statement
filed with the Commission pursuant to Rule 462(b) under the Act (including the
Registration Statement and any Preliminary Prospectus or Prospectus incorporated
therein at the time such Registration Statement becomes effective); the term
"Registration Statement" includes both the Original Registration Statement and
any Rule 462(b) Registration Statement; the term "Basic Prospectus" means the
prospectus included in the Registration Statement; the term "Preliminary
Prospectus" means each preliminary prospectus supplement specifically relating
to the Securities and previously filed pursuant to Rule 424 (b), including all
documents incorporated by reference therein filed under the Exchange Act; the
term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term
Sheet relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements; or
(B) if the Company does not rely on Rule 434 under the Act, the
Basic Prospectus as supplemented by the final prospectus supplement
relating to the Securities as first filed with the Commission pursuant
to Rule 424(b) under the Act, including, in the case of clauses (A) or
(B) of this sentence, all documents incorporated by reference therein
filed under the Exchange Act;
and the term "Prospectus Supplement" means such final prospectus supplement.
The term "Integrated Prospectus" means a prospectus first filed with the
Commission pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term
"Term Sheet" means any abbreviated term sheet that satisfies the requirements of
Rule 434 under the Act. Any reference in this Agreement to an "amendment" or
"supplement" to any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or an "amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange Act after
the date of such Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be; any reference herein to the "date"
of a Prospectus that includes a Term Sheet shall mean the date of such Term
Sheet. For purposes of the preceding sentence, any reference to the "effective
date" of an amendment to a
2
<PAGE>
registration statement shall, if such amendment is effected by means of the
filing with the Commission under the Exchange Act of a document incorporated by
reference in such registration statement, be deemed to refer to the date on
which such document was so filed with the Commission.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus and any
amendment or supplement thereto was filed with the Commission, it (i) contained
all statements required to be stated therein in accordance with, and complied in
all material respects with the requirements of, the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder, and (ii) did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement was declared effective or when any amendment was or is
made thereto, it (i) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act, the Exchange Act and the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission pursuant
to Rule 424(b), on the date when the Prospectus is otherwise amended or
supplemented and on the Firm Closing Date and any Option Closing Date (both as
hereinafter defined), each of the Prospectus, and, if required to be filed
pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated Prospectus
as amended or supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (b) do not
apply to statements or omissions made in any Preliminary Prospectus or any
amendment or supplement thereto, the Registration Statement or any amendment
thereto or the Prospectus or, if required to be filed pursuant to Rules
434(c)(2) and 424(b) under the Act, the Integrated Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Registration Statement has not been declared effective, (i) the Company has
filed a Rule 462(b) Registration Statement in compliance with, and that is
effective upon filing pursuant to, Rule 462(b) and has received confirmation of
its receipt, and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act or the Commission has received payment of such filing fee.
(d) The Company and each of its subsidiaries have been duly organized and
are validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to transact
business as foreign corporations and are in good standing under the laws of all
other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its subsidiaries, taken as a
whole.
3
<PAGE>
(e) The Company and each of its subsidiaries have full power (corporate and
other) to own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and each of the Prospectus
and any Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus; and the
Company has full power (corporate and other) to enter into this Agreement and to
carry out all the terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares and as otherwise set
forth in each of the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) are owned beneficially by the Company free and
clear of any security interests, liens, encumbrances, equities or claims.
(g) The Company has an authorized, issued and outstanding capitalization as
set forth in each of the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus). All of the issued shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable.
(h) The capital stock of the Company conforms to the description thereof
contained in the Prospectus, each of the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus.
(i) The Firm Securities and the Option Securities have been duly authorized
by the Company and when duly executed by the Company and authenticated by the
Trustee and issued, delivered and sold by the Company to you in accordance with
this Agreement and the Indenture, will have been duly and validly executed,
authenticated, issued and delivered and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms except as enforcement thereof may be limited by the effect of any
applicable bankruptcy, insolvency, including, without limitation, all laws
relating to fraudulent transfer, reorganization, receivership, moratorium or
other similar laws affecting the rights and remedies of creditors generally and
to general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); and the Securities are entitled to the
benefits provided by the Indenture.
(j) The Common Stock to be issued upon conversion of the Securities has
been duly authorized and reserved for issuance upon such conversion and, when
issued and delivered upon conversion of the Securities in accordance with the
terms thereof and the Indenture, will be validly issued, fully paid and non-
assessable; the Common Stock conforms to the description thereof contained in
the Prospectus.
(k) The Indenture has been duly authorized and when executed and delivered
by the Company will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar laws
affecting the rights and remedies of creditors generally and to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
4
<PAGE>
(l) Except as disclosed in each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), there are not outstanding
(A) securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such subsidiary, (B) warrants, rights or options to subscribe for or purchase
from the Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations of the
Company or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options.
(m) The consolidated financial statements and schedules of the Company and
its consolidated subsidiaries included in the Registration Statement and each of
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) fairly present the financial position of the Company and its
consolidated subsidiaries and the results of operations and changes in financial
condition as of the dates and periods therein specified. Such financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The selected financial data set
forth under the caption "Selected Financial Information" if included in each of
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) and in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 19__, fairly present, on the basis stated in each of the
Prospectus and any Integrated Prospectus (or such Preliminary Prospectus) and
such Annual Report, the information included therein.
(n) Deloitte & Touche LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included
in the Registration Statement or each the Prospectus and Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus), are independent public
accountants as required by the Act and the Exchange Act and the related
published rules and regulations thereunder.
(o) The execution and delivery of this Agreement have been duly authorized
by the Company and this Agreement has been duly executed and delivered by the
Company and is the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(p) No legal or governmental proceedings are pending to which the Company
or any of its subsidiaries is a party or to which the property of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or each of the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus) and that are not described
therein, and no such proceedings have been threatened against the Company or any
of its subsidiaries or with respect to any of their respective properties; and
no contract or other document is required to be described in the Registration
Statement or the Prospectus or any Integrated Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) or filed as required.
5
<PAGE>
(q) The issuance, offering and sale of the Securities to the Underwriters
by the Company pursuant to this Agreement, the execution, delivery and
performance by the Company of its obligations under this Agreement and the
Indenture, and the consummation of the other transactions herein and therein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except such
as have been obtained, such as may be required under state securities or blue
sky laws or (ii) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the charter
documents or by-laws of the Company or any of its subsidiaries, or any statute
or any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or any of its
subsidiaries.
(r) Subsequent to the respective dates as of which information is given in
the Registration Statement or each of the Prospectus or any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), neither the Company nor
any of its subsidiaries has sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management, business
prospects, net worth, or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by each of the
Prospectus and any Integrated Prospectus or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus.
(s) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(t) The Company has not distributed and, prior to the later of (i) the Firm
Closing Date or the Option Closing Date (as the case may be) and (ii) the
completion of the distribution of the Securities, will not distribute any
offering material in connection with the offering and sale of the Securities
other than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or other
materials, if any permitted by the Act.
(u) Subsequent to the respective dates as of which information is given in
the Registration Statement or each of the Prospectus or any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), (1) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (2) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or contemplated
by
6
<PAGE>
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(v) The Company and each of its subsidiaries have good and marketable title
in fee simple to all items of real property and marketable title to all personal
property owned by each of them, in each case free and clear of any security
interests, liens, encumbrances, equities, claims and other defects, except such
as do not materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company or such subsidiary, and any real property and buildings held under lease
by the Company or any such subsidiary are held under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as described in
or contemplated by the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(w) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(x) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any Integrated Prospectus are
not in existence, the most recent Preliminary Prospectus).
(y) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, except as described in or contemplated by
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(z) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus and
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any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(aa) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus).
(bb) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and this transaction will not cause the Company to
become an investment company subject to registration under such Act.
(cc) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any Integrated Prospectus are
not in existence, the most recent Preliminary Prospectus).
(dd) Neither the Company nor any of its subsidiaries is in violation of any
federal or state law or regulation relating to occupational safety and health or
to the storage, handling or transportation of hazardous or toxic materials and
the Company and its subsidiaries have received all permits, licenses or other
approvals required of them under applicable federal and state occupational
safety and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in compliance
with all terms and conditions of any such permit, license or approval, except
any such violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ee) Any certificate signed by any officer of the Company and delivered to
the Representatives or to counsel for the Underwriters in connection with the
offering of the Securities shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters covered thereby.
(ff) Except for the shares of capital stock of each of the subsidiaries
owned by the Company and such subsidiaries, neither the Company nor any such
subsidiary owns any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm, partnership, association or
other entity, except as described in or contemplated by the Prospectus
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and any Integrated Prospectus (or, if the Prospectus and any Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(gg) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective properties is bound or may be affected in any
material adverse respect with regard to property, business or operations of the
Company and its subsidiaries.
(ii) Each of the Securities and any Designated Deposit Agreement conform to
the descriptions thereof contained in each of the Prospectus, and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus).
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
---------------------------------------------
the representations, warranties, agreements and covenants herein contained
(except as may be otherwise specified in Schedule 1) and subject to the terms
and conditions herein set forth and therein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of % of the principal amount thereof (which purchase price
represents (i) the price to investors of the Notes equal to 100% of the
principal amount thereof less (ii) discounts and commissions to the Underwriters
----
of % of the principal amount of the Notes), plus accrued interest, if
any, from November ___, 1997, the principal amount of Firm Securities set forth
opposite the name of such Initial Purchaser in Schedule 1 hereto. The Firm
Securities to be delivered shall be delivered by the Company in the form of
Global Securities to the Custodian on behalf of the Depositary. One or more
Global Receipts in respect of such Global Securities representing the Firm
Securities that the several Underwriters have agreed to purchase hereunder shall
be issued by the Depositary pursuant to the Custody Agreement and delivered on
behalf of the Company to the Depositary Trust Company ("DTC"), and registered in
the name of Cede & Co., as DTC's nominee, for the respective accounts of the
Underwriters, against payment by wire transfer on the Firm Closing Date to the
Company by or on behalf of the Underwriters of the purchase price therefor in
the United States Dollars in immediately available funds. Such delivery of and
payment for the Firm Securities shall be made at the date, time and place
identified in Schedule 1 hereto or at such other place, time or date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 8 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing Date". The Company will
make such certificate or certificates representing the Firm Securities available
for checking and packaging by the Representatives at the offices in New York,
New York of the Company's transfer agent or registrar at such other place as the
Representatives and the Company may agree at least 24 hours prior to the Firm
Closing Date.
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(b) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the Prospectus,
the Company hereby grants to the several Underwriters an option to purchase,
severally and not jointly, the Option Securities. The purchase price to be paid
for any Option Securities shall be the same price per share as the price per
share for the Firm Securities set forth above in paragraph (a) of this Section
3, plus accrued interest, if any, from November , 1997. The option
granted hereby may be exercised as to all or any part of the Option Securities
from time to time within thirty days after the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed in writing) to the Company setting forth the aggregate
principal amount of Option Securities as to which the several Underwriters are
then exercising the option and the date and time for delivery of and payment for
such Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters, and,
subject to the terms and conditions herein set forth, each of the Underwriters
(severally and not jointly) shall become obligated to purchase from the Company,
the same percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of the aggregate number of Firm Securities, as adjusted by
the Representatives in such manner as they deem advisable to avoid fractional
Shares. If the option is exercised as to all or any portion of the Option
Securities, one or more Notes in definitive form for such Option Securities, and
payment therefor, shall be delivered on the related Option Closing Date in the
manner, and upon the terms and conditions, set forth in paragraph (a) of this
Section 3, except that reference therein to the Firm Securities and the Firm
Closing Date shall be deemed, for purposes of this paragraph (b), to refer to
such Option Securities and Option Closing Date, respectively.
(c) The Company hereby acknowledges that the wire transfer by or on behalf
of the Underwriters of the purchase price for any Securities does not constitute
closing of a purchase and sale of the Securities. Only execution and delivery
of a receipt for Securities by the Underwriters indicates completion of the
closing of a purchase of the Securities from the Company. Furthermore, in the
event that the Underwriters wire funds to the Company prior to the completion of
the closing of a purchase of Securities, the Company hereby acknowledges that
until the Underwriters execute and deliver a receipt for the Securities, by
facsimile or otherwise, the Company will not be entitled to the wired funds and
shall return the wired funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Securities is not completed and the wire funds are not returned by
the Company to the Underwriters on the same day the wired funds were received by
the Company, the Company agrees to pay to the Underwriters in respect of each
day the wire funds are not returned by it, in same-day funds, interest on the
amount of such wire funds in an amount representing the Underwriters' cost of
financing as reasonably determined by the Representatives.
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(d) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
4. Covenants of the Company. The Company covenants and agrees with each
------------------------
of the Underwriters that:
(a) The Company will file the Prospectus, the Prospectus Supplement or any
Term Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period required by
Rule 434 and 424(b) under the Act. During any time when a prospectus relating
to the Securities is required to be delivered under the Act, the Company (i)
will comply with all requirements imposed upon it by the Act and the Exchange
Act and the respective rules and regulations of the Commission thereunder to the
extent necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and of each of the
Prospectus and any Integrated Prospectus, as then amended or supplemented, and
(ii) will not file with the Commission the prospectus or the amendment referred
to in the fifth sentence of Section 2(a) hereof, any amendment or supplement to
such prospectus or any amendment to the Registration Statement or any Rule
462(b) Registration Statement of which the Representatives shall not previously
have been advised and furnished with a copy for a reasonable period of time
prior to the proposed filing and as to which filing the Representatives shall
not have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the Underwriters,
any amendments to the Registration Statement or amendments or supplements to the
Prospectus and any Integrated Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by the several Underwriters,
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective by the Commission as promptly as possible.
The Company will advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any amendment thereto
has been filed or declared effective or the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any Rule 462(b) Registration Statement or any post-effective
amendment thereto or any order directed at any document incorporated by
reference in the Registration Statement or the Prospectus and any required
Integrated Prospectus or any amendment or supplement thereto or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
and any Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing any Preliminary Prospectus or the
Prospectus and any Integrated Prospectus or for additional information. The
Company will use its best efforts to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the withdrawal thereof as
promptly as possible.
(c) The Company will arrange for the qualification of the Securities and
the Common Stock for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be
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<PAGE>
necessary to complete the distribution of the Securities and the Common Stock,
provided, however, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement each of the Prospectus or any Integrated Prospectus to
comply with the Act or the Exchange Act or the respective rules or regulations
of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 4(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus or any
Integrated Prospectus that corrects such statement or omission or effects such
compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy of the registration statement
originally filed with respect to the Securities and each amendment thereto (in
each case including exhibits thereto) or any Rule 462(b) Registration Statement,
certified by the Secretary or an Assistant Secretary of the Company to be true
and complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus, the Prospectus, or any Integrated
Prospectus, or any amendment or supplement thereto, as the Representatives may
reasonably request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 6:00 PM, New York City time, on the
date of determination of the public offering price, if such determination
occurred at or prior to 10:00 AM, New York City time on such date or (B) 2:00
PM, New York City time, on the business day following the date of determination
of the public offering price, if such determination occurred after 10:00 AM, New
York City time, on such date, will deliver to the Underwriters, without charge,
as many copies of the Prospectus or any Integrated Prospectus and any amendment
or supplement thereto as the Representatives may reasonably request for purposes
of confirming orders that are expected to settle on the Firm Closing Date.
(f) During the period when the Prospectus or any Integrated Prospectus is
required by the Act to be delivered in connection with sales of the Securities,
the Company will file promptly all documents required to be filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(g) The Company, as soon as practicable, will make generally available to
its securityholders and to the Representatives a consolidated earnings statement
of the Company and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(h) The Company will apply the net proceeds from the sale of the Securities
as set forth under "Use of Proceeds" in the Prospectus or any Integrated
Prospectus; provided, further, that if the proceeds of the sale of the
Securities hereunder together with the sale of the proceeds of the Common Stock
Offering (as defined in the Prospectus) are insufficient to repay in full the
Credit
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<PAGE>
Facilities (as defined in the Prospectus), the Company shall have established a
bridge or other permanent replacement credit facility in order to repay the
Credit Facilities in full.
(i) For the period specified in Schedule 1, the Company will not, directly
or indirectly, without the prior written consent of the Representatives, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date hereof, except pursuant to
this Agreement and except for issuances pursuant to the exercise of employee
stock options outstanding on the date hereof or pursuant to the terms of
convertible securities of the Company outstanding on the date hereof.
Prudential Securities Incorporated may, in its sole discretion, at any time and
without notice, release all or any portion of the shares of Common Stock subject
to such lock-up agreements.
(j) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(k) The Company will obtain the agreements described in Section 6(f) hereof
prior to the Firm Closing Date.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to any Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Securities or the
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus and any Integrated Prospectus), the Company will,
after notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you concerning the substance of, and disseminate
a press release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(m) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated
under the Act by the earlier of (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(n) If and to the extent specified in Schedule 1, the Company will use its
best efforts to cause the Securities (and the Common Stock to be issued upon
conversion thereof) to be duly authorized for listing by the stock exchange or
exchanges specified in Schedule 1 and, if required, to be registered under the
Exchange Act, subject to your providing to the relevant stock exchange or
exchanges any required information as to the distribution of the Securities
meeting the standards of such stock exchange or exchanges.
5. Expenses. The Company will pay all costs and expenses incident to the
--------
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including
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all costs and expenses incident to (a) the printing or other production of
documents with respect to the transactions, including any costs of printing the
registration statement originally filed with respect to the Securities and any
amendment thereto, any Rule 462(b) Registration Statement, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus and any amendment or
supplement thereto, this Agreement, any Designated Deposit Agreement and any
blue sky memoranda, (b) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (c) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company, (d) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (e) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (f) the filing
fees of the Commission (and the National Association of Securities Dealers,
Inc.) relating to the Securities, (g) the fees and expenses, if any, of the
Depositary, including the fees and disbursements of counsel for the Depositary,
(h) the listing of the Securities on any stock exchange, (i) meetings with
prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the Underwriters)
and (j) advertising relating to the offering of the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 6 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 10 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. The Company shall not in
any event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
6. Conditions of the Underwriters' Obligations. Except as otherwise
-------------------------------------------
provided in Schedule 1, the obligations of the several Underwriters to purchase
and pay for the Firm Securities shall be subject, in the Representatives' sole
discretion, to the accuracy of the representations and warranties of the Company
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers made pursuant to the provisions hereof, to the
performance by the Company of its covenants and agreements hereunder and to the
following additional conditions:
(a) If the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any Integrated Prospectus and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period required
by Rule 434 and 424(b) under the Act; no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto shall have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be
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contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement, the Prospectus or any Integrated Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Rothgerber, Appel, Powers & Johnson LLP, counsel for the
Company, to the effect that:
(i) the Company and each of its subsidiaries (the "Subsidiaries")
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective properties
or the conduct of their respective businesses requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and the Subsidiaries, taken as a
whole;
(ii) the Company and each of the Subsidiaries have corporate power to
own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus or
any Integrated Prospectus, and the Company has corporate power to enter
into this Agreement and to carry out all the terms and provisions hereof
and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the Company and
the Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares and as
otherwise set forth in each of the Prospectus and any Integrated
Prospectus, and are owned beneficially by the Company free and clear of any
perfected security interests or, to the best knowledge of such counsel, any
other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus and any Integrated
Prospectus; all of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable federal
and state securities laws and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities; the Securities and the Common Stock to be issued upon
conversion of the Securities has been duly authorized for listing, subject
to official notice of issuance, on the New York Stock Exchange;
(v) assuming the Indenture has been duly authorized, executed and
delivered by the Issuer and the Trustee, the Indenture is a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms (subject to such qualifications as to
enforceability as such counsel shall reasonably request (the
"Enforceability Qualifications"); assuming the Securities have been duly
authorized, executed and delivered by the Company and assuming they have
been duly authenticated by the Trustee in accordance with the terms of the
Indenture, upon payment for and delivery of the Securities in accordance
with the Indenture and this Agreement, the Securities will constitute
legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms (subject to the Enforceability
Qualifications); and the Securities conform in all material respect to the
descriptions thereof contained in the Prospectus and any Integrated
Prospectus and are entitled to the benefits provided by the Indenture;
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(vi) the shares of Common Stock reserved for issuance upon
conversion of the Securities being delivered to the Depositary have been
duly authorized and, when issued and delivered in accordance with the terms
of the Indenture, will be validly issued, fully paid and nonassessable. All
corporate action required to be taken for the authorization, issuance and
delivery of such Common Stock has been validly taken. No holders of
outstanding shares of capital stock of the Company are entitled as such to
any preemptive or other rights to subscribe for any shares of Common Stock;
and no holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(vii) the statements set forth under the headings "Description of
Notes," "Description of Debt Securities," "Description of Preferred Stock,"
"Description of Depositary Shares," "Description of Common Stock," and
"Description of Warrants" in each of the Prospectus and any Integrated
Prospectus, insofar as such statements purport to summarize certain
provisions of the securities of the Company described therein, provide a
fair summary of such provisions; and the descriptions in each of the
Prospectus and any Integrated Prospectus, of such of the statutes,
regulations, legal or governmental proceedings, contracts and other
documents as have been included therein, insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, provide a fair summary of such legal matters,
documents and proceedings;
(viii) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(ix) each of the Securities and the Indenture conform in all
material respects as to legal matters to the descriptions thereof contained
in the Prospectus, and any Integrated Prospectus;
(x) no legal or governmental proceedings are pending to which the
Company or any of the Subsidiaries is a party or to which the property of
the Company or any of the Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and any
Integrated Prospectus and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been threatened against
the Company or any of the Subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement, the Prospectus and any Integrated
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(xi) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, or the execution,
delivery or performance by the Company of its obligations under this
Agreement and the Indenture and the consummation of the other transactions
herein contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be required
under state securities or blue sky laws, or (B) conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company or any
of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company
16
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or any of the Subsidiaries, or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company or any of
the Subsidiaries;
(xii) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, and any Integrated Prospectus pursuant to Rules 434 and
424(b) has been made in the manner and within the time period required by
Rules 434 and 424(b); and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement or the Prospectus and any Integrated Prospectus or any amendment
or supplement thereto has been issued, and no proceedings for that purpose
have been instituted or threatened or, to the best knowledge of such
counsel, are contemplated by the Commission;
(xiii) the Registration Statement originally filed with respect to the
Securities and each amendment thereto and any Rule 462(b) Registration
Statement, the Prospectus and any Integrated Prospectus (in each case,
including the documents incorporated by reference therein but not including
the financial statements and other financial information contained therein,
as to which such counsel need express no opinion), as of their respective
effective or issue dates, comply as to form in all material respects with
the applicable requirements of the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder;
(xiv) if the Company elects to rely on Rule 434, the Prospectus is
not "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or any effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A);
and
(xv) the Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
Such counsel shall also state that they have participated in the preparation of
the Registration Statement and the Prospectus and any Integrated Prospectus and
have no reason to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus and any Integrated Prospectus, as
of its date or the date of such opinion, included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
United States, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon local counsel in such jurisdictions. The foregoing opinion
shall also state that the Underwriters are justified in relying upon such
opinion of local counsel, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
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<PAGE>
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Andrews & Kurth L.L.P., counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the Registration
Statement and the Prospectus or any Integrated Prospectus, and such other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(d) The Representatives shall have received from Deloitte & Touche LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the Company and
its consolidated subsidiaries within the meaning of the Act, the Exchange
Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
and schedules examined by them and included in the Registration Statement
and the Prospectus and any Integrated Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act,
the Exchange Act and the related published rules and regulations
thereunder;
(iii) on the basis of their limited review in accordance with standards
established by the American Institute of Certified Public Accountants of
any interim unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries as indicated in their report[s]
incorporated in the Registration Statement and the Prospectus and any
Integrated Prospectus, a reading of the latest available interim unaudited
consolidated condensed financial statements of the Company and its
consolidated subsidiaries, for the six months ended June 30, 1997 and of
the unaudited consolidated financial statements of the Company and its
consolidated subsidiaries for the periods from which such amounts are
derived], carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus and any Integrated Prospectus
do not comply in form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the related
published rules and regulations thereunder, or are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement and the
Prospectus and any Integrated Prospectus;
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<PAGE>
(B) at a specific date not more than five business days prior to
the date of such letter, there were any changes in the capital stock or
long-term debt of the Company and its consolidated subsidiaries or any
decreases in net current assets or stockholders' equity of the Company
and its consolidated subsidiaries, in each case compared with amounts
shown on the June 30, 1997 unaudited consolidated condensed balance
sheet included in the Registration Statement and the Prospectus and any
Integrated Prospectus, or for the period from August 1, 1997 to such
specified date there were any decreases, as compared with the period
from August 1, 1996 to a year prior to such specified date, in sales,
net revenues, net income before income taxes or total or per share
amounts of net income of the Company and its consolidated subsidiaries,
except in all instances for changes, decreases or increases set forth
in such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records
of the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus and any Integrated Prospectus
under the captions "Prospectus Summary-- The Company," "Capitalization,"
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," in Exhibit II to the Registration Statement or
under Part I, Item 1 and Part II, Items 6 and 7 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 and under Part I,
Items 1 and 2 of the Company's Quarterly Reports on Form 10-Q for the three
months ended March 31, 1997 and June 30, 1997, respectively, incorporated
by reference in the Registration Statement and the Prospectus and any
Integrated Prospectus, and have compared such amounts, percentages and
financial information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have found
them to be in agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement, the Prospectus and any Integrated
Prospectus in this paragraph (d) with respect to either letter referred to above
shall include any amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a certificate, dated the Firm
Closing Date, of the chief executive officer and the chief financial officer of
the Company to the effect that:
(i) the representations and warranties of the Company in this Agreement
are true and correct as if made on and as of the Firm Closing Date; the
Registration Statement, as amended as of the Firm Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading, and
the Prospectus and any Integrated Prospectus, as amended or supplemented as
of the Firm Closing Date, does not include any untrue statement of a
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<PAGE>
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at
any document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the
best of the Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus and any Integrated
Prospectus, neither the Company nor any of its Subsidiaries has sustained
any material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse
change, or any development involving a prospective material adverse change,
in the condition (financial or otherwise), management, business prospects,
net worth or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus and any Integrated Prospectus.
(f) The Representatives shall have received from each person who is a
director or officer of the Company or who owns _______ shares of Common Stock an
agreement to the effect that such person will not, directly or indirectly,
without your prior written consent, on behalf of the Underwriters, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 90 days
after the date of this Agreement.
(g) On or before the Firm Closing Date, the Representatives and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(h) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
(i) Simultaneously with the closing of the transaction contemplated hereby,
the Company shall have repaid in full and retired the Credit Facilities (as
defined in the Prospectus) and shall have replaced such facilities with a bridge
facility or permanent replacement facility containing provisions which permit
the repayment of principal and interest on the Securities which are acceptable
to the Underwriters.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
20
<PAGE>
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus and any Integrated Prospectus
or any amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the Company
or based upon written information furnished by or on behalf of the Company
filed in any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials used in connection with the
marketing of the Securities, including, without limitation, slides, videos,
films and tape recordings
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or
is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto, or any Application in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for
use therein; and provided, further, that the Company will not be liable to
any Underwriter or any person controlling such Underwriter with respect to
any such untrue statement or omission made in any Preliminary Prospectus
that is corrected in the Prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage or liability
21
<PAGE>
purchased Securities from such Underwriter but was not sent or given a copy
of the Prospectus (as amended or supplemented), other than the documents
incorporated by reference therein, at or prior to the written confirmation
of the sale of such Securities to such person in any case where such
delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or
supplemented) was a result of noncompliance by the Company with Section
4(d) and (a) of this Agreement. This indemnity agreement will be in
addition to any liability which the Company may otherwise have. The Company
will not, without the prior written consent of the Underwriter or
Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not
any such Underwriter or any person who controls any such Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 7. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be
22
<PAGE>
one or more legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, the indemnifying party shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
7, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party does not promptly
retain counsel satisfactory to the indemnified party or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 7 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying party,
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has
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<PAGE>
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the agreement among
underwriters. For purposes of this paragraph (d), each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
8. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 9 hereof. In the event of any default by one or more Underwriters as
described in this Section 8, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
9. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 7 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
10. Termination. (a) This Agreement may be terminated with respect to
-----------
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the
24
<PAGE>
Company given prior to the Firm Closing Date or the related Option Closing Date,
respectively, in the event that the Company shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Firm Closing Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have, in the sole
judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including,
without limitation, a change in management or control of the Company), in
the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or trading in securities generally on the New York Stock
Exchange shall have been suspended or minimum or maximum prices shall have
been established on such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall not have occurred any downgrading in the rating of
the Securities or of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of the
Securities or of any debt securities of the Company other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the U.S. financial markets that, in the sole judgment
of the Representatives, makes it impractical or inadvisable to proceed with
the public offering or the delivery of the Securities as contemplated by
the Registration Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 10 shall be
without liability of any party to any other party except as provided in Section
9 hereof.
11. Information Supplied by Underwriters. The statements set forth in
------------------------------------
[the last paragraph on the front cover page and under the heading "Underwriting"
in any Preliminary Prospectus or the Prospectus or any Integrated Prospectus (to
the extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter through the Representatives to the
Company for the purposes of Sections 2(b) and 7 hereof. The Underwriters
confirm that such statements (to such extent) are correct.
25
<PAGE>
12. Notices. All communications hereunder shall be in writing and, if
-------
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing as set forth in Schedule 1; and
if sent to the Company, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at 21 Inverness Way, Suite
160, Englewood, Colorado 80112, Attention: Roger Wertheimer, Esq.
13. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 7 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 7 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
14. Applicable Law. The validity and interpretation of this Agreement,
--------------
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
15. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
26
<PAGE>
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
MAIL-WELL, INC.
By:_________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
BEAR STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HANIFEN, IMHOFF INC.
By: Prudential Securities Incorporated
By:_________________________________
Name:
Title:
For itself and on behalf of the Representatives.
27
<PAGE>
SCHEDULE 1
MAIL-WELL, INC.
PRICE DETERMINATION AGREEMENT
[Title of Securities]
A. General
Registration Statement File No. 333-_______________:
Date of Underwriting Agreement:
Send Notices to Underwriters to:
Closing date, time and location:
Other terms and conditions:
B. Terms of Notes
Principal Amount:
Interest Rate:
Stated Maturity:
Underwriters' Discount:
Net Proceeds to the Company:
Interest Payment Dates:
Redemption Provisions:
Terms of Conversion:
Listing requirement: [None] [NYSE] [Any other stock
exchange]
Other provisions:
C. Lock-up period:
(i) Last day of lock-up period contemplated by Section ______ if other
than closing time:
(ii) Last day of lock-up period contemplated by Section ______: 180
days
D. Exceptions to the conditions to the Underwriters' obligations provided for
in Section __ (if any) :
E. Comfort Letter information:
Paragraph (4)(b)(i): __________
Paragraph (4)(b)(ii): __________
F. Locations:
Packaging/Inspection:
Pre-Closing:
Closing:
Banks: $____________
<PAGE>
SCHEDULE 2
UNDERWRITERS
AGGREGATE PRINCIPAL
AMOUNT OF FIRM
SECURITIES TO
UNDERWRITER BE PURCHASED
- ----------------------------------- ------------------------
Prudential Securities Incorporated
Bear Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
Hanifen, Imhoff Inc.
Total.......................
<PAGE>
Exhibit 4.2
================================================================================
MAIL-WELL, INC.
AND
THE BANK OF NEW YORK
AS TRUSTEE
_______________________
SUBORDINATED DEBT SECURITIES
_______________________
INDENTURE
DATED AS OF NOVEMBER ___, 1997
================================================================================
<PAGE>
MAIL-WELL, INC.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS OF THE TRUST INDENTURE ACT OF 1939
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
(S)310(a)(1)........................................... 7.8, 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... Not Applicable
(a)(4)........................................... Not Applicable
(a)(5)........................................... 7.10
(b).............................................. 7.10
(S)311(a).............................................. 7.8, 7.10
(b).............................................. 7.11
(S)312(a).............................................. 2.7
(b).............................................. 13.3
(c).............................................. 13.3
(S)313(a).............................................. 7.6
(b).............................................. 7.6
(c).............................................. 7.6, 13.2
(d).............................................. 7.6
(S)314(a).............................................. 4.2, 13.2
(b).............................................. Not Applicable
(c)(1)........................................... 13.4
(c)(2)........................................... 13.4
(c)(3)........................................... Not Applicable
(d).............................................. Not Applicable
(e).............................................. 13.5
(f).............................................. 4.3
(S)315(a).............................................. 7.1
(b).............................................. 7.5, 13.2
(c).............................................. 7.1
(d).............................................. 7.1
(e).............................................. 6.11
(S)316(a)(1)(A)........................................ 6.5
(a)(1)(B)........................................ 6.4
(a)(2)........................................... Not Applicable
(b).............................................. 6.7
(c).............................................. Not Applicable
(S)317(a)(1)........................................... 6.8
(a)(2)........................................... 6.9
(b).............................................. 2.6
(S)318(a).............................................. 13.1
(b).............................................. Not Applicable
(c).............................................. 13.1
</TABLE>
_________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<TABLE>
<CAPTION>
<C> <S>...................................................... <C>
Section 1.1 Definitions.............................................. 1
Section 1.2 Other Definitions........................................ 6
Section 1.3 Incorporation by Reference of Trust Indenture Act........ 6
Section 1.4 Rules of Construction.................................... 7
ARTICLE II
THE SECURITIES
Section 2.1 Forms Generally.......................................... 7
Section 2.2 Securities in Global Form................................ 8
Section 2.3 Title, Terms And Denominations........................... 10
Section 2.4 Execution, Authentication, Delivery And Dating........... 13
Section 2.5 Registrar And Paying Agent............................... 16
Section 2.6 Paying Agent to Hold Money And Securities in Trust....... 16
Section 2.7 Securityholder Lists..................................... 17
Section 2.8 Transfer And Exchange.................................... 17
Section 2.9 Replacement Securities And Coupons....................... 20
Section 2.10 Outstanding Securities; Determinations of Holders' Action 21
Section 2.11 Temporary Securities..................................... 22
Section 2.12 Cancellation............................................. 24
Section 2.13 Payment of Interest; Interest Rights Preserved........... 25
Section 2.14 Persons Deemed Owners.................................... 26
Section 2.15 Computation of Interest.................................. 27
ARTICLE III
REDEMPTION
Section 3.1 Right to Redeem; Notices to Trustee...................... 27
Section 3.2 Selection of Securities to Be Redeemed................... 27
Section 3.3 Notice of Redemption..................................... 28
Section 3.4 Effect of Notice of Redemption........................... 28
Section 3.5 Deposit of Redemption Price.............................. 29
Section 3.6 Securities Redeemed in Part.............................. 30
</TABLE>
<PAGE>
ARTICLE IV
COVENANTS
<TABLE>
<CAPTION>
<C> <S> <C>
Section 4.1 Payment of Securities..................................... 30
Section 4.2 SEC Reports............................................... 30
Section 4.3 Compliance Certificate.................................... 31
Section 4.4 Further Instruments And Acts.............................. 31
Section 4.5 Maintenance of Office or Agency........................... 31
Section 4.6 Additional Amounts........................................ 32
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge or Transfer Assets................. 33
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default......................................... 34
Section 6.2 Acceleration.............................................. 35
Section 6.3 Other Remedies............................................ 36
Section 6.4 Waiver of Past Defaults................................... 36
Section 6.5 Control by Majority....................................... 37
Section 6.6 Limitation on Suits....................................... 37
Section 6.7 Rights of Holders to Receive Payment...................... 37
Section 6.8 Collection Suit by Trustee................................ 38
Section 6.9 Trustee May File Proofs of Claim.......................... 38
Section 6.10 Priorities................................................ 39
Section 6.11 Undertaking For Costs..................................... 39
Section 6.12 Waiver of Stay, Extension or Usury Laws................... 39
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee......................................... 40
Section 7.2 Rights of Trustee......................................... 41
Section 7.3 Individual Rights of Trustee, Etc......................... 42
Section 7.4 Trustee's Disclaimer...................................... 42
</TABLE>
ii
<PAGE>
<TABLE>
<C> <S> <C>
Section 7.5 Notice of Defaults........................................ 43
Section 7.6 Reports by Trustee to Holders............................. 43
Section 7.7 Compensation And Indemnity................................ 43
Section 7.8 Replacement of Trustee.................................... 44
Section 7.9 Successor Trustee by Merger............................... 46
Section 7.10 Eligibility; Disqualification............................. 46
Section 7.11 Preferential Collection of Claims Against Company......... 46
ARTICLE VIII
SATISFACTION AND DISCHARGE
Section 8.1 Discharge of Liability on Securities...................... 46
Section 8.2 Repayment to The Company.................................. 47
Section 8.3 Option to Effect Defeasance or Covenant Defeasance........ 47
Section 8.4 Defeasance And Discharge.................................. 47
Section 8.5 Covenant Defeasance....................................... 48
Section 8.6 Conditions to Defeasance or Covenant Defeasance........... 48
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without Consent of Holders........ 49
Section 9.2 Supplemental Indentures With Consent of Holders........... 50
Section 9.3 Compliance With Trust Indenture Act....................... 51
Section 9.4 Revocation And Effect of Consents, Waivers And Actions.... 51
Section 9.5 Notation on or Exchange of Securities..................... 51
Section 9.6 Trustee to Sign Supplemental Indentures................... 52
Section 9.7 Effect of Supplemental Indentures......................... 52
ARTICLE X
SINKING FUNDS
Section 10.1 Applicability of Article.................................. 52
Section 10.2 Satisfaction of Sinking Fund Payments With Securities..... 52
Section 10.3 Redemption of Securities For Sinking Fund................. 53
</TABLE>
iii
<PAGE>
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
Section 11.1 Purposes For Which Meetings May Be Called................. 53
Section 11.2 Call, Notice And Place of Meetings........................ 53
Section 11.3 Persons Entitled to Vote at Meetings...................... 54
Section 11.4 Quorum; Action............................................ 54
Section 11.5 Determination of Voting Rights; Conduct And Adjournment of
Meetings................................................. 55
Section 11.6 Counting Votes And Recording Action of Meetings........... 56
Section 11.7 Actions of Holders Generally.............................. 56
ARTICLE XII
SUBORDINATION
Section 12.1 Securities Subordinate to Senior Indebtedness............. 58
Section 12.2 Payment Over of Proceeds Upon Dissolution, Etc............ 59
Section 12.3 Acceleration of Securities................................ 60
Section 12.4 Default in Senior Indebtedness............................ 61
Section 12.5 Payment Permitted If No Default........................... 62
Section 12.6 Subrogation Rights of Holders of Senior Indebtedness...... 62
Section 12.7 Provision Solely to Define Relative Rights................ 62
Section 12.8 Trustee to Effectuate Subordination....................... 63
Section 12.9 No Waiver of Subordination Provisions..................... 63
Section 12.10 Notice to Trustee......................................... 64
Section 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.................................................... 64
Section 12.12 Trustee Not Fiduciary For Holders of Senior Indebtedness.. 65
Section 12.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights......................... 65
Section 12.14 Article XII Applicable to Paying Agents................... 65
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls.............................. 66
Section 13.2 Notices................................................... 66
Section 13.3 Communication by Holders with Other Holders............... 67
Section 13.4 Certificate and Opinion as to Conditions Precedent........ 68
Section 13.5 Statements Required in Certificate or Opinion............. 68
iv
<PAGE>
Section 13.6 Separability Clause....................................... 68
Section 13.7 Rules by Trustee, Paying Agent and Registrar.............. 68
Section 13.8 Legal Holidays............................................ 69
Section 13.9 Governing Law and Jurisdiction............................ 69
Section 13.10 No Recourse Against Others................................ 69
Section 13.11 Successors................................................ 70
Section 13.12 Effect of Headings and Table of Contents.................. 70
Section 13.13 Benefits of Indenture..................................... 70
Section 13.14 Multiple Originals........................................ 70
Exhibit A Form of Certificate to be given by Euroclear or CEDEL S.A... 72
v
<PAGE>
INDENTURE
THIS INDENTURE dated as of November ___, 1997, by and among MAIL-WELL,
INC., a Colorado corporation ("Company"), and THE BANK OF NEW YORK, a New York
banking corporation, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued in one or more series as in this Indenture provided.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
ratable benefit of the Holders from time to time of the Securities or each
series thereof as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"Control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "Controlling" and "Controlled" have
meanings correlative to the foregoing.
"Authorized Newspaper" means a newspaper, in the English language or, at
the option of the Company, in an official language of the country of
publication, customarily published on each Business Day (with respect to Bearer
Securities, set forth in the Officers' Certificate with respect to a series of
Bearer Securities), whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different Authorized Newspapers meeting the
foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form (to the extent applicable
thereto) established pursuant to Section 2.1 which is payable to the bearer.
<PAGE>
"Board of Directors" means the board of directors of the Company or any
committee of such board authorized with respect to any matter to exercise the
powers of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, except as otherwise specified as contemplated by
Section 2.3(a), with respect to any Place of Payment or any other particular
location referred to in this Indenture or the Securities, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in that Place of Payment or other location are authorized or
obligated by law or executive order to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"Cash" means such coin or currency of the United States as at any time of
payment is legal tender for the payment of public and private debts.
"Company" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman,
its Chief Executive Officer, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee or, with respect to Sections 2.4, 2.8, 2.11 and 7.2,
any other employee of the Company named in an Officers' Certificate delivered to
the Trustee.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in global form, the person specified as
contemplated by Section 2.3(a) as the Depositary with respect to such series of
Securities, until a successor shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
such successor.
2
<PAGE>
"Debt" means with respect to any person at any date, without duplication
(i) all obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Debt of others secured by a lien on any asset of such person, whether
or not such Debt is assumed by such person, (iv) all obligations of such person
pursuant to leases which are required to be capitalized under generally accepted
accounting principles consistently applied and (v) all Debt of others for the
payment of which such person is responsible or liable as obligor or guarantor.
"Discount Security" means any Security which provides for an amount less
than the Principal Amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.2.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder," when used with respect to any Security,
means, in the case of a Registered Security, a person in whose name a Security
is registered on the Registrar's books and, in the case of a Bearer Security,
the bearer thereof and, when used with respect to any coupon, means the bearer
thereof.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof and shall include the terms of a
particular series of Securities established as contemplated in Section 2.3(a).
"Interest," when used with respect to a Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on
which the Principal of such Security or an installment of Principal or, in the
case of a Discount Security, the Principal Amount payable upon a declaration of
acceleration pursuant to Section 6.2, becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, any Vice Chairman, the Chief
Executive Officer, the President, any Vice President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
3
<PAGE>
"Officers' Certificate" means a written certificate containing the
information specified in Sections 13.4 and 13.5, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its Chief Executive
Officer, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 13.4 and 13.5, from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of, or counsel to, the Company or the
Trustee.
"Periodic Offering" means an offering of Securities of a series from time
to time the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the Stated Maturity or
Maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as contemplated by Section
2.3(a) with respect thereto, are to be determined by the Company, or one or more
of the Company's agents designated in an Officers' Certificate, upon the
issuance of such Securities.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
4.5, the Principal of and any interest on the Securities of that series are
payable as specified as contemplated by Section 2.3(a).
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.9 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"Principal" or "Principal Amount" of a Security, except as otherwise
specifically provided in this Indenture, means the outstanding principal of the
Security plus the premium, if any, of the Security.
"Redemption Date" or "Redemption Date," when used with respect to any
Security to be redeemed, shall mean the date specified for redemption of such
Security in accordance with the terms of such Security and this Indenture.
"Redemption Price" or "Redemption Price," when used with respect to any
Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
4
<PAGE>
"Registered Security" means any Security in the form (to the extent
applicable thereto) established pursuant to Section 2.1 which is registered on
the books of the Registrar.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 2.3(a).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securityholder" or "Holder," when used with respect to any Security,
means in the case of a Registered Security, a person in whose name a Security is
registered on the Registrar's books and in the case of a Bearer Security the
bearer thereof and, when used with respect to any coupon, means the bearer
thereof.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any issue means a date fixed by the Trustee pursuant to
Section 2.13.
"Stated Maturity," when used with respect to any Security or any
installment of Principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which an amount equal to the Principal of such Security or an
installment of Principal thereof or interest thereon is due and payable.
"Subsidiary" means, with respect to any person, a corporation of which a
majority of the Capital Stock having voting power under ordinary circumstances
to elect a majority of the board of directors of such corporation is owned by
(i) such person, (ii) such person and one or more Subsidiaries or (iii) one or
more Subsidiaries of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, except as provided in Section 9.3.
"Trust Officer" means, when used with respect to the Trustee, any Senior
Trust Officer, any Vice President, any Trust Officer, any Assistant Vice
President or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of or familiarity with the particular
subject.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
5
<PAGE>
"United States" means the United States of America, its territories, its
possessions (including the Commonwealth of Puerto Rico), and other areas subject
to its jurisdiction.
"United States Alien" means any person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
Section 1.2 Other Definitions.
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
"Bankruptcy Law".................... 6.1
"Custodian"......................... 6.1
"Defaulted Interest"................ 2.13
"Event of Default".................. 6.1
"Exchange Date"..................... 2.11
"Legal Holiday"..................... 13.8
"Notice of Default"................. 6.1
"Outstanding"....................... 2.10
"Paying Agent"...................... 2.5
"Registrar"......................... 2.5
"Senior Indebtedness"............... 12.1
</TABLE>
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder or Securityholder.
"Indenture to Be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the indenture securities means the Company.
6
<PAGE>
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in the United
States as in effect from time to time;
(c) "or" is not exclusive;
(d) "Including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
ARTICLE II
THE SECURITIES
Section 2.1 Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in substantially
such form (including global form) as shall be established by delivery to the
Trustee of an Officers' Certificate or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Securities or coupons as evidenced by their execution of
the Securities or coupons. The Officers' Certificate so establishing the form
of Security or coupons, if any, of any series shall be delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 2.4 for
the authentication and delivery of such Securities or coupons.
Unless otherwise specified as contemplated by Section 2.3(a), Bearer
Securities shall have interest coupons attached.
7
<PAGE>
The permanent Securities and coupons, if any, shall be printed,
lithographed, engraved or word processed or produced by any combination of these
methods or may be produced in any other manner, provided, that such method is
permitted by the rules of any securities exchange on which such Securities may
be listed, all as determined by the Officers executing such Securities as
evidenced by their execution of such Securities.
Section 2.2 Securities in Global Form.
If Securities of a series are issuable in temporary or permanent global
form, as specified as contemplated by Section 2.3(a), then, notwithstanding
clause (10) of Section 2.3(a) and the provisions of Section 2.3(b), any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon or otherwise
notated on the books and records of the Registrar and that the aggregate amount
of Outstanding Securities represented thereby may from time to time be reduced
to reflect exchanges. Any endorsement of a Security in global form to reflect
the amount of any increase or decrease in the amount of Outstanding Securities
represented thereby shall be made by the Trustee in such manner and upon
instructions given by such person or persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to Section 2.4 or
Section 2.11. Subject to the provisions of Section 2.4 and, if applicable,
Section 2.11, the Trustee shall deliver and redeliver any Security in global
form in the manner and upon instructions given by the person or persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 2.4 or 2.11 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or other notation on the
books and records of the Registrar or delivery or redelivery of a Security of
such series in global form shall be in writing but need not comply with Section
13.4 or 13.5 and need not be accompanied by an Opinion of Counsel (except as
required by Section 2.4).
The provisions of the last sentence of Section 2.4 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company, and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 13.4 or 13.5 and need not be accompanied by an Opinion of
Counsel) with regard to the reduction in the Principal Amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 2.4.
Notwithstanding the provisions of Sections 2.1 and 2.13, unless otherwise
specified as contemplated by Section 2.3(a), payment of Principal of and any
interest on any Security in global form shall be made to the person or persons
specified therein.
Any series of Bearer Securities shall be issued initially in the form of
one temporary global Bearer Security (the "Temporary Global Bearer Security"),
which Temporary Global Bearer Security shall be deposited on behalf of the
beneficial owners of the Bearer Securities represented thereby with the main
office of the Trustee, as common depositary (the "Common Depositary"), for
credit
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to their respective accounts (or to such other accounts as they may direct) at
Morgan Guaranty Trust Company of New York, Brussels office, as operator of
Euroclear or CEDEL S.A.
On or before the date 40 days after the later of the announcement of the
offering and the date of settlement (the "Exchange Date"), the Company shall
deliver to a Paying Agent located outside the United States, or its designated
agent, Bearer Securities executed by the Company. On or after the Exchange
Date, the Temporary Global Bearer Security shall be surrendered by the Common
Depositary to the Trustee or its agent, as the Company's agent for such purpose,
to be exchanged, in whole or from time to time in part, at the sole discretion
of the Company for (i) Bearer Securities or (ii) a permanent global Bearer
Security (the "Permanent Global Bearer Security") without charge to Holders, and
the principal Paying Agent or other Paying Agent outside the United States shall
authenticate and deliver (at an office or agency outside the United States), in
exchange for the Temporary Global Bearer Security or the portions thereof to be
exchanged, an equal aggregate principal amount of Bearer Securities or the
Permanent Global Bearer Security, as shall be specified by the beneficial owners
thereof; provided, however, that upon such presentation by the Common
Depositary, the Temporary Global Bearer Security is accompanied by a certificate
dated the Exchange Date or a subsequent date and signed by Euroclear as to the
portion of the Temporary Global Bearer Security held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL S.A. as to the portion of the Temporary Global Bearer Security
held for its account then to be exchanged, each to the effect hereinafter
provided. The Company and the Trustee agree that they will cooperate in causing
the paying agent located outside the United States to retain each certificate
provided by Euroclear or CEDEL S.A. for a period of four calendar years
following the year in which the certificate is received and not to destroy or
otherwise dispose of any such certificate without first offering to deliver it
to the Company.
Each certificate to be provided by Euroclear and CEDEL S.A. shall be
substantially in the form attached hereto as Exhibit A or with such changes
therein as shall be approved by the Company and be satisfactory to the Trustee.
Each certificate received by Euroclear and CEDEL S.A. from persons
appearing in their records as persons entitled to a portion of the Temporary
Global Bearer Security shall be substantially to the effect set forth in this
Indenture.
Upon any such exchange of a portion of the Temporary Global Bearer Security
for Bearer Securities or the Permanent Global Bearer Security, the Temporary
Global Bearer Security shall be endorsed to reflect the reduction of the
principal amount evidenced thereby. Until so exchanged in full, the Temporary
Global Bearer Security shall in all respects be entitled to the same benefits
under, and subject to the same terms and conditions of, this Indenture as Bearer
Securities authenticated and delivered hereunder, except that none of Euroclear,
CEDEL S.A. or the beneficial owners of the Temporary Global Bearer Security
shall be entitled to receive payment of interest or other payments thereon or to
convert the Temporary Global Bearer Security, or any portion thereof, into
Common Stock of the Company or any other security, cash or other property.
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Section 2.3 Title, Terms And Denominations.
The aggregate Principal Amount of Securities which may be authenticated and
delivered under this Indenture shall be unlimited.
The Securities may be issued in one or more series. There shall be
established and, subject to Section 2.4, set forth, or determined in the manner
provided, in an Officers' Certificate of the Company, or established in one or
more indentures supplemental hereto:
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(b) any limit upon the aggregate Principal Amount of the Securities of
the series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Sections 2.8, 2.9, 2.11, 3.6, 9.5 or 10.3 and except for any Securities which,
pursuant to Section 2.4, are deemed never to have been authenticated and
delivered hereunder);
(c) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities or both, whether any Securities of the series may
be represented initially by a Security in temporary or permanent global form
and, if so, the initial Depositary with respect to any such temporary or
permanent global Security, and if other than as provided in Section 2.8 or
Section 2.11, as applicable, whether and the circumstances under which
beneficial owners of interests in any such temporary or permanent global
Security may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the Authorized Newspapers for
publication of notices to holders of Bearer Securities;
(d) any other terms required for the establishment of a series of
Bearer Securities, including, but not limited to, tax compliance procedures;
(e) the person to whom any interest on any Registered Security of the
series shall be payable, if other than the person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, and the
person to whom, any interest on any Bearer Security of the series shall be
payable, if otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to which, or the
manner in which (including any certification requirement and other terms and
conditions under which), any interest payable on a temporary or permanent global
Security on an Interest Payment Date will be paid if other than in the manner
provided in Section 2.2 and Section 2.4, as applicable;
(f) the date or dates on which the Principal of the Securities of the
series is payable or the method of determination thereof;
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(g) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and the
Regular Record Date for any interest payable on any Registered Securities on any
Interest Payment Date;
(h) the place or places where, subject to the provisions of Section
4.5, the Principal of and any interest on Securities of the series shall be
payable, any Registered Securities of the series may be surrendered for
registration of transfer, Securities of the series may be surrendered for
exchange and notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served;
(i) the period or periods within which, the price or prices at which
and the terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(j) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof, the conditions, if any, giving rise to such
obligation, and the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, and any provisions for the
remarketing of such Securities;
(k) the denominations in which any Registered Securities of the series
shall be issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the denomination or denominations in which any Bearer
Securities of the series shall be issuable, if other than denominations of
$5,000 and $100,000;
(l) the currency or currencies, including composite currencies, in
which payment of the Principal of and any interest on the Securities of the
series shall be payable if other than the currency of the United States, and if
so, whether the Securities of the series may be satisfied and discharged other
than as provided in Article VIII;
(m) if the amount of payments of principal of and any interest on the
Securities of the series is to be determined with reference to an index, formula
or other method, or based on a coin or currency other than that in which the
Securities are stated to be payable, the manner in which such amounts shall be
determined and the calculation agent, if any, with respect thereto;
(n) if other than the Principal Amount thereof, the portion of the
Principal Amount of any Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 6.2;
(o) if the Company will pay additional amounts on any of the
Securities and coupons, if any, of the series to any Holder who is a United
States Alien (including any modification in the definition of such term), in
respect of any tax, assessment or governmental charge withheld
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or deducted, under what circumstances and with what procedures and documentation
the Company will pay such additional amounts, whether such additional amounts
will be treated as interest or Principal pursuant to this Indenture, and whether
the Company will have the option to redeem such Securities rather than pay
additional amounts (and the terms of any such option);
(p) if other than as defined in Section 1.1, the meaning of "Business
Day" when used with respect to any Securities of the series;
(q) if and the terms and conditions upon which the Securities of the
series may or must be converted into securities of the Company or exchanged for
securities of the Company or another enterprise;
(r) any terms applicable to Original Issue Discount, if any, (as that
term is defined in the Internal Revenue Code of 1986 and the Regulations
thereunder) including the rate or rates at which such Original Issue Discount,
if any, shall accrue;
(s) if the Securities of the series may be issued or delivered
(whether upon original issuance or upon exchange of a temporary Security of such
series or otherwise), or any installment of Principal of or any interest is
payable, only upon receipt of certain certificates or other documents or
satisfaction of other conditions in addition to those specified in this
Indenture, the form and terms of such certificates, documents or conditions; and
(t) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.1(7)).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to an Officers' Certificate pursuant to this Section
2.3(a) or in any indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series or
for the establishment of additional terms with respect to the Securities of such
series.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of any appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series. With respect to Securities
of a series subject to a Periodic Offering, such Board Resolution or Officers'
Certificate may provide general terms for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company, or one or more of the Company's agents designated in an Officers'
Certificate, in
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accordance with the Company Order as contemplated by the first proviso of the
third paragraph of Section 2.4.
(i) Unless otherwise provided as contemplated by Section 2.3(a)
with respect to any series of Securities, any Registered Securities of a
series shall be issuable in denominations of $1,000 and any integral
multiple thereof and any Bearer Securities of a series shall be issuable in
denominations of $5,000 and $100,000.
Section 2.4 Execution, Authentication, Delivery And Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, one of its Vice Chairmen, its President or one of its Vice
Presidents, or the Treasurer or any Assistant Treasurer, under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. Coupons shall bear the facsimile signature of the Treasurer
or any Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture (and subject to delivery of the Board Resolution or Officers'
Certificate or supplemental indenture as set forth in Section 2.3 with respect
to the initial issuance of Securities of any series), the Company may deliver
Securities of any series together with any coupons appertaining thereto,
executed by the Company to the Trustee or its authenticating agent with respect
to Bearer Securities for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee or its
authenticating agent with respect to Bearer Securities in accordance with such
Company Order shall authenticate and deliver such Securities; provided, however,
that, with respect to Securities of a series subject to a Periodic Offering, (a)
such Company Order may be delivered by the Company to the Trustee or its
authenticating agent with respect to Bearer Securities prior to the delivery to
the Trustee of such Securities for authentication and delivery, (b) the Trustee
shall authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate Principal Amount not exceeding the aggregate
Principal Amount established for such series, pursuant to a Company Order or
pursuant to such procedures acceptable to the Trustee as may be specified from
time to time by a Company Order, (c) the rate or rates of interest, if any, the
Stated Maturity or Maturities, the original issue date or dates, the redemption
provisions, if any, and any other terms of Securities of such series shall be
determined by a Company Order or pursuant to such procedures and (d) if provided
for in such procedures, such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company, or the
Company's duly authorized agent or agents designated in an Officers'
Certificate, which oral
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instructions shall be promptly confirmed in writing; and provided, further, that
no Bearer Security or coupon shall be mailed or otherwise delivered to any
person who is not a United States Alien or to any location in the United States.
Except as permitted by Section 2.9, the authenticating agent shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and canceled.
If the forms or terms of the Securities of the series and any related
coupons have been established in or pursuant to one or more Officers'
Certificates as permitted by Sections 2.1 and 2.3(a), in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.1) shall be fully protected in relying upon, an Opinion of
Counsel stating:
(i) that the form and terms of such Securities and any
coupons have been duly authorized by the Company and established in
conformity with the provisions of this Indenture; and
(ii) that such Securities, together with any coupons
appertaining thereto, when authenticated and delivered by the Trustee or
its authenticating agent and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to customary
exceptions; provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to receive
such Opinion of Counsel only once at or prior to the time of the first
authentication of Securities of such series (provided that such Opinion of
Counsel covers all Securities of such series) and that the Opinion of
Counsel above may state:
(A) that the forms of such Securities have been, and
the terms of such Securities (when established in accordance with
such procedures as may be specified from time to time in a Company
Order, all as contemplated by and in accordance with a Board
Resolution or an Officers' Certificate or supplemental indenture
pursuant to Section 2.3(a), as the case may be) will have been,
duly authorized by the Company and established in conformity with
the provisions of this Indenture; and
(B) that such Securities, together with the coupons,
if any, appertaining thereto, when (1) executed by the Company,
(2) completed, authenticated and delivered by the Trustee or in
the case of Bearer Securities and coupons, an authenticating agent
located outside the United States, in accordance with this
Indenture, and (3) issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to customary
exceptions.
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With respect to Securities of a series subject to a Periodic Offering, the
Trustee may conclusively rely, as to the authorization by the Company of any of
such Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and other
documents delivered pursuant to Sections 2.1 and 2.3(a) and this Section, as
applicable, at or prior to the time of the first authentication of Securities of
such series unless and until it has received written notification that such
opinion or other documents have been superseded or revoked. In connection with
the authentication and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume, unless it has actual
knowledge to the contrary, that the Company's instructions to authenticate and
deliver such Securities do not violate any rules, regulations or orders of any
governmental agency or commission having jurisdiction over the Company.
Notwithstanding the provisions of Section 2.3(a) and of the preceding three
paragraphs, if all Securities of a series are subject to a Periodic Offering, it
shall not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 2.3(a) at or prior to the time of authentication of each
Security of such series if such Officers' Certificate is delivered at or prior
to the authentication upon original issuance of the first Security of such
series to be issued.
Each Registered Security shall be dated the date of its authentication;
and, unless otherwise specified as contemplated by Section 2.3(a), each Bearer
Security (including a Bearer Security represented by a temporary global
Security) shall be dated as of the date of original issuance of the first
Security of such series to be issued.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[ ], as Trustee
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By:____________________________________
____________________________________
Authorized Officer
Notwithstanding the foregoing, if any Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.12 together with a written statement (which need not
comply with Section 13.4 or 13.5 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section 2.5 Registrar And Paying Agent.
The Company shall maintain, with respect to each series of Securities, an
office or agency where such Securities may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency where such
Securities may be presented for purchase or payment ("Paying Agent"). The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co- registrars and one or more
additional paying agents. The term Paying Agent includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement with respect
to each series of Securities with any Registrar, Paying Agent or co-registrar
(if not the Trustee). The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify the Trustee of
the name and address of any such agent. If the Company fails to maintain a
Registrar or Paying Agent for a particular series of Securities, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.7. The Company or any Subsidiary or an Affiliate of
either of them may act as Paying Agent, Registrar or co-registrar.
The Company initially appoints the Trustee as the Registrar and Paying
Agent in connection with such Securities and the Trustee, acting through its
main office or as provided in the Officer's Certificate establishing the
Securities, as paying agent and authenticating agent for Bearer Securities.
Section 2.6 Paying Agent to Hold Money And Securities in Trust.
Except as otherwise provided herein, prior to or on each due date of
payments in respect of any series of Securities, the Company shall deposit with
the Paying Agent with respect to such Securities a sum of money sufficient to
make such payments when so becoming due. The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the Paying Agent shall
hold in trust for the benefit of Holders or the Trustee all money held by such
Paying Agent for the making of payments in respect of the Securities of such
series and shall notify the Trustee of any default by the Company in making any
such payment. At any time during the continuance of any such default, a Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
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Trustee all money so held in trust with respect to such Securities. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent for
a series of Securities, it shall segregate the money held by it as Paying Agent
with respect to such Securities and hold it as a separate trust fund. The
Company at any time may require a Paying Agent for a series of Securities to pay
all money held by it with respect to such Securities to the Trustee and to
account for any money disbursed by it. Upon doing so, such Paying Agent shall
have no further liability for the money.
Section 2.7 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of each series of Securities. If the Trustee is not the Registrar for
any series of Securities, the Company shall cause to be furnished to the Trustee
at least semiannually on June 1 and December 1 a listing of Holders of such
series of Securities dated within 15 days of the date on which the list is
furnished and at such other times as the Trustee may request in writing a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders of such series of Securities.
Section 2.8 Transfer And Exchange.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated pursuant to Section 4.5 for such purpose in
a Place of Payment, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations of a like aggregate Principal Amount and tenor. The Company shall
not charge a service charge for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges that may be imposed in connection with
the transfer or exchange of the Securities from the Securityholder requesting
such transfer or exchange (other than any exchange of a temporary Security for a
definitive Security not involving any change in ownership or any exchange
pursuant to Section 2.11, 3.6, 9.5 or 10.3, not involving any transfer).
Notwithstanding any other provisions (other than the provisions set forth
in the sixth and seventh paragraphs) of this Section, a Security in global form
representing all or a portion of the Securities of a series may not be
transferred except as a whole by the Depositary for such series to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor Depositary.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denomination or denominations, of a like aggregate Principal Amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the
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exchange is entitled to receive. Bearer Securities may not be issued in exchange
for Registered Securities.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denomination or denominations and of a like aggregate Principal Amount and
tenor, upon surrender of the Bearer Securities to be exchanged at any office or
agency of the Company located outside the United States, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee or Paying Agent in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company, the Paying Agent and the Trustee if there is
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 4.5, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee or a duly appointed authenticating agent shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
If at any time the Depositary for the Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities of such series, the Company shall appoint a successor Depositary with
respect to the Securities of such series. If a successor Depositary for the
Securities of such series is not appointed by the Company within 90 days after
the Company receives such notice, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate Principal Amount equal to the
Principal Amount of the Security or Securities in global form representing such
series
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in exchange for such Security or Securities in global form in accordance with
the instructions, if any, of the Depositary.
The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more global Securities
shall no longer be represented by such global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver Securities of such series in definitive form and
in an aggregate Principal Amount equal to the Principal Amount of the Security
or Securities in global form representing such series in exchange for such
Security or Securities in global form in accordance with the instructions, if
any, of the Depositary.
Notwithstanding the foregoing, except as otherwise specified in the
preceding two paragraphs or as contemplated by Section 2.3(a), any global
Security shall be exchangeable only as provided in this paragraph. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities of such series and of like Principal
Amount and tenor but of another authorized form and denomination, as specified
as contemplated by Section 2.3(a), then without unnecessary delay but in any
event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities in
aggregate Principal Amount equal to the Principal Amount of such global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such global Security shall be surrendered by the
Depositary with respect thereto to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities without charge and the Trustee or, in the case of Bearer Securities,
an authenticating agent outside the United States shall authenticate and
deliver, in exchange for each portion of such global Security, an equal
aggregate Principal Amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such global
Security to be exchanged which, unless the Securities of the series are not
issuable both as Bearer Securities and as Registered Securities, as specified as
contemplated by Section 2.3(a), shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that notwithstanding the last
paragraph of this Section 2.8, no such exchanges may occur during a period
beginning at the opening of business 15 days before any selection of Securities
of that series to be redeemed and ending on the relevant Redemption Date; and
provided, further, that no Bearer Security or coupon delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any
person that is not a United States Alien or to any location in the United
States. If a Registered Security is issued in exchange for any portion of a
global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to
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the Person to whom interest in respect of such portion of such global Security
is payable in accordance with the provisions of this Indenture.
Upon the exchange of a Security in global form for Securities in definitive
form, such Security in global form shall be canceled by the Trustee. All
canceled Securities and coupons held by the Trustee shall be destroyed by the
Trustee and a certificate of their destruction delivered to the Company unless
the Company directs, by Company Order, that the Trustee shall cancel Securities
and deliver a certificate of destruction to the Company. Registered Securities
issued in exchange for a Security in global form pursuant to this Section 2.8
shall be registered in such names and in such authorized denominations as the
Depositary for such Security in global form, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Registered Securities to the persons in whose names
such Securities are so registered.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed, by the Holder thereof or his attorney duly authorized in writing.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending (except as otherwise provided in the first proviso in the
eighth paragraph of this Section 2.8) at the close of business on (A) if
Securities of the Series are issuable only as Registered Securities, the day of
the mailing of the relevant notice of redemption and (B) if Securities of the
series are issuable as Bearer Securities, the day of the first publication of
the relevant notice of redemption or, if Securities of the series are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any Registered Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption.
Section 2.9 Replacement Securities And Coupons.
If (a) any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee or paying agent outside the
United States, or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security or coupon, and
there is delivered to the Company and the Trustee such security or indemnity as
may
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be required by them to save each of them harmless, then, in the absence of
written notice to the Company, any paying agent or the Trustee that such
Security or coupon has been acquired by a bona fide purchaser, the Company shall
execute and upon its written request the Trustee or paying agent outside the
United States shall authenticate and deliver, in exchange for any such mutilated
Security or coupon or in lieu of any such destroyed, lost or stolen Security or
coupon, or in exchange for the Security to which a mutilated, destroyed, lost or
stolen coupon appertains (with all appurtenant coupons not mutilated, destroyed,
lost or stolen), a new Security of the same series and of like tenor and
Principal Amount, bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to such destroyed,
lost or stolen Security or coupon, or to the Security to which such destroyed,
lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon; provided,
however, that the Principal of and any interest on Bearer Securities shall,
except as otherwise provided in Section 4.5, be payable only at an office or
agency located outside the United States and, unless otherwise specified as
contemplated by Section 2.3(a), any interest on Bearer Securities shall be
payable only upon presentation and surrender of the coupons appertaining
thereto.
Upon the issuance of any new Securities under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security, or in exchange for a Security
to which a mutilated, destroyed, lost or stolen coupon appertains, shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security and its coupons, if any, or the
destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and
any such new Security and coupons, if any, shall be entitled to all benefits of
this Indenture equally and proportionately with any and all other Securities of
that issue and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
Section 2.10 Outstanding Securities; Determinations of Holders' Action.
Securities of any series "Outstanding" at any time are, as of the date of
determination, all the Securities of such series theretofore authenticated by
the Trustee for such series except for those canceled by it, those delivered to
it for cancellation and those described in this Section 2.10 as not outstanding.
A Security does not cease to be "Outstanding" because the Company or an
Affiliate
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thereof holds the Security; provided, however, that in determining whether the
Holders of the requisite Principal Amount of Outstanding Securities have given
or concurred in any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Articles 6 and 9). In addition,
in determining whether the Holders of the requisite Principal Amount of
Outstanding Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the Principal
Amount of a Discount Security that shall be deemed to be Outstanding shall be
the amount of the Principal thereof that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof pursuant to
Section 6.2, (ii) the Principal Amount of a Security denominated in a foreign
currency or currencies shall be the Dollar equivalent, as determined on the date
of original issuance of such Security, of the Principal Amount (or, in the case
of a Discount Security, the Dollar equivalent on the date of original issuance
of such Security of the amount determined as provided in (i) above) of such
Security.
If a Security has been paid pursuant to Section 2.9 or in exchange for or
in lieu of which another Security has been authenticated and delivered pursuant
to this Indenture, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona fide purchaser.
If the Trustee (other than the Company) holds, in accordance with this
Indenture, on a Redemption Date or on Stated Maturity, money sufficient to pay
Securities and any coupons thereto appertaining payable on that date, then on
and after that date such Securities shall cease to be outstanding and interest,
if any, on such Securities shall cease to accrue; provided, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made.
Section 2.11 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued, in
registered form or, if authorized, in bearer form with one or more coupons or
without coupons, and with such appropriate insertions, omissions, substitutions
and other variations as the Officers
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executing such Securities may determine, as conclusively evidenced by their
execution of such Securities. Such temporary Securities may be in global form.
Except in the case of Securities represented by a temporary global Security
(which shall be exchanged in accordance with the provisions of the three
succeeding paragraphs), if temporary Securities for some or all of the
Securities of any series are issued, the Company will cause definitive
Securities representing such Securities to be prepared without unreasonable
delay. Subject to Section 2.2, after the preparation of such definitive
Securities, the temporary Securities shall be exchangeable for such definitive
Securities of like tenor upon surrender of the temporary Securities at the
office or agency of the Company designated for such purpose pursuant to Section
4.5 in a Place of Payment for such series for the purpose of exchanges of
Securities of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any unmatured coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like Principal
Amount of definitive Securities of the same series and of like tenor of
authorized denominations; provided, however, that no definitive Bearer Security
or Permanent Global Bearer Security shall be delivered in exchange for a
temporary Registered Security. Until so exchanged the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Unless otherwise specified as contemplated by Section 2.3(a), if Bearer
Securities of any series are represented by a Security in temporary global form,
any such temporary global Security shall be delivered to the Depositary for the
benefit of Euroclear and CEDEL S.A. for credit to the respective accounts of the
beneficial owners of such Securities (or to such other accounts as they may
direct).
Without unnecessary delay but in any event not later than the Exchange
Date, the Company shall deliver to the Trustee or paying agent outside the
United States permanent Securities of the same series which may be in definitive
or global form at the sole discretion of the Company, in aggregate Principal
Amount equal to the Principal Amount of such temporary global Security, executed
by the Company. On or after the Exchange Date, such temporary global Security
shall be surrendered by the Depositary to the Trustee or paying agent outside
the United States, as the Company's agent for such purpose, to be exchanged, in
whole or from time to time in part, for permanent Securities of the same series
which may be in definitive or global form at the sole discretion of the Company
and of like tenor without charge and the Trustee shall authenticate and deliver,
in exchange for each portion of such temporary global Security, an equal
aggregate Principal Amount of definitive Securities or interests in Permanent
Global Bearer Security of the same series of authorized denominations and of
like tenor as the portion of such temporary global Security to be exchanged. The
permanent Securities to be delivered in exchange for any such temporary global
Security shall be in definitive bearer form or registered form, or shall be
represented by a Permanent Global Bearer Security, or any combination thereof,
as specified as contemplated by Section 2.3(a), and, if any combination thereof
is so specified, as requested by the beneficial owner thereof provided, that no
beneficial owner of a registered Temporary Global Bearer Security who is not a
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United States alien or who is located in the United States shall be entitled to
receive Bearer Securities.
Unless otherwise specified in any such Temporary Global Bearer Security,
the interest of a beneficial owner of Securities of a series represented by such
Temporary Global Bearer Security shall be exchanged for permanent Securities of
the same series which may be in definitive or global form at the sole discretion
of the Company and of like tenor following the Exchange Date when the account
holder instructs Euroclear or CEDEL S.A. as the case may be, to request such
exchange on his behalf and delivers to Euroclear or CEDEL S.A., as the case may
be, any certificate specified as contemplated by Section 2.3(a). Unless
otherwise specified in such Temporary Global Bearer Security, any such exchange
shall be made free of charge to the beneficial owners of such Temporary Global
Bearer Security, except that a person receiving permanent Securities must bear
the cost of insurance, postage, transportation and the like in the event that
such person does not take delivery of such permanent Securities in person at the
offices of Euroclear or CEDEL S.A.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as permanent Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 2.3(a), interest payable on a temporary global
Security representing a series of Bearer Securities on an Interest Payment Date
for Securities of such series occurring prior to the applicable Exchange Date
shall be payable to Euroclear and CEDEL S.A. on such Interest Payment Date, upon
delivery by Euroclear and CEDEL S.A. to a paying agent outside the United States
of any certificate specified as contemplated by Section 2.3(a), for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the persons who are the beneficial owners of such
Temporary Global Bearer Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL S.A., as the case may be, any certificate
specified as contemplated by Section 2.3(a).
Section 2.12 Cancellation.
All Securities or coupons surrendered for payment, redemption, registration
of transfer or exchange, or for credit against any sinking fund payment, shall,
if surrendered to any person other than the Trustee, be delivered to the Trustee
and all Registered Securities and matured coupons so delivered shall be promptly
canceled by it. All Bearer Securities and unmatured coupons so delivered shall
be held by the Trustee and shall be canceled. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever (including Securities received by the Company in exchange or payment
for other Securities of the Company) and may deliver to the Trustee (or to any
other person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. The
Company may not reissue, or issue new Securities to replace, Securities it has
paid or delivered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except
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as expressly permitted in the form of Securities for any particular series or as
permitted by this Indenture. All canceled Securities and coupons held by the
Trustee shall be destroyed by the Trustee in accordance with its customary
procedures and evidence of their destruction delivered to the Company unless the
Company directs, by Company Order, that the Trustee deliver canceled Securities
to the Company.
Section 2.13 Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 2.3(a) with respect to
any series of Securities, interest on any Registered Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Any interest on any Registered Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Registered Security and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities at his
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address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to
the following Clause (2).
(b) The Company may make payment of any Defaulted Interest on the
Registered Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Registered Securities may
be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 2.8, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 2.14 Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
Principal of and (except as otherwise specified as contemplated by Section
2.3(a) and subject to Section 2.8 and Section 2.13) interest on such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the absolute owner of such Bearer Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a Security in
global form or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
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Section 2.15 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.3(a) for
Securities of any series, (i) interest on any Securities which bear interest at
a fixed rate shall be computed on the basis of a 360-day year comprised of
twelve 30-day months and (ii) interest on any Securities which bear interest at
a variable rate shall be computed on the basis of the actual number of days in
an interest period divided by 360.
ARTICLE III
REDEMPTION
Section 3.1 Right to Redeem; Notices to Trustee.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 2.3(a) for Securities of any series) in
accordance with this Article.
In the case of any redemption at the election of the Company of less than
all the Securities of any series, the Company shall, within the time period set
forth below, notify the Trustee in writing of the Redemption Date, the Principal
Amount of and of any other information necessary to identify the Securities of
such series to be redeemed and the Redemption Price (including the information
set forth in clauses (4), (5) and (6) of Section 3.3).
The Company shall give the notice to the Trustee provided for in this
Section 3.1 at least 60 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee).
Section 3.2 Selection of Securities to Be Redeemed.
Unless otherwise specified as contemplated by Section 2.3(a) with respect
to any series of Securities, if less than all the Securities of any series with
the same issue date, interest rate and Stated Maturity are to be redeemed, the
Trustee shall select the particular Securities to be redeemed by a method the
Trustee considers fair and appropriate, which method may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the Principal Amount of Registered Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.
The Trustee shall make the selection not more than 60 days before the Redemption
Date from Outstanding Securities of such series not previously called for
redemption. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly in writing of the Securities to be
redeemed and, in the case of any portions of Securities to be redeemed, the
principal amount thereof to be redeemed.
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Section 3.3 Notice of Redemption.
Unless otherwise specified as contemplated by Section 2.3(a) with respect
to any series of Securities, at least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail a notice of redemption by first-class
mail, postage prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities (including CUSIP/ISIN numbers) to
be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if fewer than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
Principal Amounts) of the particular Securities to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security (or portion thereof) to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said date;
(e) the place or places where such Securities, together in the case
of Bearer Securities with all coupons appertaining thereto, if any, maturing
after the Redemption Date, are to be surrendered for payment of the Redemption
Price; and
(f) that the redemption is for a sinking fund, if such is the case.
A notice of redemption published as contemplated by Section 13.2 need not
identify particular Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense; provided, however, that, in
all cases, the text of such Company notice shall be prepared by the Company.
Section 3.4 Effect of Notice of Redemption.
Once notice of redemption is given, Securities called for redemption become
due and payable on the Redemption Date and at the Redemption Price stated in the
notice, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest and the coupons for such interest appertaining to any
Bearer Securities so to be redeemed, except to the extent provided below, shall
be void. Upon surrender of any such Security for redemption in accordance with
said notice, together with all
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coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 4.5) and, unless
otherwise specified as contemplated by Section 2.3(a), only upon presentation
and surrender of coupons for such interest; and provided, further, that, unless
otherwise specified as contemplated by Section 2.3(a), installments of interest
on Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Dates according to their terms and the provisions of
Sections 2.8 and 2.13.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and a paying agent outside the United
States if there be furnished to the Company, the Trustee and such paying agent
such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to any Paying Agent any such missing coupon in respect of which a deduction
shall have been made from the Redemption Price, such Holder shall be entitled to
receive the amount so deducted; provided, however, that interest represented by
coupons shall be payable only at an office or agency located outside the United
States (except as otherwise provided in Section 4.5) and, unless otherwise
specified as contemplated by Section 2.3(a), only upon presentation and
surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the Principal shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.
Section 3.5 Deposit of Redemption Price.
Prior to or on the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, of all Securities to be redeemed on that date
other than Securities or portions of Securities called for redemption which
prior thereto have been delivered by the Company to the Trustee for
cancellation. If such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from such trust.
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Section 3.6 Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and upon such surrender, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security a new Registered Security or Securities of the same
series and of like tenor, in an authorized denomination as requested by such
Holder, equal in aggregate Principal Amount to and in exchange for the
unredeemed portion of the Principal of the Security surrendered.
ARTICLE IV
COVENANTS
Section 4.1 Payment of Securities.
The Company shall promptly make all payments in respect of each series of
Securities on the dates and in the manner provided in the Securities and any
coupons appertaining thereto and, to the extent not otherwise so provided,
pursuant to this Indenture. An installment of Principal of or interest on the
Securities shall be considered paid on the date it is due if the Trustee or a
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date funds (in the currency or currencies of payment with respect to such
Securities) designated for and sufficient to pay such installment. Unless
otherwise specified as contemplated by Section 2.3(a) with respect to any series
of Securities, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. At the
Company's option, payments of Principal or interest may be made by check or by
transfer to an account maintained by the payee subject, in the case of Bearer
Securities, to the provisions of Section 4.5.
Section 4.2 SEC Reports.
The Company shall file with the Trustee, within 15 days after it files such
annual and quarterly reports, information, documents and other reports with the
SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall
comply with the other provisions of TIA Section 314(a).
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Section 4.3 Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year (beginning with the fiscal year ending on December 31, 1997) an
Officers' Certificate stating whether or not the signers know of any Default
that occurred during such period. If they do, such Officers' Certificate shall
describe the Default and its status.
Section 4.4 Further Instruments And Acts.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
Section 4.5 Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain (A) in the Borough of Manhattan, the City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment, where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange, purchase or redemption and where notices and demands
to or upon the Company in respect of the Securities of that series and this
Indenture may be served and where Bearer Securities of that series and related
coupons may be presented or surrendered for payment in the circumstances
described in the following paragraph (and not otherwise), (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Securities of that
series pursuant to Section 4.6), and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series located outside the
United States an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The office of the Trustee, in New York, New York, shall be such office
or agency for all of the aforesaid purposes unless the Company shall maintain
some other office or agency for such purposes and shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
other office or agency. If at any time the Company shall fail to maintain any
such required office or agency in respect of any series of Securities or shall
fail to furnish the Trustee with the address thereof, such presentations and
surrenders of Securities of that series may be made and notices and demands may
be made or served at the address of the Trustee set forth in Section 13.2,
except that Bearer Securities of that series and
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the related coupons may be presented and surrendered for payment (including
payment of any additional amounts payable on Bearer Securities of that series
pursuant to Section 4.6) at the place specified for that purpose as contemplated
by Section 2.3(a) or, if no such place is specified, at the main office of the
Trustee, and the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders, notices and demands.
No payment of Principal or interest on Bearer Securities shall be made at
any office or agency of the Company in the United States, by check mailed to any
address in the United States, by transfer to an account located in the United
States or upon presentation or surrender in the United States of a Bearer
Security or coupon for payment, even if the payment would be credited to an
account located outside the United States; provided, however, that, if the
Securities of a series are denominated and payable in Dollars, payment of
Principal of and any interest on any such Bearer Security (including any
additional amounts payable on Securities of such series pursuant to Section 4.6)
shall be made at the office of the Company's Paying Agent in the Borough of
Manhattan, The City of New York, if (but only if) payment in Dollars of the full
amount of such Principal, interest or additional amounts, as the case may be, at
all offices or agencies outside the United States maintained for such purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in accordance with the requirements set forth above for Securities of any series
for such purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
Section 4.6 Additional Amounts.
If specified as contemplated by Section 2.3(a), the Securities of a series
may provide for the payment of additional amounts, and in such case, the Company
will pay to the Holder of any Security of such series or any coupon appertaining
thereto additional amounts as provided therein. Wherever in this Indenture there
is mentioned, in any context, the payment of the Principal of or any interest
on, or in respect of, any Security of any series or payment of any related
coupon, such mention shall be deemed to include mention of the payment of
additional amounts provided for in this Section to the extent that, in such
context, additional amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
additional amounts (if applicable) in any provisions hereof shall not be
construed as excluding additional amounts in those provisions hereof where such
express mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which payment of Principal is
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made), and at least 10 days prior to each date of payment of Principal and any
interest if there has been any change with respect to the matters set forth in
the below-mentioned Officers' Certificate, the Company will furnish the Trustee
and the Company's Paying Agent or Paying Agents, if other than the Trustee, with
an Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of Principal of and any interest on the Securities
of that series shall be made to Holders of Securities of that series or any
related coupons who are United States Aliens without withholding for or on
account of any tax, assessment or other governmental charge described in the
Securities of that series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities or coupons and the
Company will pay to the Trustee or such Paying Agent the additional amounts
required by the Securities of such series and this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge or Transfer Assets.
The Company, in a single transaction or through a series of related
transactions, shall not consolidate with or merge with or into any other person
or convey or transfer (by lease, assignment, sale or otherwise) all or
substantially all of its properties and assets to another person or group of
affiliated persons, unless:
(a) either (1) the Company shall be the continuing corporation or (2)
the person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which all or substantially all of the
properties and assets of the Company are conveyed or transferred (i) shall be a
corporation, partnership, limited liability company or trust organized and
validity existing under the laws of the United States or any state thereof or
the District of Columbia and (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, all of the obligations of the Company under the Securities and
this Indenture;
(b) immediately after giving effect to such transaction and the
assumption contemplated by clause (a)(ii), above, no Default or Event of Default
shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance or transfer and, if a supplemental indenture is required in
connection with such transaction, such supplemental
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indenture, comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been satisfied.
For purposes of the foregoing, the conveyance or transfer (by lease,
assignment, sale or otherwise) of the properties and assets of one or more
Subsidiaries (other than to the Company or another wholly owned Subsidiary),
which, if such assets were owned by the Company, would constitute all or
substantially all of the properties and assets of the Company, shall be deemed
to be the conveyance or transfer of all or substantially all of the properties
and assets of the Company.
The successor person formed by such consolidation or into which the Company
is merged or the successor person to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of the Company under this Indenture with the same effect as if such successor
had been named as the Company herein; and thereafter, except in the case of a
lease of its properties and assets substantially as an entirety, the Company
shall be discharged from all obligations and covenants under this Indenture, the
Securities and coupons. The Trustee shall enter into a supplemental indenture
to evidence the succession and substitution of such successor person and such
discharge and release of the Company.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
Unless otherwise specified as contemplated by Section 2.3(a) with respect
to any series of securities, an "Event of Default" occurs, with respect to each
series of the Securities individually, if:
(a) the Company defaults in (a) the payment of the principal of any
Security of such series at its Maturity or (b) the payment of any interest upon
any Security of such series when the same becomes due and payable and
continuance of such default for a period of 30 days;
(b) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in clause (1) above
and other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has been
expressly included in this Indenture solely for the benefit of a series of
Securities other than such series) and such failure continues for 60 days after
receipt by the Company of a Notice of Default;
(c) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Bankruptcy Law or (b) a
decree or order adjudging the Company bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company
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under any applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the wind up or
liquidation of its affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be unstayed
and in effect, for a period of 60 consecutive days;
(d) (a) the Company commences a voluntary case or proceeding under any
applicable Bankruptcy Law or any other case or proceeding to be adjudicated
bankrupt or insolvent, (b) the Company consents to the entry of a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, (c) the Company files a petition or
answer or consent seeking reorganization or substantially comparable relief
under any applicable federal state law, (d) the Company (x) consents to the
filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, (y) makes an
assignment for the benefit of creditors or (z) admits in writing its inability
to pay its debts generally as they become due or (e) the Company takes any
corporate action in furtherance of any such actions in this clause (4); or
(e) any other Event of Default provided with respect to Securities of
that series.
"Bankruptcy Law" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors. "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of such series notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (2) above after receipt of such notice. Any
such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
Section 6.2 Acceleration.
If an Event of Default with respect to Securities of any series at the time
Outstanding (other than an Event of Default specified in Section 6.1(3) or (4))
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in aggregate Principal Amount of the Outstanding Securities of
that series by notice to the Company and the Trustee, may declare the Principal
Amount (or, if any of the Securities of that series are Discount Securities,
such portion of the Principal Amount of such Securities as may be specified in
the terms thereof) of all the Securities of that series to be immediately due
and payable. Upon such a declaration, such Principal (or portion thereof) shall
be due and payable immediately. If an Event of Default specified in Section
6.1(3) or (4) occurs and is continuing, the Principal (or portion thereof) of
all the Securities of that series shall
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become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholders. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series, by
notice to the Trustee (and without notice to any other Securityholder) may
rescind an acceleration with respect to that series and its consequences if the
rescission would not conflict with any judgment or decree and all existing
Events of Default with respect to Securities of such series have been cured or
waived except nonpayment of the Principal (or portion thereof) of Securities of
such series that has become due solely as a result of such acceleration and if
all amounts due to the Trustee under Section 7.7 have been paid. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
Section 6.3 Other Remedies.
If an Event of Default with respect to a series of Outstanding Securities
occurs and is continuing, the Trustee may pursue any available remedy to (a)
collect the payment of the whole amount then due and payable on such Securities
for Principal and interest, with interest upon the overdue Principal and, to the
extent that payment of such interest shall be legally enforceable, upon overdue
installments of interest from the date such interest was due, at the rate or
rates prescribed therefor in such Securities and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including amounts due the Trustee under Section 7.7 or (b) enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or coupons or does not produce any of the Securities or
coupons in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 6.4 Waiver of Past Defaults.
The Holders of a majority in aggregate Principal Amount of the Outstanding
Securities of any series, by notice to the Trustee (and without notice to any
other Securityholder), may on behalf of the Holders of all the Securities of
such series and any related coupons waive an existing Default with respect to
such series and its consequences except (1) an Event of Default described in
Section 6.1(1) with respect to such series or (2) a Default in respect of a
provision that under Section 9.2 cannot be amended without the consent of the
Holder of each Outstanding Security of such series affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
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Section 6.5 Control by Majority.
The Holders of a majority in aggregate Principal Amount of the Outstanding
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee with respect to the Securities of such series.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability.
Section 6.6 Limitation on Suits.
A Holder of any Security of any series or any related coupons may not
pursue any remedy with respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default with respect to the Securities of that series is continuing;
(b) the Holders of at least 25% in aggregate Principal Amount of the
Outstanding Securities of that series make a written request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense satisfactory to the Trustee;
(d) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity; and
(e) the Holders of a majority in aggregate Principal Amount of the
Outstanding Securities of that series do not give the Trustee a direction
inconsistent with such request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right, which is
absolute and unconditional, of any Holder of any Security or coupon to receive
payment of the Principal of and (subject to Section 2.13) interest on such
Security or payment of such coupon on the Stated Maturity or Maturities
expressed in such Security or coupon (or, in the case of redemption, on the
Redemption Date) held by such Holder, on or after the respective due dates
expressed in the Securities or any Redemption Date, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected adversely without the consent of each such Holder.
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Section 6.8 Collection Suit by Trustee.
If an Event of Default described in Section 6.1(1) with respect to
Securities of any series occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to such series of Securities and the
amounts provided for in Section 7.7.
Section 6.9 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue Principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of Principal and
interest owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amount due the Trustee under Section 7.7) and of the Holders of Securities and
coupons allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any Custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder of Securities and
coupons to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders of
Securities and coupons, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Indebtedness to authorize or consent to or accept or adopt on
behalf of any Holder of a Security or coupon any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or coupons or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of a Security or coupon in any such proceeding.
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Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order and, in case of the distribution of such
money on account of Principal or interest, upon presentation of the Securities
or coupons, or both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness as provided in Article XII;
THIRD: to Securityholders for amounts due and unpaid for the Principal
and interest on the Securities and interest evidenced by coupons in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities and coupons for Principal and interest, respectively;
and
FOURTH: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
Section 6.11 Undertaking For Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
(other than the Trustee) in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in
aggregate Principal Amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder of any Security or coupon for the enforcement
of the payment of the Principal of or interest on any Security or the payment of
any coupon on or after the Stated Maturity or Maturities expressed in such
Security or coupon (or, in the case of redemption, on or after the Redemption
Date).
Section 6.12 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force,
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which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect
to Securities of any series:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
with respect to any certificates or opinions specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(iii) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.1.;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received
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by it pursuant to Section 6.5 or exercising any trust or power
conferred upon the Trustee under this Indenture.
(c) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(d) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(e) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall not be liable for any interest on any money received by it except as the
Trustee may otherwise agree with the Company.
Section 7.2 Rights of Trustee.
The Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(a) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(b) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(c) Subject to the provisions of Section 7.1 (c), the Trustee shall
not be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
(d) Subject to the provisions Section 7.1, the Trustee may rely and
shall be protected in acting or refraining from acting upon any resolution,
Officers' Certificate, Opinion of Counsel (or both), Company Order or any other
certificate, statement, instrument, opinion report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper believed to be
genuine and to have been signed or presented by the proper party or parties.
(e) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Company.
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(f) The Trustee may consult with counsel and any written advice or
Opinion of Counsel shall, subject to the provisions of Section 7.1, be full and
complete authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel.
(g) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby.
(h) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security or other
paper or document unless requested in writing to do so by the Holders of not
less than a majority in the aggregate principal amount of the Securities of such
series then Outstanding; provided, that, if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of any such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such
expense or liabilities as a condition to proceeding; the reasonable expense of
every such investigation shall be paid by the Company or, if paid by the Trustee
or any predecessor trustee, shall be repaid by the Company upon demand.
(i) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
Section 7.3 Individual Rights of Trustee, Etc.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities or coupons and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar or co-registrar or any other agent of the Company may do
the same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
Section 7.4 Trustee's Disclaimer.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or adequacy of this Indenture
or the Securities or coupons. The Trustee shall not be accountable for
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the Company's use of the proceeds from the Securities and, shall not be
responsible for any statement in the registration statement for the Securities
under the Securities Act of 1933, as amended, or in the Indenture or the
Securities or any coupons (other than its certificate of authentication) or for
the determination as to which beneficial owners are entitled to receive any
notices hereunder.
Section 7.5 Notice of Defaults.
If a Default with respect to the Securities of any series occurs and is
continuing and if it is known to the Trustee, the Trustee shall give to each
Holder of Securities of such series notice of such Default in the manner set
forth in TIA Section 315(b) within 90 days after it occurs. Except in the case
of a Default described in Section 6.1(1) with respect to any Security of such
series or a Default in the payment of any sinking fund installment with respect
to any Security of such series, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of the Holders of Securities of such
series.
Section 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Holder of Securities a
brief report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b) and (c).
A copy of each report at the time of its mailing to Holders of Securities
shall be filed with the SEC and each stock exchange on which the Securities of
that series may be listed. The Company agrees to notify the Trustee whenever
the Securities of a particular series become listed on any stock exchange and of
any delisting thereof.
Section 7.7 Compensation And Indemnity.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
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(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
the Principal of or interest, if any, on particular Securities or for the
payment of particular coupons.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(3) or (4), the expenses are
intended to constitute expenses of administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company; provided, however, no
such resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.8. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series at the
time outstanding may remove the Trustee with respect to the Securities of such
series by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the Trustee or its
property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, with respect to the Securities of one or more series,
the Company shall promptly appoint, by resolution of its Board of Directors, a
successor Trustee with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any series).
In the case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee shall
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become effective and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Holders of Securities of the particular series with
respect to which such successor Trustee has been appointed. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 7.7.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-Trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject,
nevertheless, to its lien, if any, provided for in Section 7.7.
If a successor Trustee with respect to the Securities of any series does
not take office within 30 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
Principal Amount of the Outstanding Securities of such series at the time
outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of a Security
of such series may petition any court of competent jurisdiction for the removal
of such Trustee and the appointment of a successor Trustee.
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Section 7.9 Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1) and 310(a)(5). The Trustee shall have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA Section 310(b), including the
optional provision permitted by the second sentence of TIA Section 310(b)(9). In
determining whether the Trustee has conflicting interests as defined in TIA
Section 310(b)(1), the provisions contained in the proviso to TIA Section
310(b)(1) shall be deemed incorporated herein.
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VII
SATISFACTION AND DISCHARGE
Section 8.1 Discharge of Liability on Securities.
Except as otherwise contemplated by Section 2.3(a), when (a) the Company
delivers to the Trustee all Outstanding Securities or all Outstanding Securities
of any series, as the case may be, theretofore authenticated and delivered and
all coupons, if any, appertaining thereto (other than (i) coupons appertaining
to Bearer Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has been waived
as provided in Section 2.8, (ii) Securities or Securities of such series, as the
case may be, and coupons, if any, which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.9, (iii) coupons, if
any, appertaining to Securities or Securities of such series, as the case may
be, called for redemption and maturing after the relevant Redemption Date, whose
surrender has been waived as provided in Section 3.4, and (iv) Securities or
Securities of such series, as the case may be, and coupons, if any, for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 2.4) for cancellation or (b) all Outstanding
Securities have become due and payable and the Company deposits with the Trustee
cash sufficient to pay at Stated Maturity the Principal Amount of all Principal
of and interest on Outstanding Securities or all Outstanding Securities of such
series (other than Securities replaced pursuant to Section 2.9), and
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if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 7.7, cease to be of
further effect as to all Outstanding Securities or all Outstanding Securities of
any series, as the case may be. The Trustee shall join in the execution of a
document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
Section 8.2 Repayment to The Company.
The Trustee and the Paying Agent shall return to the Company on Company
Request any money held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years; provided, however, that the
Trustee or such Paying Agent, before being required to make any such return, may
at the expense and direction of the Company cause to be published once in an
Authorized Newspaper in each Place of Payment of or mail to each such Holder
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed money then remaining wilt be returned to the Company.
After return to the Company, Holders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person.
Section 8.3 Option to Effect Defeasance or Covenant Defeasance.
Unless otherwise specified as contemplated by Section 2.3(a) with respect
to Securities of a particular series, the Company, may at its option, by Board
Resolution, at any time, with respect to any series of Securities, elect to have
either Section 8.4 or Section 8.5 be applied to all of the outstanding
Securities of any series (the "Defeased Securities"), upon compliance with the
conditions set forth below in Article VIII.
Section 8.4 Defeasance And Discharge.
Upon the Company's exercise under Section 8.3 of the option applicable to
this Section 8.2, the Company shall be deemed to have been discharged from its
obligations with respect to the Defeased Securities on the date the conditions
set forth below are satisfied (hereinafter "Defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the defeased Securities, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Sections 2.4,
2.5,2.6, 2.9, 2.11, 2.12, 4.1, 4.5, 6.6, 6.7, 7.7, 7.8 and 8.2 of this Indenture
and to have satisfied all its other obligations under such series of Securities
and this Indenture insofar as such series of Securities are concerned (and the
Trustee, at the expense of the Company, and, upon written request, shall execute
proper instruments acknowledging the same). Subject to compliance with this
Article VIII, the Company may exercise its option under this Section 8.4
notwithstanding the prior exercise of its option under Section 8.5 with respect
to a series of Securities.
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Section 8.5 Covenant Defeasance.
Upon the Company's exercise under Section 8.3 of the option applicable this
Section 8.5, the Company shall be released from its obligations under Sections
4.2 and 4.3 and Article V and such other provisions as may be provided as
contemplated by Section 2.3(a) with respect to Securities of a particular series
and with respect to the Defeased Securities on and after the date the conditions
set forth below are satisfied (hereinafter "Covenant Defeasance"), and the
Defeased Securities shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences if any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
Article, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or Article or by reason of any reference in any such
Section or Article to any other provisions herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.1 but, except as specified above, the remainder of this
Indenture and such Defeased Securities shall be unaffected thereby.
Section 8.6 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 8.4
or Section 8.5 to a series of outstanding Securities.
(a) The Company shall have irrevocably deposited with the Trustee, in
trust, (i) sufficient funds in the currency or currency unit in which the
Securities of such series are denominated to pay the Principal of and interest
to Stated Maturity (or redemption) on, the Debt Securities of such series, or
(ii) such amount of direct obligations of, or obligations the principal of and
interest on which are fully guaranteed by, the government which issued the
currency in which the Securities of such series are denominated, and which are
not subject to prepayment, redemption or call, as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the Principal of, and
interest to Stated Maturity (or redemption) on, the Debt Securities of such
series.
(b) The Company shall (i) have delivered an opinion of counsel that
the Holders of the Securities of such series will not recognize income, gain or
loss for United States Federal income tax purposes as a result of such
defeasance, and will be subject to tax in the same manner as if no defeasance
and discharge or covenant defeasance, as the case may be, had occurred or (ii)
in the case of an election under Section 8.4 the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date this Indenture was first executed, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel in the United States shall
confirm that, the holders
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of Outstanding Securities of that particular series will not recognize income,
gain or loss for federal income tax purposes as a result of such defeasance.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(b) to add to the covenants, agreements and obligations of the Company
for the benefit of the Holders of all of the Securities or any series thereof,
or to surrender any right or power herein conferred upon the Company; or
(c) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registerable as to Principal, to change or
eliminate any restrictions (including restrictions relating to payment in the
United States) on the payment of Principal of or any premium or interest on
Bearer Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in exchange for
Bearer Securities of other authorized denominations or to permit the issuance of
Securities in uncertificated form; or
(d) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.1 and 2.3(a), respectively; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section 7.8;
or
(f) to cure any ambiguity, defect or inconsistency; or
(g) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or more series
of Securities), provided that any such addition, change or elimination shall
neither (A) apply to any Security of any series created prior to the execution
of such supplemental indenture and entitled to the benefit of such provision nor
(B) modify the rights of the Holder of any such Security with respect to such
provision; or
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(h) to secure the Securities; or
(i) to make any other change that does not adversely affect the rights
of any Securityholder.
Section 9.2 Supplemental Indentures With Consent of Holders.
With the written consent of the Holders of at least a majority in aggregate
Principal Amount of the Outstanding Securities of each series affected by such
supplemental indenture, the Company and the Trustee may amend this Indenture or
the Securities of any series or may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of the Securities of such
series and any related coupons under this Indenture; provided, however, that no
such amendment or supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the Principal of, or any installment
of Principal or interest on, any such Security, or reduce the Principal Amount
thereof or the rate of interest thereon or any premium payable upon redemption
thereof or reduce the amount of Principal of any such Discount Security that
would be due and payable upon a declaration of acceleration of maturity thereof
pursuant to Section 6.2, or change the Place of Payment, or change the coin or
currency in which, any Principal of, or any installment of interest on, any such
Security is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(b) reduce the percentage in Principal Amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
amendment or supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) with respect to the
Securities of such series provided for in this Indenture;
(c) make any change in the terms of the Subordination of the
Securities in a manner adverse to the Holders of any series of outstanding
Securities; or
(d) modify any of the provisions of this Section, Section 6.4 or 6.7,
except to increase the percentage of Outstanding Securities of such series
required for such actions to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with
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respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for the consent of the Holders under this Section
9.2 to approve the particular form of any proposed amendment or supplemental
indenture, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment or supplemental indenture under this Section 9.2 becomes
effective, the Company shall mail to each Holder of the particular Securities
affected thereby a notice briefly describing the amendment.
Section 9.3 Compliance With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall comply
with the TIA as then in effect.
Section 9.4 Revocation And Effect of Consents, Waivers And Actions.
Until an amendment or waiver with respect to a series of Securities becomes
effective, a consent to it or any other action by a Holder of a Security of that
series hereunder is a continuing consent by the Holder and every subsequent
Holder of that Security or portion of that Security that evidences the same
obligation as the consenting Holder's Security, even if notation of the consent,
waiver or action is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the Company or an agent of the Company certifies to the
Trustee that the consent of the requisite aggregate Principal Amount of the
Securities of that series has been obtained. After an amendment, waiver or
action becomes effective, it shall bind every Holder of Securities of that
series.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver with respect to a series of Securities. If a record date is fixed, then
notwithstanding the first two sentences of the immediately preceding paragraph,
those persons who were Holders of Securities of that series at such record date
(or their duly designated proxies), and only those persons, shall be entitled to
revoke any consent previously given, whether or not such persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date.
Section 9.5 Notation on or Exchange of Securities.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture with respect to such series pursuant to this Article
may, and shall if required by the Trustee, bear a notation in form approved by
the Trustee as to any matter provided for in such supplemental indenture. If
the Company shall so determine, new Securities of such series so
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modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities of that series.
Section 9.6 Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing such amendment, the Trustee shall be entitled to
receive, and (subject to the provisions of Section 7.1) shall be fully protected
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
Section 9.7 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby, except to the extent otherwise set forth thereon.
ARTICLE X
SINKING FUNDS
Section 10.1 Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 2.3(a) for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "Mandatory Sinking Fund
Payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "Optional Sinking
Fund Payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 10.2. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of the Securities of
such series.
Section 10.2 Satisfaction of Sinking Fund Payments With Securities.
The Company (1) may deliver Outstanding Securities of a series with the
same issue date, interest rate and Stated Maturity (other than any previously
called for redemption), together in the case of any Bearer Securities of such
series with the same issue date, interest rate and Stated
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Maturity with all unmatured coupons appertaining thereto, and (2) may apply as a
credit Securities of a series with the same issue date, interest rate and Stated
Maturity which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any mandatory sinking fund payment with
respect to the Securities of such series with the same issue date, interest rate
and Stated Maturity; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
Section 10.3 Redemption of Securities For Sinking Fund.
Not less than 60 days (or such shorter period as shall be acceptable to the
Trustee) prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 10.2 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 30 days before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.2 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 3.3. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections 3.4
and 3.6.
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
Section 11.1 Purposes For Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
Section 11.2 Call, Notice And Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 11.1, to be held
at such time and at such place in the Borough of Manhattan, The City of New York
or, for a series of Securities issued as Bearer Securities, as the Trustee shall
determine or, with the approval of the Company, at any other place.
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Notice of every meeting of Holders of Securities of any series, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given, in the manner provided in Section
13.2, not less than 21 nor more than 180 days prior to the date fixed for the
meeting.
(b) In case at any time the Company or the Holders of at least 10% in
Principal Amount of the Outstanding Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 11.1, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities of such series in the amount above specified, as the
case may be, may determine the time and the place in the Borough of Manhattan,
The City of New York, or for a series of Securities issued as Bearer Securities,
in such other place as shall be determined and approved by the Company, for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section 11.2.
Section 11.3 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 11.4 Quorum; Action.
The persons entitled to vote a majority in Principal Amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case, the meeting may be adjourned for a period determined by the
chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period determined by the chairman of the meeting prior
to the adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 11.2(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
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Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in Principal Amount of the Outstanding Securities of that series; provided,
however, that, except as limited by the proviso to Section 9.2, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in Principal Amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in Principal Amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Section 11.5 Determination of Voting Rights; Conduct And Adjournment of
Meetings.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 11.7 and the
appointment of any proxy shall be proved in the manner specified in Section 11.7
or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 11.7 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 11.7 or other proof.
(a) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 11.2(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the persons entitled to vote a majority in Principal Amount of the
Outstanding Securities of such series represented at the meeting.
(b) At any meeting each Holder of a Security of such series or proxy
shall be entitled to vote with respect to the Outstanding Securities of such
series held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect to any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
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chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.
(c) Any meeting of Holders of Securities of any series duly called
pursuant to Section 11.2 at which a quorum is present may be adjourned from time
to time by persons entitled to vote a majority in Principal Amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 11.6 Counting Votes And Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed signatures of the Holders of Securities of such series or of their
representatives by proxy and the Principal Amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 11.2 and, if
applicable, Section 11.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 11.7 Actions of Holders Generally.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
If Securities of a series are issuable as Bearer Securities, any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of this
Article, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Proof of execution
of any such instrument or of a writing appointing any such agent, or of the
holding by any person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 7.1) conclusive in favor
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of the Trustee and the Company, if made in the manner provided in this Section.
The record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 11.6.
(a) The fact and date of the execution by any person of any such
instrument or writing, or the authority of the persons executing the same, may
be proved in any reasonable manner which the Trustee deems sufficient.
(b) The Principal Amount and serial numbers of Registered Securities
held by the person, and the date of holding the same, shall be proved by the
books of the Registrar.
(c) The Principal Amount and serial numbers of Bearer Securities held
by any person, and the date of holding the same, may be proved by the production
of such Bearer Securities or by a certificate executed by any trust company,
bank, banker or other depositary, wherever situated, as depositary, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The Principal Amount and
serial numbers of Bearer Securities held by any person, and the date of holding
the same, may also be proved in any other manner which the Trustee deems
sufficient.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Holder of any Security in accordance with this
Section shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other act in accordance
with this Section, the Company may, at its option, by or pursuant to an
Officers' Certificate delivered to the Trustee, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or such other act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite percentage of
Outstanding Securities or Outstanding Securities of a series, as the case may
be, have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other act, and for that
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purpose the Outstanding Securities or Outstanding Securities of the series, as
the case may be, shall be computed as of such record date; provided, that no
such authorization, agreement or consent by the Holders on the record date shall
be deemed effective unless such request, demand, authorization, direction,
notice, consent, waiver or other act shall become effective pursuant to the
provisions of clause (a) of this Section 11.7 not later than six months after
the record date.
ARTICLE XII
SUBORDINATION
Section 12.1 Securities Subordinate to Senior Indebtedness.
Unless otherwise specified as contemplated by Section 2.3(a), the
Securities shall be subordinated to Senior Indebtedness as set forth in this
Article XII. The Company covenants and agrees, and each Holder of a Security of
any series by such Holder's acceptance thereof likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Article XII,
the indebtedness represented by the Securities and the payment of the Principal
Amount, interest and such other amounts as provided for in Section 2.3(a), if
any, in respect of each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any Bankruptcy Law, but only to the extent
allowed or permitted to the holder of such Debt of the Company against the
bankruptcy or any other insolvency estate of the Company in such proceeding) and
other amounts due on or in connection with any Debt of the Company incurred,
assumed or guaranteed by the Company, whether outstanding on the date of the
Indenture or thereafter incurred, assumed or guaranteed and all renewals,
extensions and refundings of any such Debt of the Company; provided, however,
that the following will not constitute Senior Indebtedness:
(a) any Debt of the Company as to which, in the instrument creating
the same or evidencing the same or pursuant to which the same is outstanding, it
is expressly provided that such Debt of the Company shall be subordinated to any
other Debt of the Company, unless such Debt of the Company expressly provides
that such Debt of the Company shall be senior in right of payment to the
Securities;
(b) any Debt of the Company which by its terms states that such Debt
of the Company shall not be senior in right of payment to the Securities;
(c) Debt of the Company in respect of the Securities; and
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(d) any Debt of the Company to any Affiliate of the Company or a
Subsidiary of the Company.
Section 12.2 Payment Over of Proceeds Upon Dissolution, Etc.
Upon any distribution of assets of the Company in the event of:
(a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or
(b) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of the Company, then and in such event
(i) the holders of Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision shall be made for such
payment in cash, before the Holders of the Securities are entitled to
receive any payment on account of the Principal Amount, interest or such
other amounts as may be provided for in Section 2.3(a), if any, in respect
of the Securities; and
(ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article XII, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other Debt of the Company being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other
person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the principal of, and premium, if any, and interest on the
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this Section
12.2, the Trustee or the Holder of any Security shall receive any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other Debt of the
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Company being subordinated to the payment of the Securities, before all Senior
Indebtedness is paid in full or payment thereof provided for, and if such fact
shall then have been made known to the Trustee as provided in Section 12.10, or,
as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article XII only, the words "Cash, Property or
Securities," or any combination thereof, shall not be deemed to include shares
of Capital Stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinated, at least to the extent
provided in this Article XII with respect to the Securities, to the payment of
all Senior Indebtedness which may at the time be outstanding; provided, however,
that (i) Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of the Senior Indebtedness are not, without the consent of such
holders, altered, in any manner adverse to such holders, by such reorganization
or readjustment.
The consolidation of the Company with, or the merger of the Company into,
another corporation or the liquidation or dissolution of the Company following
the conveyance or transfer of all or substantially all of its assets to another
person upon the terms and conditions set forth in Article V shall not be deemed
a dissolution, winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of the Company for
the purposes of this Section 12.2 if the corporation formed by such
consolidation or into which the Company is merged or the person which acquires
by conveyance or transfer all or substantially all of the assets of the Company,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article V.
Section 12.3 Acceleration of Securities.
In the event that any Securities are declared due and payable before their
Stated Maturity pursuant to Section 6.2, then and in such event the Company
shall promptly notify holders of Senior Indebtedness of such acceleration. The
Company may not pay the Securities until 120 days have passed after such
acceleration occurs and may thereafter pay the Securities if this Article XII
permits the payment at that time.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Securities prohibited by the
foregoing provisions of this Section 12.3, and if such facts then shall have
been known or thereafter shall have been made known to the Trustee (as provided
in Section 12.10) or to such Holder, as the case may be, pursuant to the terms
of this Indenture, then and in such event such payment shall be paid over and
delivered forthwith
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to the Company by or on behalf of the person holding such payment for the
benefit of the holders of Senior Indebtedness.
The provisions of this Section 12.3 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
Section 12.4 Default in Senior Indebtedness.
The Company may not make any payment of the Principal Amount, interest or
other such amounts as may be provided for in Section 2.3(a), if any, in respect
of the Securities and may not acquire any Securities for cash or property (other
than for Capital Stock of the Company) if:
(a) a default on Senior Indebtedness occurs and is continuing that
permits holders of such Senior Indebtedness to accelerate its maturity; and
(b) the default is the subject of judicial proceedings or the Company
receives a notice of default thereof from any person who may give such notice
pursuant to the instrument evidencing or document governing such Senior
Indebtedness. If the Company receives any such notice, then a similar notice
received within nine months thereafter relating to the same default on the same
issue of Senior Indebtedness shall not be effective for purposes of this Section
12.4.
The Company may resume payments on the Securities and may acquire
Securities if and when:
(A) the default is cured or waived; or
(B) 120 or more days pass after the receipt by the
Company of the notice described in clause (2) above and the default is
not then the subject of judicial proceedings; and this Article XII
otherwise permits the payment or acquisition at that time.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 12.4, and if such fact then shall have been
known or thereafter shall have been made known to the Trustee as provided in
Section 12.10 or such Holder, as the case may be, pursuant to the terms of this
Indenture, then and in such event such payment shall be paid over and delivered
forthwith to the Company by or on behalf of the person holding such payment for
the benefit of the holders of the Senior Indebtedness.
The provisions of this Section 12.4 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
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Section 12.5 Payment Permitted If No Default.
Nothing contained in this Article XII or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 12.2 or under the conditions
described in Section 12.3 or 12.4, from making payments at any time of the
Principal Amount, interest or such other amounts as may be provided for in
Section 2.3(a), if any, as the case may be, in respect of the Securities, or (b)
the application by the Trustee or the retention by any Holder of any money
deposited with it hereunder to the payment of or on account of the Principal
Amount, interest or such other amounts as may be provided for in Section 2.3(a),
if any, as the case may be, in respect of the Securities if the Trustee did not
have, at the time provided in the proviso to the first paragraph of Section
12.10, notice that such payment would have been prohibited by the provisions of
this Article XII.
Section 12.6 Subrogation Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article XII to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities applicable to the Senior Indebtedness until the Principal Amount,
interest or such other amounts as provided for in Section 2.3(a), if any, as the
case may be, in respect of the Securities shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article XII, and no payments pursuant to the provisions of this Article XII to
the Company or to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, be deemed
to be a payment or distribution by the Company to or on account of the Senior
Indebtedness.
Section 12.7 Provision Solely to Define Relative Rights.
The provisions of this Article XII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on one
hand, and the holders of Senior Indebtedness, on the other hand. Nothing
contained in this Article XII or elsewhere in this Indenture or in the
Securities is intended to or shall:
(a) impair, as between the Company and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders of the Securities the Principal Amount, interest or such other
amounts as may be provided for in Section 2.3(a), if any, as the case may be, in
respect of the Securities as and when the same shall become due and payable in
accordance with the terms of the Securities and this Indenture and which,
subject to
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the rights under this Article XII of the holders of Senior Indebtedness, is
intended to rank equally with all other general obligations of the Company; or
(b) affect the relative rights against the Company of the Holders of
the Securities and creditors of the Company other than holders of Senior
Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of Senior Indebtedness to receive cash, property or securities otherwise payable
or deliverable to the Trustee or such Holder.
Section 12.8 Trustee to Effectuate Subordination.
Each Holder of a Security by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Section 12.9 No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of, or notice to, the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article XII or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise dispose
of any property pledged, mortgaged or otherwise securing Senior Indebtedness;
(iii) release any person liable in any manner for the collection of Senior
Indebtedness and (iv) exercise or refrain from exercising any rights against the
Company or any other person.
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Section 12.10 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Failure to give such notice shall not
affect the subordination of the Securities to Senior Indebtedness.
Notwithstanding the provisions of this Article XII or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment to or by the Trustee
in respect of the Securities, unless and until the Trustee shall have received
written notice thereof at the address specified in Section 13.2 from the Company
or a holder of Senior Indebtedness or from any trustee or agent therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.1, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if a Trust Officer of the Trustee
shall not have received, at least three Business Days prior to the date upon
which by the terms hereof any such money may become payable for any purpose
(including, without limitation, the payment of the Principal Amount, interest or
such other amounts as may be provided for in Section 2.3(a), if any, as the case
may be, in respect of any Security), the notice with respect to such money
provided for in this Section 12.10, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.
Subject to the provisions of Section 7.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a person representing himself
to be a holder of Senior Indebtedness (or a trustee or agent on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee or agent on behalf of any such holder). In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article XII, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such person pursuant to the terms of this Indenture pending judicial
determination as to the right of such person to receive such payment.
Section 12.11 Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article XII, the Trustee, subject to the provisions of Section 7.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit
of creditors, agent or other person making such payment
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or distribution, delivered to the Trustee or to the Holders of Securities, for
the purpose of ascertaining the persons entitled to participate in such payment
or distribution, the holders of Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XII.
Section 12.12 Trustee Not Fiduciary For Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
XII or otherwise. The Trustee shall not be charged with knowledge of the
existence of Senior Indebtedness or of any facts that would prohibit any payment
hereunder unless a Trust Officer of the Trustee shall have received notice to
that effect at the address of the Trustee set forth in Section 13.2. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article XII and no implied covenants or obligations with respect
to holders of Senior Indebtedness shall be read into this Indenture against the
Trustee.
Section 12.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII with respect to any Senior Indebtedness which may
at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article XII shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
Section 12.14 Article XII Applicable to Paying Agents.
The term "Trustee" as used in this Article XII shall (unless the context
otherwise requires) be construed as extending to and including the Paying Agent
within its meaning as fully for all intents and purposes as if the Paying Agent
were named in this Article XII in addition to or in place of the Trustee;
provided, however, that Sections 12.10 and 12.12 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
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ARTICLE XII
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
the TIA, the required provision shall control.
Section 13.2 Notices.
Any notice or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid; provided, that any notice or
communication by and among the Trustee and the Company may be made by telecopy
or other commercially accepted electronic means and shall be effective upon
receipt thereof and shall be confirmed in writing, mailed by first-class mail,
postage prepaid, addressed as follows:
If to the Company:
Mail-Well, Inc.
23 Inverness Way, Suite 160
Englewood, Colorado 80112
Attention: Chief Financial Officer
If to the Trustee:
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder of Registered Securities
shall be mailed to such Security holder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed. Notice shall be sufficiently
given to Holders of Bearer Securities if published in an Authorized Newspaper in
The City of New York and in such other city or cities as may be specified in
such Securities on a
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Business Day at least twice, the first such publication to be not earlier than
the earliest date, and not later than the latest date, prescribed for the giving
of such notice.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Holders of
Securities of the same series. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not received by the
addressee.
If the Company mails a notice or communication to the Holders of Securities
of a particular series, it shall mail a copy to the Trustee and each Registrar,
co-registrar or Paying Agent, as the case may be, with respect to such series.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give notice to Holders of
Registered Securities by mail, then such notification as shall be made with the
acceptance of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
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Section 13.3 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company and the Trustee, the Registrar or the Paying Agent with
respect to a particular series of Securities, and anyone else, shall have the
protection of TIA Section 312(c).
Section 13.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.5 Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a covenant or condition provided for in this Indenture shall include:
(a) statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
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Section 13.6 Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.7 Rules by Trustee, Paying Agent and Registrar.
With respect to the Securities of a particular series, the Trustee with
respect to such series of Securities may make reasonable rules for action by or
a meeting of Holders of such series of Securities. With respect to the
Securities of a particular series, the Registrar and the Paying Agent with
respect to such series of Securities may make reasonable rules for their
functions.
Section 13.8 Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any specified
date (including an Interest Payment Date, Redemption Date or Stated Maturity of
any Security, or a date for giving notice) is a Legal Holiday at any Place of
Payment or place for giving notice, then (notwithstanding any other provision of
this Indenture or of the Securities or coupons other than a provision in the
Securities of any series which specifically states that such provision shall
apply in lieu of this Section) payment of interest or Principal need not be made
at such Place of Payment, or such other action need not be taken, on such date,
but the action shall be taken on the next succeeding day that is not a Legal
Holiday at such Place of Payment with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity or such
other date and to the extent applicable no Original Issue Discount or interest,
if any, shall accrue for the intervening period.
Section 13.9 Governing Law and Jurisdiction.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY, THE TRUSTEE, AND EACH HOLDER OF A SECURITY (BY
ACCEPTANCE THEREOF) THEREBY, (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO
THIS INDENTURE, (II) IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION IN SUCH SUITS AND (III) IRREVOCABLY WAIVES TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT
IN THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW
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YORK AND (C) THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
Section 13.10 No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder of such
Security shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Securities.
Section 13.11 Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 13.12 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 13.13 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any person, other than the parties hereto and their successors hereunder
and the Holders of Securities, any benefits or any legal or equitable right,
remedy or claim under this Indenture.
Section 13.14 Multiple Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
MAIL-WELL, INC.
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK
as Trustee
By: ____________________________________
Name:
Title:
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EXHIBIT A
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL S.A.
This is to certify that, based on certificates we have received from our
member organizations substantially in the form set out in the Indenture relating
to the above-captioned Securities, as of the date hereof, U.S. $________
principal amount of the above-captioned Securities acquired from Mail-Well
Industries, Inc. (i) is owned by persons that are not United States persons (as
defined below), (ii) is owned by United States persons that are (a) foreign
branches of United States financial institutions (as defined in United States
Treasury Regulations Section 1.165-12(c)(1)(v) ("Financial Institutions"))
purchasing for their own account or for resale or (b) United States persons who
acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such financial institutions on
the date hereof (and in the case of either clause (a) or (b), each financial
institution has agreed for the benefit of Mail-Well, Inc. to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal
Revenue Code of 1986, as amended, and the regulations thereunder) or (iii) is
owned by financial institutions for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)). Financial institutions described in clause (iii) of the
preceding sentence (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to United States persons or to persons within the United
States or its possessions.
As used in this Certificate, "United States Persons" means citizens or
residents of the United States, corporations, partnerships or other entities
created or organized in or under the laws of the United States or any political
subdivision thereof or estates or trusts the income of which is subject to
United States Federal income taxation regardless of the source; "United States"
means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction; and its "possessions" include Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange any portion of the Temporary Global Bearer Security excepted in such
certificates and (ii) as of the date hereof, we have not received any
notification from any of our member organizations to the effect that the
statements made by such member organizations with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certificate is required in connection with certain
tax laws of the United States. In connection therewith, if administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceedings. We agree to
retain each statement provided by a member organization for a period of four
calendar years following the year in which the statement is received.
Dated: ___________, _____ *To be dated no earlier than the Exchange Date.
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================================================================================
SUPPLEMENTAL INDENTURE
between
MAIL-WELL, INC.
and
THE BANK OF NEW YORK
as Trustee
Dated as of November __, 1997
-----------------------
% Convertible Subordinated Notes due 2002
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
SCOPE OF THIS SUPPLEMENTAL INDENTURE
SECTION 1.1 Changes, etc. Applicable Only to the Notes................... 2
ARTICLE II
AMENDMENTS TO THE INDENTURE; DEFINITION OF TERMS
SECTION 2.1 Amendment to Section 1.1 of the Indenture.................... 2
SECTION 2.2 Amendment to Section 6.1 of the Indenture.................... 5
SECTION 2.3 Amendment to Article VIII of the Indenture................... 6
SECTION 2.4 Amendment to Section 9.2 of the Indenture.................... 8
ARTICLE: III
NOTE FORM
SECTION 3.1 Form of Note................................................. 8
ARTICLE IV
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 4.1 Designation, Title and Terms................................. 8
SECTION 4.2 Amendment to Section 2.2 of the Indenture.................... 9
SECTION 4.3 Form of Legend for Global Securities......................... 10
ARTICLE V
REDEMPTION OF THE NOTES
SECTION 5.1 Right of Redemption.......................................... 11
SECTION 5.2 Amendment to Section 3.2 of the Indenture.................... 11
SECTION 5.3 Amendment to Section 3.3 of the Indenture.................... 11
SECTION 5.4 Amendment to Section 3.5 of the Indenture.................... 12
SECTION 5.5 No Sinking Fund.............................................. 12
i
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ARTICLE VI
CONVERSION OF NOTES
SECTION 6.1 Conversion Privilege........................................ 12
SECTION 6.2 Conversion Procedure........................................ 13
SECTION 6.3 Fractional Shares........................................... 13
SECTION 6.4 Taxes on Conversion......................................... 14
SECTION 6.5 Company to Provide Stock.................................... 14
SECTION 6.6 Adjustment of Conversion Price.............................. 14
SECTION 6.7 No Adjustment............................................... 18
SECTION 6.8 Other Adjustments........................................... 18
SECTION 6.9 Adjustments for Tax Purposes................................ 18
SECTION 6.10 Adjustments by the Company.................................. 18
SECTION 6.11 Notice of Adjustment........................................ 19
SECTION 6.12 Notice of Certain Transactions.............................. 19
SECTION 6.13 Effect of Reclassifications, Consolidations, Mergers or
Sales on Conversion Privilege............................... 19
SECTION 6.14 Trustee's Disclaimer........................................ 20
ARTICLE VII
SUBORDINATION OF NOTES
SECTION 7.1 Agreement to Subordinate.................................... 21
SECTION 7.2 No Payment on Notes if Senior Debt in Default............... 21
SECTION 7.3 Distribution on Acceleration of Notes; Dissolution and
Reorganization; Subrogation of Notes........................ 22
SECTION 7.4 Reliance by Senior Debt on Subordination Provisions......... 25
SECTION 7.5 No Waiver of Subordination Provisions....................... 25
SECTION 7.6 Trustee's Relation to Senior Debt........................... 25
SECTION 7.7 Other Provisions Subject Hereto............................. 26
ARTICLE VIII
RIGHT TO REQUIRE REPURCHASE
SECTION 8.1 Designated Event Repurchase Right........................... 26
SECTION 8.2 Designated Event Repurchase Procedures...................... 27
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939........................................ 29
SECTION 9.2 New York Law to Govern....................................... 29
SECTION 9.3 Counterparts................................................. 29
SECTION 9.4 Effect of Headings........................................... 29
SECTION 9.5 Severability of Provisions................................... 30
SECTION 9.6 Successors and Assigns....................................... 30
SECTION 9.7 Benefit of Supplemental Indenture............................ 30
SECTION 9.8 Acceptance by Trustee........................................ 30
SECTION 9.9 Ratification of Indenture; Supplemental Indenture Controls;
Scope of Supplemental Indenture.............................. 30
iii
<PAGE>
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE, dated as of November __, 1997 (the
"Supplemental Indenture"), to the Indenture, dated as of November __, 1997 (the
"Indenture"), between MAIL-WELL, INC., a Colorado corporation (hereinafter
called the "Company"), and THE BANK OF NEW YORK, a New York banking corporation
(hereinafter called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness (hereinafter called the
"Securities") to be issued in one or more fully registered series, as in the
Indenture provided;
WHEREAS, the Company desires and has requested the Trustee to join it in
the execution and delivery of this Supplemental Indenture in order to establish
and provide for the issuance by the Company of a series of Securities designated
as its ___% Convertible Subordinated Notes due 2002 (the "Notes"), a specimen
copy of which is attached hereto as Exhibit A, on the terms set forth herein;
WHEREAS, Section 9.1 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without the consent
of any holder of any Securities to, inter alia, establish any form of security
as provided in Article Two of the Indenture and to provide for the issuance of
any series of Securities as provided in Article Three of the Indenture and to
set forth the terms thereof, provided certain conditions are met;
WHEREAS, the conditions set forth in the Indenture for the execution and
delivery Supplemental Indenture have been complied with; and
WHEREAS, all things necessary to make this Supplemental Indenture a valid
agreement of the Company and the Trustee, in accordance with its terms, and a
valid amendment of, and supplement to, the Indenture have been done.
NOW, THEREFORE:
There is hereby established a series (as that term is used in Article Two
of the Indenture) of Securities to be issued under the Indenture, which series
of Securities shall have the terms set forth herein and in the Notes, and in
consideration of the premises and the purchase and acceptance of the Notes by
the holders thereof, the Company mutually covenants and agrees with the Trustee,
for the equal and proportionate benefit of all holders of the Notes, that the
Indenture is supplemented and amended, to the extent and for the purposes
expressed herein, as follows:
<PAGE>
ARTICLE I
SCOPE OF THIS SUPPLEMENTAL INDENTURE
SECTION 1.1 Changes, etc. Applicable Only to the Notes.
The changes, modifications and supplements to the Indenture effected by
this Supplemental Indenture shall be applicable only with respect to, and govern
the terms of, the Notes, which shall be limited in aggregate principal amount to
(a) $150,000,000 plus (b) such aggregate principal amount (which may not exceed
$22,500,000 principal amount) of Notes as shall be purchased by the Underwriters
on the Second Closing Date pursuant to the Underwriting Agreement dated November
__, 1997 among the Company and Prudential Securities Incorporated, Bear, Stearns
& Co. Inc., Donaldson, Lufkin & Jenrette Securities Corporation and Hanifen,
Imhoff Inc., and shall not apply to any other Securities which may be issued
under the Indenture unless a supplemental indenture with respect to such other
Securities specifically incorporates such changes, modifications and
supplements.
ARTICLE II
AMENDMENTS TO THE INDENTURE; DEFINITION OF TERMS
SECTION 2.1 Amendment to Section 1.1 of the Indenture.
Section 1.1 of the Indenture is hereby amended by adding the following
definitions in their proper alphabetical order:
"Change of Control" means any event where: (i) any "person" or "group" (as
such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then outstanding securities entitled to vote generally in elections of
directors of the Company ("Voting Stock"), (ii) the Company consolidates with or
merges into any other corporation, or any other corporation merges into the
Company, and, in the case of any such transaction, the outstanding Common Stock
of the Company is reclassified into or exchanged for any other property or
security, unless the stockholders of the Company immediately before such
transaction own, directly or indirectly immediately following such transaction,
at least a majority of the combined voting power of the outstanding voting
securities of the corporation resulting from such transaction in substantially
the same proportion as their ownership of the Voting Stock immediately before
such transaction, (iii) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all the assets of the Company
and its Restricted Subsidiaries taken as a whole to any "person" (as such term
is used in Section 13(d)(3) of the Exchange Act or (iv) any time the Continuing
Directors do not constitute a majority of the Board of Directors of the Company
(or, if applicable, a successor corporation to the Company); provided, that a
Change of Control shall not
<PAGE>
be deemed to have occurred if either (i) the last sale price of the Common Stock
for any five trading days during the ten trading days immediately preceding the
Change of Control is at least equal to 110% of the Conversion Price in effect on
the date of such Change of Control or (ii) at least 90% of the consideration
(excluding cash payments for fractional shares) in the transaction or
transactions constituting the Change of Control consists of shares of common
stock that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States.
"Common Stock" means the common stock of the Company as the same exists at
the execution of this indenture or as such stock may be constituted from
time to time.
"Continuing Directors" means as of any date of determination, any member of
the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such board at the time of such
nomination or election.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way or, if no sale price is reported, the average of the average bid and
average asked prices on such day of the Common Stock on the New York Stock
Exchange Composite Tape or, in the event shares of Common Stock are not listed
on the New York Stock Exchange, on the principal natural securities exchange on
which the Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the Nasdaq Stock
Market or by the National Quotation Bureau Incorporated. In the absence of such
quotations, the Board of Directors shall be entitled to determine the Daily
Market Price on the basis of such quotations as it considers appropriate.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Excess Payment" means the excess of (a) the aggregate of the cash and fair
market value of other consideration paid by the Company or any of its
subsidiaries with respect to the shares acquired in a tender offer or other
negotiated transaction over (b) the Daily Market Price of such acquired shares
on the Trading Day immediately after giving effect to the completion of such
tender offer or other negotiated transaction.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are in effect as of the date of preparation of a financial statement or
the date that a particular action is taken or an event occurs, as applicable.
3
<PAGE>
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness. "Guaranteed" has a correlative meaning to "Guarantee".
"Indebtedness" means, with respect to any person, all obligations, whether
or not contingent, of such person (i)(a) for borrowed money (including, but not
limited to, any indebtedness secured by a security interest, mortgage or other
lien on the assets of such person which is (1) given to secure all or part of
the purchase price of property subject thereto, whether given to the vendor of
such property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note, debenture, bond or other written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the lessee under GAAP or under any lease or related document (including a
purchase agreement) which provides that such person is contractually obligated
to purchase or to cause a third party to purchase such leased property,
(d) in respect of letters of credit, bank guarantees or bankers' acceptances,
(e) with respect to indebtedness secured by a mortgage, pledge, lien,
encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such person are subject, whether
or not the obligation secured thereby shall have been assumed or Guaranteed by
or shall otherwise be such person's legal liability, (f) in respect of the
balance of deferred and unpaid purchase price of any property or assets, and (g)
under interest rate or currency swap agreements, cap, floor and collar
agreements, spot and forward contracts and similar agreements and arrangements;
(ii) with respect to any obligation of others of the type described in the
preceding clause (i) or under clause (iii) below, assumed by or Guaranteed in
any manner by such person or in effect guaranteed by such person through an
agreement to purchase (including, without limitation, "take or pay" and similar
arrangements), contingent or otherwise (and the obligations of such person under
any such assumptions, Guarantees or other such arrangements); and (iii) any and
all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any of the foregoing.
"Material Subsidiary" means any Subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act (as such Regulation is in effect on the date
hereof).
"Representative" means the trustee, agent or representative (if any) for an
issue of Senior Debt.
"Senior Debt" means the principal of, interest on and other amounts due on
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or Guaranteed by the Company; unless, in
the instrument creating or evidencing or pursuant to which Indebtedness is
outstanding, it is expressly provided that such Indebtedness is not senior in
right of payment to the Securities. Senior Debt includes, with respect to the
obligations described above, interest accruing, pursuant to the terms of such
Senior Debt, on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not post-filing interest is
allowed in such proceeding, at the rate specified in the instrument governing
the relevant
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obligation. Notwithstanding anything to the contrary in the foregoing, Senior
Debt shall not include: (a) Indebtedness of or amounts owed by the Company for
compensation to employees, or for goods, services or materials purchased in the
ordinary course of business; (b) Indebtedness of the Company to a Subsidiary of
the Company; or (c) any liability for Federal, state, local or other taxes owed
or owing by the Company.
"Termination of Trading" means an event where the Common Stock (or other
common stock into which the Securities are then convertible) is not listed for
trading on a United States national securities exchange or an established
automated over-the-counter trading market in the United States.
"Trading Day" shall mean (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or another
national securities exchange is open for business, (B) if the applicable
security is quoted on the Nasdaq Stock Market, a day on which trades may be made
thereon or (c) if the applicable security is not so listed, admitted for trading
or quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
SECTION 2.2 Amendment to Section 6.1 of the Indenture.
Pursuant to Section 2.3(a) of the Indenture, Section 6.1 of the Indenture
is hereby amended by deleting subsections (1), (2), (3) and (4) thereof and
inserting the following in lieu thereof:
(a) the Company defaults in the payment of interest on any Note when
the same becomes due and payable, whether or not such payments shall be
prohibited by Article VII of this Supplemental Indenture, and the Default
continues for a period of 30 days after the date due and payable;
(b) the Company defaults in the payment of the principal of any Note
when the same becomes due and payable at maturity, upon redemption or otherwise,
whether or not such payment shall be prohibited by Article VII of this
Supplemental Indenture;
(c) failure to pay when and as due the Redemption Price as provided in
Article V of this Supplemental Indenture or the Repurchase Amount as provided in
Article VIII of this Supplemental Indenture.
(d) the Company fails to observe or perform any other covenant or
agreement contained in this Indenture or the Notes, required by it to be
performed and the Default continues for a period of 60 days after the receipt of
written notice from the Trustee to the Company or from the holders of 25% in
aggregate principal amount of the then outstanding Notes to the Company and the
Trustee stating that such notice is a "Notice of Default";
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(e) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company or any Subsidiary of the
Company (or the payment of which is Guaranteed by the Company or any Subsidiary
of the Company), whether such Indebtedness or Guarantee now exists or is created
after the date of the issuance of the Notes, which default (i) is caused by a
failure to pay when due principal of or interest on such Indebtedness within the
grace period provided for in such Indebtedness Iwhich failure continues beyond
any applicable grace period) (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such indebtedness, together with ~e principal
amount of any other such Indebtedness under which there is a Payment Default or
the maturity of which has been so accelerated, aggregates $25 million or more;
(f) a final, non-appealable judgment or final, non-appealable
judgments (other than any judgment as to which a reputable insurance company has
accepted full liability) for the payment of money are entered by a court or
courts of competent jurisdiction against the Company or any Material Subsidiary
of the Company and remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days, provided that the aggregate of all
such judgments exceeds $25 million;
(g) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case in which it
is the debtor, (iii) consents to the appointment
of a Custodian of it or for all or substantially all of its property, (iv) makes
a general assignment for the benefit of its creditors, or (v) makes the
admission in writing that it generally is unable to pay its debts as the same
become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any Material
Subsidiary of the Company in an involuntary case, (ii) appoints a Custodian of
the Company or any Material Subsidiary of the Company or for all or
substantially all of its property, and the order or decree remains unstayed and
in effect for 60 days, or (iii) orders the liquidation of the Company or any
Material Subsidiary of the Company, and the order or decree remains unstayed and
in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
SECTION 2.3 Amendment to Article VIII of the Indenture.
(a) Section 8.4 of the Indenture is hereby amended to read as follows:
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"Upon the Company's exercise under Section 8.3 of the option applicable to
this Section 8.2, the Company shall be deemed to have been discharged from its
obligations with respect to the Defeased Securities on the date the conditions
set forth below are satisfied (hereinafter "Defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the defeased Securities, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Sections 2.4,
2.5, 2.6, 2.9, 2.11, 2.12, 4.1, 4.5, 6.6, 6.7, 7.7, 7.8 and 8.2 of this
Indenture and to have satisfied all its other obligations under such series of
Securities and this Indenture insofar as such series of Securities are concerned
(and the Trustee, at the expense of the Company, and, upon written request,
shall execute proper instruments acknowledging the same), except with respect to
the Notes, the following, which shall survive unless otherwise terminated or
discharged hereunder: (A) the rights of Holders of Notes to receive, solely from
the trust fund described in Section 8.6 and as more fully set forth in such
Section, payments in respect of the principal of premium, if any, and interest
on such Notes when such payments are due, (B) the Company's obligations under
Sections 2.5, 2.6, 2.9 and 2.11 and 10.2, and Articles VI and VIII of the
Supplemental Indenture, (C) the rights and duties and powers of the Trustee
hereunder and (D) this Article VIII of the Indenture. Subject to compliance with
this Article VIII, the Company may exercise its option under this Section 8.4
notwithstanding the prior exercise of its option under Section 8.5 with respect
to a series of Securities."
(b) Section 8.5 of the Indenture is hereby amended to read in its entirety
as follows:
"Upon the Company's exercise under Section 8.3 ofthe option applicable this
Section 8.5, the Company shall be released from its obligations under Sections
4.2 and 4.3 and Article V and such other provisions as may be provided as
contemplated by Section 2.3(a) with respect to Securities of a particular series
and with respect to the Defeased Securities, and Article VII of the Supplemental
Indenture and Article XII of the Indenture shall cease to be of further force
and effect, on and after the date the conditions set forth below are satisfied
(hereinafter "Covenant Defeasance"), and the Defeased Securities shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences if any
thereof) in connection with such covenants, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or Article, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other provisions herein or in any other document and such omission to
comply shall not constitute a
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Default or an Event of Default under Section 6.1 but, except as specified
above, the remainder of this Indenture and such Defeased Securities shall be
unaffected thereby."
SECTION 2.4 Amendment to Section 9.2 of the Indenture.
Section 9.2 of the Indenture is hereby amended by the addition of the
following clauses at the end of clause (4) thereof:
"(5) adversely affect the right of any Holder to convert any 1997 Note
provided in the Indenture; and
(6) modify the provisions on the Indenture relating to the Company's
requirement to repurchase Notes upon a Designated Event in a manner adverse
to the Holders."
ARTICLE III
NOTE FORM
SECTION 3.1 Form of Note.
The Note and the Trustee's Certificate of Authentication to be endorsed
thereon shall be substantially in the form of Exhibit A to this Supplemental
Indenture.
ARTICLE IV
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 4.1 Designation, Title and Terms.
There is hereby authorized a series of Notes designated the "___ %
Convertible Subordinated Notes due 2002," limited in aggregate principal amount
to (a) $150,000,000 plus (b) such aggregate principal amount (which may not
exceed $22,500,000 principal amount) of Notes as shall be purchased by the
Underwriters on the Second Closing Date pursuant to the Underwriting Agreement
dated November __, 1997 between the Company and Prudential Securities
Incorporated, Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities
Corporation and Hanifen, Imhoff Inc., which amount shall be as set forth in any
written order of the Company for the authentication and delivery of Notes
pursuant to Section 2.3 of the Indenture. The Notes will mature on November 1,
2002 and bear interest at a rate of ___% per annum from November __, 1997, or
from the most recent Interest Payment Date on which interest has been paid or
provided for, payable semi-annually on November 1 and May 1 of each year,
commencing May 1, 1998, to the Holder at the close of business on the preceding
October 15 or April 15 (whether or not a Business Day), as
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the case may be. Interest on the Notes will be computed on the basis of a 360-
day year comprised of twelve, 30-day months.
Principal of, and premium, if any, and interest on the Notes will be
payable, Notes may be presented for conversion and transfers of the Notes will
be registrable at the office or agency of the Company in the Borough of
Manhattan, The City of New York, and transfers of the Notes will also be
registrable at such other office or agency of the Company as may be maintained
for such purpose. In addition, payment of interest may be made, at the option of
the Company, by check mailed to the address of the person entitled thereto as
shown on the books of the Registrar;provided, however, that payments to The
Depository Trust Company ("DTC") will be made by wire transfer off immediately
available funds to the account of DTC or its nominee.
The Notes will be redeemable as provided in Article V.
The Notes will be convertible as provided in Article VI.
The Notes will be subordinated in right of payment to Senior Indebtedness
of the Company, as provided in Article VII.
The Notes will be subject to repurchase by the Company, at the option of
the Holders, as provided in Article VIII.
SECTION 4.2 Amendment to Section 2.2 of the Indenture.
Section 2.2 of the Indenture is hereby amended by inserting the following
at the end first paragraph of such section:
Each security issued in global form (a "Global Security") authenticated
under this Indenture shall be registered in the name of the Depositary
designated for such Global Security or a nominee thereof and delivered to
such Depositary or a nominee thereof or custodian therefor, and each such
Global Security shall constitute a single Security for all purposes of this
Indenture.
Any exchange of a Global Security for other Securities may be made in
whole or in part, and all Securities issued in exchange for a Global
Security or any portion thereof shall be registered in such names as the
Depositary for such Global Security shall direct.
If at any time the Depositary for the Securities notifies the Company
that it is unwilling or unable to continue as Depositary for the Securities
or if at any time the Depositary for the Securities shall no longer be
qualified to serve as the Depositary, the Company shall appoint a successor
Depositary with respect to the Securities. If a successor Depositary for
the Securities is not appointed by the
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Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Securities, will authenticate and deliver Securities of like
tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of the Global Security or Securities in exchange
for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that
Securities issued in the form of one or more Global Securities shall no
longer be represented by such Global Securities. In such event, the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities, will authenticate and
deliver Securities of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities in exchange for such Global Security or Securities.
Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such
Global Security or any nominee thereof, and no such transfer may be
registered, unless (1) such Depositary (A) notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or
(B) ceases to be qualified to serve as Depositary, (2) the Company executes
and delivers to the Trustee a Company Order that such Global Security shall
be so transferable, registrable and exchangeable, and such transfers shall
be registrable, or (3) there shall have occurred and be continuing an Event
of Default. Notwithstanding any other provision in this Indenture, a Global
Security to which the restriction set forth in the preceding sentence
shall have ceased to apply may be transferred only to, and may be
registered and exchanged for Securities registered only in the name or
names of, such Person or Persons as the Depositary for such Global Security
shall have directed and no transfer thereof other than such a transfer may
be registered.
Every Security authenticated and delivered upon registration of
transfer, or in exchange for or in lieu, of a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph
shall apply, shall be authenticated and delivered in the form of, and shall
be, a Global Security unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee
thereof.
SECTION 4.3 Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder shall bear a
legend in substantially the form set forth on page A-1 of Exhibit A.
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ARTICLE V
REDEMPTION OF THE NOTES
SECTION 5.1 Right of Redemption.
The Notes may be redeemed at the option of the Company, in whole or in
part, at any time on or after November 1, 2000, on not less than 15, nor more
than 60, days' prior notice at the redemption prices (expressed as percentages
of principal amount) set forth below, together with accrued and unpaid interest,
if any, to the date of redemption, if redeemed during the l 2-month period
beginning on November 1 of the years indicated below (subject to the right of
holders of record on relevant record dates to receive interest due on an
interest payment date):
Year Redemption Price
---- ----------------
2000 ................. %
2001 ................. %
2002 ................. %
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed either in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, pro rata or by lot or by
any other method the Trustee deems fair and appropriate.
SECTION 5.2 Amendment to Section 3.2 of the Indenture.
Section 3.2 of the Indenture is hereby amended by inserting the following
as the end of such Section:
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of
the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of
such selection.
SECTION 5.3 Amendment to Section 3.3 of the Indenture.
Section 3.3 of the Indenture is hereby amended by adding the following
clause (g):
"(g) the conversion price, the date on which the right to convert
the Notes will terminate and the place where such Notes may be surrendered
for conversion."
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SECTION 5.4 Amendment to Section 3.5 of the Indenture.
Section 3.5 of the Indenture is hereby amended by inserting the
following at the end of such section:
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of
the Holder of such Security or any Predecessor Security to receive interest
as provided in the last paragraph of Section 2.13 of the Indenture) be paid
to the Company upon Company Request or, if then held by the Company, shall
be released from such trust.
SECTION 5.5 No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE VI
CONVERSION OF NOTES
SECTION 6.1 Conversion Privilege.
A holder of a Note may convert the principal amount thereof (or any portion
thereof that is an integral multiple of $1,000) into fully paid and
nonassessable shares of Common Stock of the Company at any time after 90 days
following the date of original issuance thereof and prior to the close of
business (New York time) on the date of the Note's maturity at the Conversion
Price then in effect, except that, with respect to any Note called for
redemption, such conversion right shall terminate at the close of business on
the Business Day immediately preceding the redemption date (unless the Company
shall default in making the redemption payment when it becomes due, in which
case the conversion right shall terminate on the date such default is cured).
The number of shares of Common Stock issuable upon conversion of a Note is
determined by dividing the principal amount of the Note converted or to be
converted by the conversion price in effect on the Conversion Date (the
"Conversion Price").
The initial Conversion Price is stated in paragraph 10 of the Notes and is
subject to adjustment as provided in this Article VI.
Provisions of this Indenture that apply to conversion of all of a Note also
apply to conversion of a portion of it. A holder of Notes is not entitled to any
rights of a holder of Common Stock until such holder of securities has converted
such Notes into Common Stock, and only to the extent that such Notes are deemed
to have been converted into Common Stock under this Article VI.
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SECTION 6.2 Conversion Procedure.
To convert a Note, a holder must satisfy the requirements in paragraph 10
of the Notes. The date on which the holder satisfies all of those requirements
is the conversion date (the "Conversion Date"). As soon as practicable after the
Conversion Date, the Company shall deliver to the holder through the Conversion
Agent a certificate for the number of whole shares of Common Stock issuable
upon the conversion and a check for any fractional share determined pursuant to
Section 6.3. The person in whose name the certificate is registered shall become
the stockholder of record on the Conversion Date and, as of such date, such
person's rights as a Noteholder shall cease; provided, however, that no
surrender of a Note on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person entitled to receive
the shares of Common Stock upon such conversion as the stockholder of record of
such shares of Common Stock on such date, but such surrender shall be effective
to constitute the person entitled to receive such shares of Common Stock as the
stockholder of record thereof for all purposes at the close of business on the
next succeeding day on which such stock transfer books are open; provided
further, however, that such conversion shall be at the Conversion Price in
effect on the date that such Note shall have been surrendered for conversion, as
if the stock transfer books of the Company had not been closed.
No payment or adjustment will be made for accrued and unpaid interest on a
converted Note or for dividends or distributions on shares of Common Stock
issued upon conversion of a Note, but if any holder surrenders a Note for
conversion on or after an interest payment record date and on or before the
related interest payment date, then, notwithstanding such conversion, the
interest payable on such interest payment date shall be paid to the holder of
such Note on such record date. In such event, such Note, when surrendered for
conversion, must be accompanied by payment in funds acceptable to the Company of
an amount equal to the interest payable on such interest payment date on the
portion so converted.
If a holder converts more than one Note at the same time, the number of
whole shares of Common Stock issuable upon the conversion shall be based on the
total principal amount of Notes converted.
Upon surrender of a Note that is converted in part, the Trustee shall
authenticate for the holder a new Note equal in principal amount to the
unconverted portion of the Note surrendered.
SECTION 6.3 Fractional Shares.
The Company will not issue fractional shares of Common Stock upon
conversion of a Note. In lieu thereof, the Company will pay an amount in cash
based upon the Daily Market Price of the Common Stock on the trading day prior
to the Conversion Date.
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SECTION 6.4 Taxes on Conversion.
The issuance of certificates for shares of Common Stock upon the conversion
of any Note shall be made without charge to the converting Noteholder for such
certificates or for any tax in respect of the issuance of such certificates, and
such certificates shall be issued in the respective names of, or in such names
as may be directed by, the holder or holders of the converted Note; provided,
however, that in the event that certificates for shares of Common Stock are to
be issued in a name other than the name of the holder of the Note converted,
such Note, when surrendered for conversion, shall be accompanied by an
instrument of transfer, in form satisfactory to the Company, duly executed by
the registered holder thereof or his duly authorized attorney; and provided
further, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificates in a name other than that of the holder of the
converted Note, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or is
not applicable.
SECTION 6.5 Company to Provide Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely for
the purpose of issuance upon conversion of Notes as herein provided, a
sufficient number of shares of Common Stock to permit the conversion of all
outstanding Notes into shares of Common Stock.
All shares of Common Stock which may be issued upon conversion of the Notes
shall be duly authorized, validly issued, fully paid and nonassessable when so
issued.
SECTION 6.6 Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time as
follows:
(a) In case the Company shall (i) pay a dividend in shares of Common
Stock to holders of Common Stock, (ii) make a distribution in shares of Common
Stock to holders of Common Stock, (iii) subdivide or reclassify its outstanding
shares of Common Stock into a greater number of shares of Common Stock or (iv)
combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, the Conversion Price in effect immediately
prior to such action shall be adjusted so that the holder of any Note thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock which he would have owned immediately following such action had
such Notes been converted immediately prior thereto. Any adjustment made
pursuant to this subsection (a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision or
combination.
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(b) In case the Company shall issue rights or warrants to
substantially all holders of Common Stock entitling them (for a period
commencing no earlier than the record date for the determination of holders of
Common Stock entitled to receive such rights or warrants and expiring not more
than 45 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into or exchangeable for Common Stock)
at a price per share less than the Current Market Price on such record date, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
such record date by a fraction of which (i) the numerator shall be the number of
shares of Common Stock outstanding on such record date plus the number of shares
of Common Stock which the aggregate offering price of the offered shares of
Common Stock (or the aggregate conversion price of the convertible securities so
offered) would purchase at such Current Market Price, and (ii) the denominator
shall be the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock offered (or into which the
convertible securities so offered are convertible). Such adjustments shall
become effective immediately after such record date.
(c) In case the Company shall distribute to substantially all holders
of Common Stock shares of any class of Capital Stock of the Company other than
Common Stock, evidences of indebtedness or other assets (other than cash
dividends), or shall distribute to substantially all holders of Common Stock
rights or warrants to subscribe for securities (other than those securities
referred to in subsection (b) above), then in each such case the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which (i) the numerator shall be the Current
Market Price on the record date mentioned below less the then fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and described in a Board
Resolution) of the portion of the assets so distributed or of such subscription
rights or warrants applicable to one share of Common Stock, and (ii) the
denominator shall be such Current Market Price. Such adjustment shall become
effective immediately after the record date for the determination of the
holders of Common Stock entitled to receive such distribution. Notwithstanding
the foregoing, in the event that the Company shall distribute rights or warrants
to subscribe for securities (other than the rights or warrants referred to in
subsection (b) above) ("Rights") pro rata to holders of Common Stock, the
Company may, in lieu of making any adjustment pursuant to this Section 5.6, make
proper provision so that each holder of a Note who converts such Note (or any
portion thereof) after the record date for such distribution and prior to the
expiration or redemption of the Rights shall 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 to be determined as
follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of Rights to which a holder of
a number of shares of Common Stock equal to the number of Conversion Shares is
entitled at the time of such conversion in accordance with the terms and
provisions of and applicable to the Rights; and (ii) if such conversion occurs
after the Distribution Date, the same number of Rights to which a holder of the
number of shares of Common Stock into which the principal amount of the Note so
converted was
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convertible immediately prior to the Distribution Date would have been entitled
on the Distribution Date in accordance with the terms and provisions of and
applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute to substantially all holders of its Common Stock cash (excluding any
cash that is distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to paragraph (c) of this Section) in an aggregate amount
that, together with the sum of (x) the aggregate amount of any other
distributions to all holders of its Common Stock made in cash plus (y) all
Excess Payments, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section or this paragraph
(d) has been made, exceeds 5% of the product of the Current Market Price on the
Distribution Record Date times the number of shares of Common Stock outstanding
on the Distribution Record Date (excluding shares held in the treasury of the
Company), the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying such Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction contemplated by
this paragraph (d) by a fraction of which (i) the numerator shall be the Current
Market Price on the Distribution Record Date less the amount of such cash and
other consideration (including any Excess Payments) so distributed applicable to
one share (based on the pro rata portion of the aggregate amount of such cash
and other consideration (including any Excess Payments divided by the shares of
Common Stock outstanding on the Distribution Record Date) of Common Stock and
(ii) the denominator shall be such Current Market Price on the Distribution
Record Date) such reduction to become effective immediately prior to the opening
of business on the day following the Distribution Record Date.
(e) In case a tender offer or other negotiated transaction made by the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall be consummated, if an Excess Payment is made in respect of such
tender offer or other negotiated transaction and the amount of such Excess
Payment, together with the sum of (x) the aggregate amount of all Excess
Payments plus (y) the aggregate amount of all distributions to all holders of
the Common Stock made in cash, in each case made within the 12 months preceding
the date of payment of such current negotiated transaction consideration or
expiration of such current tender offer, as the case may be (the "Purchase
Date"), and as to which no adjustment pursuant to paragraph (c) or paragraph (d)
of this Section or this paragraph (e) has been made, exceeds 5% of
the product of the Current Market Price on the Purchase Date times the number of
shares of Common Stock outstanding (including any tendered shares but excluding
any shares held in the treasury of the Company) on the Purchase Date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying such Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
paragraph (e) by a fraction of which (i) the numerator shall be the Current
Market Price on the Purchase Date less the amount of such Excess Payments and
such cash distributions, if any, applicable to one share (based on the pro rata
portion of the aggregate amount of such Excess Payments and such cash
distributions, divided by the shares of Common Stock outstanding on the Purchase
Date) of Common Stock and (ii) the
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denominator shall be the Current Market Price on the Purchase Date, such
reduction to become effective immediately prior to the opening of business on
the day following the Purchase Date.
(f) In case the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per share (or
having a conversion or exchange price per share) that is less than the Current
Market Price (but excluding, among other things, issuances: (1) pursuant to any
bona fide plan for the benefit of employees, directors or consultants of the
Company now or hereafter in effect; (2) to acquire all or any portion of a
business in an arm's-length transaction between the Company and an unaffiliated
third party including, if applicable, issuances upon exercise of options or
warrants assumed in connection with such transaction; (3) in a bona fide public
offering pursuant to a firm commitment underwriting or sales at the market
pursuant to a continuous offering stock program; (4) pursuant to the exercise of
warrants, rights (including, without limitation, earnout rights) or options, or
upon the conversion of convertible securities, which are issued and outstanding
on the date hereof, or which may be issued in the future for fair value and with
an exercise price or conversion price at least equal to the Current Market Price
at the time of such issuance), then in each such case the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying the
Conversion Price by a fraction of which (i) the numerator shall be (A) the
number of shares of Common Stock outstanding on the record date or issuance
date, as applicable, plus a number determined by (B) multiplying the number of
additional shares of Common Stock offered or issuable upon conversion or
exchange times the offering, conversion or exchange price per share of
additional shares and dividing the product thereof by the Current Market Price
on the record date or issuance date, as applicable, and (ii) the denominator
shall be the number of shares of Common Stock outstanding on the record date or
issuance date, as applicable, plus the number of additional shares of Common
Stock offered or issuable upon conversion or exchange. Such adjustment shall be
made whenever any such securities are issued and shall become effective on the
date of such issuance.
(g) The Current Market Price per share of Common Stock on any date
(the "Current Market Price") shall be deemed to be the average of the Daily
Market Prices for the shorter of (i) 30 consecutive Business Days ending on the
last full trading day on the exchange or market referred to in determining such
Daily Market Prices prior to the time of determination or (ii) the period
commencing on the date next succeeding the first public announcement of the
issuance of such rights or such warrants or such other distribution or such
negotiated transaction through such last full trading day on the exchange or
market referred to in determining such Daily Market Prices prior to the time of
determination.
(h) In any case in which this Section 6.6 shall require that an
adjustment be made immediately following a record date for an event, the Company
may elect to defer, until such event, issuing to the holder of any Note
converted after such record date the shares of Common Stock and other Capital
Stock of the Company issuable upon such conversion over and above the shares of
Common Stock and other Capital Stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is
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so deferred, the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence of the right to receive such shares.
SECTION 6.7 No Adjustment.
No adjustment in the Conversion Price shall be required until cumulative
adjustments amount to 1% or more of the Conversion Price as last adjusted;
provided, however, that any adjustments which by reason of this Section 6.7 are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article V shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.
No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. No adjustment need be
made for a change in the par value or no par value of the Common Stock.
SECTION 6.8 Other Adjustments.
(a) In the event that, as a result of an adjustment made pursuant to
Section 6.6 above, the holder of any Note thereafter surrendered for conversion
shall become entitled to receive any shares of Capital Stock of the Company
other than shares of its Common Stock, thereafter the Conversion Price of such
other shares so receivable upon conversion of any Notes shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in this
Article VI.
(b) In the event that shares of Common Stock are not delivered after
the expiration of any of the rights or warrants referred to in Section 6.6(b)
and Section 6.6(c) hereof, the Conversion Price shall be readjusted to the
Conversion Price which would otherwise be in effect had the adjustment made upon
the issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered.
SECTION 6.9 Adjustments for Tax Purposes.
The Company may, at its option, make such reductions in the Conversion
Price, in addition to those required by Section 6.6 above, as it determines to
be advisable in order that any stock dividend, subdivision of shares,
distribution of rights to purchase stock or securities or distribution of
securities convertible into or exchangeable for stock made by the Company to its
stockholders will not be taxable to the recipients thereof.
SECTION 6.10 Adjustments by the Company.
The Company from time to time may, to the extent permitted by law, reduce
the Conversion Price by any amount for any period of at least 20 days, in which
case the Company shall give at least 15 days' notice of such reduction in
accordance with Section 6.11, if the Board of Directors has
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made a determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive.
SECTION 6.1 1 Notice of Adjustment.
Whenever the Conversion Price is adjusted, the Company shall promptly mail
to Noteholders at the addresses appearing on the Registrar's books a notice of
the adjustment and file with the Trustee an Officers' Certificate briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment.
SECTION 6.1 2 Notice of Certain Transactions.
In the event that:
(a) the Company takes any action which would require an adjustment in
the Conversion Price;
(b) the Company takes any action that would require a supplemental
indenture pursuant to Section 6.13; or
(c) there is a dissolution or liquidation of the Company;
a holder of a Note may wish to convert such Note into shares of Common Stock
prior to the record date for or the effective date of the transaction so that he
may receive the rights, warrants, securities or assets which a holder of shares
of Common Stock on that date may receive. Therefore, the Company shall mail to
Noteholders at the addresses appearing on the Registrar's books and to the
Trustee a notice stating the proposed record or effective date, as the case may
be. The Company shall mail the notice at least 15 days before such date;
however, failure to mail such notice or any defect therein shall not affect the
validity of any transaction referred to in clause (a), (b) or (c) of this
Section 6.12.
SECTION 6.13 Effect of Reclassifications, Consolidations, Mergers or Sales on
Conversion Privilege.
If any of the following shall occur, namely: (i) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of Notes
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), (ii)
any consolidation or merger to which the Company is a party other than a merger
in which the Company is the continuing corporation and which does not result in
any reclassification of, or change (other than a change in name, or par value,
or from par value to no par value, or from no par value to par value or as a
result of a subdivision or combination) in outstanding shares of Common Stock
or (iii) any sale or conveyance of all or substantially all of the property or
business of the Company as an entirety, then the Company, or such successor or
purchasing corporation, as
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the case may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale or conveyance, execute and deliver to the
Trustee a supplemental indenture in form satisfactory to the Trustee providing
that the holder of each Note then outstanding shall have the right to convert
such Note into the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock deliverable upon conversion of such Note immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. Such
supplemental indenture shall provide for adjustments of the Conversion Price
which shall be as nearly equivalent as may be practicable to the adjustments of
the Conversion Price provided for in this Article VI. The foregoing, however,
shall not in any way affect the right a holder of a Note may otherwise have,
pursuant to clause (ii) of the last sentence of subsection (c) of Section 6.6,
to receive Rights upon conversion of a Note. If, in the case of any such
consolidation, merger, sale or conveyance, the stock or other securities and
property (including cash) receivable thereupon by a holder of Common Stock
includes shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the holders of the Notes as
the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provision of this Section 6.13 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture pursuant to
this Section 6.13, the Company shall promptly file with the Trustee an Officers'
Certificate briefly stating the reasons therefor, the kind or amount of shares
of stock or securities or property (including cash) receivable by holders of the
Notes upon the conversion of their Notes after any such reclassification,
change, consolidation, merger, sale or conveyance and any adjustment to be made
with respect thereto.
SECTION 6.14 Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under this Article
VI should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of the correctness of any such adjustment, and
shall be protected in relying upon the Officers' Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 6.11. The Trustee makes no representation as to the validity or value of
any securities or assets issued upon conversion of Notes, and the Trustee shall
not be responsible for the Company's failure to comply with any provisions of
this Article VI.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 6.13, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 6.13.
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ARTICLE VII
SUBORDINATION OF NOTES
Pursuant to Section 2.3(a) of the Indenture, Article XII of the Indenture
is hereby deleted, and the following sections set forth in this Article VII
substituted in lieu thereof:
SECTION 7.1 Agreement to Subordinate.
The Company, for itself and its successors, and each Noteholder, by his
acceptance of Notes, agree that the payment of the principal of or interest on
or any other amounts due on the Notes is subordinated in right of payment, to
the extent and in the manner stated in this Article VII, to the prior payment in
full of all existing and future Senior Debt.
SECTION 7.2 No Payment on Notes if Senior Debt in Default.
Anything in this Indenture to the contrary notwithstanding, no payment on
account of principal of or redemption of, interest on or other amounts due on
the Notes, and no redemption, purchase, or other acquisition of the Notes, shall
be made by or on behalf of the Company (i) unless full payment of amounts then
due for principal and interest and of all other amounts then due on all Senior
Debt has been made or duly provided for pursuant to the terms of the instrument
governing such Senior Debt or (ii) if, at the time of such payment, redemption,
purchase or other acquisition, or immediately after giving effect thereto, there
shall exist under any Senior Debt, or any agreement pursuant to which any Senior
Debt is issued, any default, which default shall not have been cured or waived
and which default shall have resulted in the full amount of such Senior Debt
being declared due and payable.
In the event that, notwithstanding the provisions of this Section 7.2,
payments are made by or on behalf of the Company in contravention of the
provisions of this Section 7.2, such payments shall be held by the Trustee, any
Paying Agent or the holders, as applicable, in trust for the benefit of, and
shall be paid over to and delivered to, the Representative of the holders of
Senior Debt or the trustee under the indenture or other agreement (if any),
pursuant to which any instruments evidencing any Senior Debt may have been
issued for application to the payment of all Senior Debt ratably according to
the aggregate amounts remaining unpaid to the extent necessary to pay all Senior
Debt in full in accordance with the terms of such Senior Debt, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
The Company shall give prompt written notice to the Trustee and any Paying
Agent of any default or event of default under any Senior Debt or under any
agreement pursuant to which any Senior Debt may have been issued.
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SECTION 7.3 Distribution on Acceleration of Notes; Dissolution and
Reorganization; Subrogation of Notes.
(a) If the Notes are declared due and payable because of the
occurrence of an Event of Default, the Company shall give prompt written notice
to the holders of all Senior Debt or to the trustee(s) for such Senior Debt of
such acceleration. The Company may not pay the principal of or interest on or
any other amounts due on the Notes until five days after such holders or
trustee(s) of Senior Debt receive such notice and, thereafter, the Company may
pay the principal of or interest on or any other amounts due on the Notes only
if the provisions of this Article VII permit such payment.
(b) Upon (i) any acceleration of the principal amount due on the
Notes because of an Event of Default or (ii) any distribution of assets of the
Company upon any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or any other dissolution, winding up,
liquidation or reorganization of the Company):
(i) the holders of all Senior Debt shall first be entitled
to receive payment in full of the principal thereof, the interest thereon
and any other amounts due thereon before the holders are entitled to
receive payment on account of the principal of or interest on or any
other amounts due on the Notes;
(ii) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities (other
than securities of the Company as reorganized or readjusted or securities
of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in this Article with respect to the Notes,
to the payment in full without diminution or modification by such plan of
all Senior Debt), to which the holders or the Trustee would be entitled
except for the provisions of this Article, shall be paid by the
liquidating trustee or agent or other person making such a payment or
distribution, directly to the holders of Senior Debt (or their
representatives(s) or trustee(s) acting on their behalf), ratably
according to the aggregate amounts remaining unpaid on account of the
principal of or interest on and other amounts due on the Senior Debt held
or represented by each, to the extent necessary to make payment in full
of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt;
and
(iii) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than securities
of the Company as reorganized or readjusted, or securities of the Company
or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article with respect to the Notes, to the payment in
full without diminution or modification by such plan of Senior Debt),
shall be received by the Trustee or the holders before all Senior
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Debt is paid in full, such payment or distribution shall be held in trust
for the benefit of, and be paid over to upon request by a holder of the
Senior Debt, the holders of the Senior Debt remaining unpaid (or their
representatives) or trustee(s) acting on their behalf, ratably as
aforesaid, for application to the payment of such senior Debt until all
such Senior Debt shall have been said in full, after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt.
Subject to the payment in full of all Senior Debt, the holders of the Notes
shall be subrogated to the rights of the holders of Senior Debt: to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Debt until the principal of and interest on the Notes
shall be paid in full and, for purposes of such subrogation, no such payments or
distributions to the holders of Senior Debt of cash, property or securities
which otherwise would have been payable or distributable to holders shall, as
between the Company, its creditors other than the holders of Senior Debt, and
the holders, be deemed to be a payment by the Company to or on account of the
Senior Debt, it being understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the holders,
on the one hand, and the holders of Senior Debt, on the other hand.
Nothing contained in this Article VII or elsewhere in this Indenture or in
the Notes is intended to or shall (i) impair, as between the Company and its
creditors other than the holders of Senior Debt, the obligation of the Company,
which is absolute and unconditional, to pay to the holders the principal of and
interest on the Notes as and when the same shall become due and payable in
accordance with the terms of the Notes, (ii) affect the relative rights of the
holders and creditors of the Company other than holders of Senior Debt or, as
between the Company and the Trustee, the obligations of the Company to the
Trustee, or (iii) prevent the Trustee or the holders from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article VII of the holders
of Senior Debt in respect of cash, property and securities of the Company
received upon the exercise of any such remedy.
Upon distribution of assets of the Company referred to in this Article VII,
the Trustee, subject to the provisions of Section 7.1 of the Indenture, and the
holders shall be entitled to rely upon a certificate of the liquidating trustee
or agent or other person making any distribution to the Trustee or to the
holders for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
VII. The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt. Nothing contained in this Article VII or elsewhere in
this Indenture, or in any of the Notes, shall prevent the good faith application
by the Trustee of any moneys which were deposited with it hereunder, prior to
its receipt of written notice of facts which would prohibit such application,
for the purpose of the payment of or on account of the principal of or interest
on, the Notes unless, prior to the date on which such application is made by the
Trustee, the Trustee shall be charged with actual notice under Section 7.3(d)
hereof of the facts which would prohibit the making of such application.
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(c) The provisions of this Article VII shall not be applicable to any
cash, properties or securities received by the Trustee or by any holder when
received as a holder of Senior Debt and nothing in Section 7.1 of the Indenture
or elsewhere in this Indenture shall deprive the Trustee or such holder of any
of its rights as such holder.
(d) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment of
money to or by the Trustee in respect of the Notes pursuant to the provisions of
this Article VII. The Trustee, subject to the provisions of Section 7.1 of the
Indenture, shall be entitled to assume that no such fact exists unless the
Company or any holder of Senior Debt or any trustee therefor has given notice
thereof to the Trustee. Notwithstanding the provisions of this Article VII or
any other provisions of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any fact which would prohibit the making of any
payment of moneys to or by the Trustee in respect of the Notes pursuant to the
provisions in this Article VII, unless, and until three Business Days after the
Trustee shall have received written notice thereof from the Company or any
holder or holders of Senior Debt or from any trustee therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.1 of the Indenture, shall be entitled in all respects conclusively to
assume that no such facts exist; provided that if on a date not less than three
Business Days immediately preceding the date upon which, by the terms hereof,
any such moneys may become payable for any purpose (including, without
limitation, the principal of or interest on any Note), the Trustee shall not
have received with respect to such moneys the notice provided for in this
Section 7.3(d), then anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
moneys and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date.
The Trustee shall be entitled to conclusively rely on the delivery to it of
a written notice by a person representing himself to be a holder of Senior Debt
(or a trustee on behalf of such holder) to establish that such notice has been
given by a holder of Senior Debt (or a trustee on behalf of any such holder or
holders). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article VII, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article VII, and, if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment; nor shall the Trustee be
charged with knowledge of the curing or waiving of any default of the character
specified in Section 7.2 hereof or that any event or any condition preventing
any payment in respect of the Notes shall have ceased to exist, unless and until
the Trustee shall have received written notice to such effect.
(e) The provisions of this Section 7.3 applicable to the Trustee shall
(unless the context requires otherwise) also apply to any Paying Agent for the
Company.
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SECTION 7.4 Reliance by Senior Debt on Subordination Provisions.
Each holder of any Note by his acceptance thereof acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration for each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior Debt, and
such holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt. Notice of any default in the payment of any Senior
Debt, except as expressly stated in this Article VII, and notice of acceptance
of the provisions hereof are hereby expressly waived. Except as otherwise
expressly provided herein, no waiver, forbearance or release by any holder of
Senior Debt under such Senior Debt or under this Article VII shall constitute a
release of any of the obligations or liabilities of the Trustee or holders of
the Notes provided in this Article VII.
SECTION 7.5 No Waiver of Subordination Provisions.
Except as otherwise expressly provided herein, no right of any present or
future holder of any Senior Debt to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of, or notice to, the Trustee or the holders of the Notes, without
incurring responsibility to the holders of the Notes and without impairing or
releasing the subordination provided in this Article VII or the obligations
hereunder of the holders of the Notes to the holders of Senior Debt, do any one
or more of the following: (i) change the manner, place or terms of payment of,
or renew or alter, Senior Debt, or otherwise amend or supplement in any manner
Senior Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise dispose of
any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release
any person liable in any manner for the collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company or any other
person.
SECTION 7.6 Trustee's Relation to Senior Debt.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article VII in respect of any Senior Debt at any time held by
it, to the same extent as any holder of Senior Debt, and nothing in Section 7.1
of the Indenture hereof or elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations, as are
specifically set forth in this Article VII, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not owe any fiduciary duty to
the holders of Senior Debt but shall have only such obligations to such holders
as are expressly set forth in this Article VII.
Each holder of a Note by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article VII and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding up or liquidation or reorganization under any
applicable bankruptcy law of the Company (whether in bankruptcy, insolvency or
receivership proceedings or otherwise), the timely filing of a claim for the
unpaid balance of such holder's Notes in the form required in such proceedings
and the causing of such claim to be approved. If the Trustee does not file a
claim or proof of debt in the form required in such proceedings prior to 30 days
before the expiration of the time to file such claims or proofs, then any holder
or holders of Senior Debt or their representative or representatives shall have
the right to demand, sue for, collect, receive and receipt for the payments and
distributions in respect of the Notes which are required to be paid or delivered
to the holders of Senior Debt as provided in this Article VII and to file and
prove all claims therefor and to take all such other action in the name of the
holders or otherwise, as such holders of Senior Debt or representative thereof
may determine to be necessary or appropriate for the enforcement of the
provisions of this Article VII.
SECTION 7.7 Other Provisions Subject Hereto.
Expect as expressly stated in this Article VII, notwithstanding anything
contained in this Indenture to the contrary, all the provisions of this
Indenture and the Notes are subject to the provisions of this Article VII.
However, nothing in this Article VII apply to or adversely affect the claims of,
or payment to, the Trustee pursuant to Sections 7.7 of the Indenture.
Notwithstanding the foregoing, the failure to make a payment on account of
principal of or interest on the Notes by reason of any provision of this Article
VII shall not be construed as preventing the occurrence of an Event of Default
under Section 2.2 of this Supplemental Indenture.
ARTICLE VIII
RIGHT TO REQUIRE REPURCHASE
SECTION 8.1 Designated Event Repurchase Right.
(a) Upon the occurrence of a Designated Event, each holder of
Securities shall have the right, in accordance with this Section 8.2 and Section
8.2 hereof, to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such holder's Securities pursuant to
the terms of Section 8.2 (the "Designated Event Repurchase") at a purchase
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price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest thereon up to but not including the Designated Event Payment Date (the
"Designated Event Payment").
(b) Within 30 days following any Designated Event, the Company each
holder the notice provided by Section 8.2(e).
SECTION 8.2 Designated Event Repurchase Procedures.
(a) In the event that, pursuant to Section 8.2 hereof, the Company
shall commence a Designated Event Repurchase, the Company shall follow the
procedures in this Section 8.2.
(b) The Designated Event Repurchase shall be made pursuant to an offer
that remains open for a period specified by the Company which shall be no less
than 30 days and no more than 40 days following the date of the mailing of
notice in accordance with Section 8.2(e) hereof (the "Commencement Date"),
except to the extent that a longer period is required by applicable law (the
"Tender Period"). Upon the expiration of the Tender Period (the "Designated
Event Payment Date"), the Company shall purchase the principal amount of
Securities required to be purchased pursuant to Section 8.2 hereof (the
"Repurchase Amount").
(c) If the Designated Event Payment Date is on or after an interest
payment record date and on or before the related interest payment date, any
accrued interest will be paid to the person in whose name a Note is registered
at the close of business on such record date, and no additional interest will be
payable to Noteholders who tender Securities pursuant to the Designated Event
Repurchase.
(d) The Company shall provide the Trustee with notice of the
Designated Event Repurchase at least ten days before the Commencement Date.
(e) On or before the Commencement Date, the Company or the Trustee (at
the expense of the Company) shall send, by first class mail, a notice to each of
the Noteholders, which shall govern the terms of the Designated Event Repurchase
and shall state:
(i) that the Designated Event Repurchase is being made pursuant to
this Section 8.2 and Section 8.2 hereof and that all Securities tendered
will be accepted for payment;
(ii) the Designated Event Payment, the Tender Period (specifying
particularly the last day on which Securities may be tendered for purchase)
and the Designated Event Payment Date;
(iii) that any Note or portion thereof not tendered or accepted
for purchase will continue to accrue interest;
27
<PAGE>
(iv) that, unless the Company defaults in the payment of the
Designated Event Payment, any Note or portion thereof accepted for purchase
pursuant to the Designated Event Repurchase shall cease to accrue interest
after the Designated Event Payment Date;
(v) that Noteholders electing to have a Note or portion thereof
purchased pursuant to any Designated Event Repurchase will be required to
surrender the Note, with the form entitled "Option of Noteholder To Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Designated Event Payment Date;
(vi) that Noteholders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Designated Event Payment Date, or such
longer period as may be required by law, a letter or a telegram, telex or
facsimile transmission (receipt of which is confirmed and promptly followed
by a letter) setting forth the name of the Noteholder, the principal amount
of the Note or portion thereof the Noteholder delivered for purchase and a
statement that such Noteholder is withdrawing his election to have the Note
or portion thereof purchased;
(vii) that Noteholders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof; and
(viii) any other procedures that Noteholders must follow in order to
have their Notes repurchased.
In addition, the notice shall contain all instructions and materials that
the Company shall reasonably deem necessary to enable such Noteholders to tender
Notes pursuant to the Designated Event Repurchase.
Each Noteholder electing to have a Note or portion thereof purchased shall
comply with the procedures set forth in the notice.
(f) At least one Business Day prior to the Designated Event Payment
Date, the Company shall irrevocably deposit with the Trustee or a Paying Agent
in immediately available funds an amount equal to the Repurchase Amount to be
held for payment in accordance with the terms of this Section 8.2. On the
Designated Event Payment Date, the Company shall, to the extent lawful, (i)
accept for purchase the Securities or portions thereof tendered pursuant to the
Designated Event Repurchase, (ii) deliver or cause to be delivered to the
Trustee Securities so accepted and (iii) deliver to the Trustee an Of ficers'
Certificate stating such Securities or portions thereof have been accepted for
payment by the Company in accordance with the terms of this Section 8.2. The
Paying Agent shall promptly (but in any case not later than ten (10) calendar
days after the Designated Event Payment Date) mail or deliver to each tendering
Noteholder an amount equal to the purchase price
28
<PAGE>
of the Securities tendered by such Noteholder, and the Trustee shall promptly
authenticate and mail or deliver to such Noteholders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered, if any;
provided, that each new Note shall be in a principal amount of $1,000 or an
integral multiple thereof. Any Securities not so accepted shall be promptly
mailed or delivered by or on behalf of the Company to the holder thereof. The
Company will publicly announce the results of the Designated Event Repurchase
on, or as soon as practicable after, the Designated Event Payment Date.
(g) The Designated Event Repurchase shall be made by the Company in
compliance with all applicable provisions of the Exchange Act, and all
applicable tender offer rules promulgated thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Conflict of Any Provision of Indenture with Trust Indenture Act of
1939.
If and to the extent that any provision of this Supplemental Indenture
limits, qualifies or conflicts with another provision included in this
Supplemental Indenture or in the Indenture which is required to be included
herein or therein by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939, as amended, such required provision shall control.
SECTION 9.2 New York Law to Govern.
THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE DEEMED TO BE CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE
WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID STATE.
SECTION 9.3 Counterparts.
This Supplemental Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 9.4 Effect of Headings.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
29
<PAGE>
SECTION 9.5 Severability of Provisions.
In case any provision in this Supplemental Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 9.6 Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the parties
hereto shall bind their respective successors and assigns and inure to the
benefit of their respective successors and assigns, whether so expressed or not.
SECTION 9.7 Benefit of Supplemental Indenture.
Nothing in this Supplemental Indenture, express or implied, shall give to
any Person, other than the parties hereto, any Security Registrar, any Paying
Agent and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Supplemental
Indenture.
SECTION 9.8 Acceptance by Trustee.
The Trustee accepts the amendments to the Indenture effected by this
Supplemental Indenture and agrees to execute the trusts created by the Indenture
as hereby amended, but only upon the terms and conditions set forth in the
Indenture. Without limiting the generality of the foregoing, the Trustee assumes
no responsibility for the correctness of the recitals contained herein, which
shall be taken as the statements of the Company and except as provided in the
Indenture the Trustee shall not be responsible or accountable in any way
whatsoever for or with respect to the validity or execution or sufficiency of
this Supplemental Indenture and the Trustee makes no representation with respect
thereto.
SECTION 9.9 Ratification of Indenture; Supplemental Indenture Controls; Scope
of Supplemental Indenture.
(a) The Indenture, as supplemented by this Supplemental Indenture,
is in all respects ratified and confirmed, and this Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided. The provisions of this Supplemental Indenture shall, subject
to Section 9.1 hereof, supersede the provisions of the Indenture to the extent
the Indenture is inconsistent herewith.
(b) The changes, modifications and supplements to the Indenture
effected by this Supplemental Indenture shall be applicable only with respect
to, and govern the terms of, the Notes, and shall not apply to any other
Securities which may be issued under the Indenture unless a
30
<PAGE>
supplemental indenture with respect to such other Securities specifically
incorporates such changes, modifications and supplements.
31
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first above written.
MAIL-WELL, INC.
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-----------------------------------
Name:
Title:
32
<PAGE>
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
A-1
<PAGE>
No. Cusip No.
-------------- ---------
$
---------
MAIL-WELL, INC.
[ ]% CONVERTIBLE SUBORDINATED NOTE
DUE 2002
Mail-Well, Inc., a Colorado corporation (the "Company") promises to pay to
_______________________________________________ or registered assigns, the
principal sum [indicated on Schedule A hereof]* [of __________ Dollars]** on
November 1, 2002.
Interest Payment Dates: May 1 and November 1,
commencing May 1, 1998
Record Dates: April 15 and October 15
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
_____________________
* Applicable to Global Securities only.
** Applicable to certificated Securities only.
IN WITNESS WHEREOF, Mail-Well, Inc. has caused this Note to be signed
manually or by facsimile by its duly authorized officer and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
A-2
<PAGE>
Dated: __________________
MAIL-WELL, INC.
By: _____________________________________
[Seal]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the [ ]%
Convertible Subordinated Notes
due 2002 described in the
within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee,
By: _____________________________
Authorized Officer
A-3
<PAGE>
[FORM OF REVERSE OF NOTE]
MAIL-WELL, INC.
[ ]% Convertible Subordinated Note Due 2002
1. Interest. Mail-Well, Inc. a Colorado corporation (the "Company"), is the
issuer of this [ ]% Convertible Subordinated Note due 2002 (the "Note"). The
Company promises to pay interest on the Notes in cash semiannually on each May 1
and November 1, commencing on May 1, 1998, to holders of record on the
immediately preceding April 15 and October 15.
Interest on the Notes will accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from November __, 1997.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. To the extent lawful, the Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
rate borne by the Notes, compounded annually.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the persons who are registered holders of the Notes at
the close of business on the record date for the next interest payment date even
though Notes are cancelled after the record date and on or before the interest
payment date. The Noteholder hereof must surrender Notes to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal and interest by
check payable in such money. It may mail an interest check to a holder's
registered address. However, payments to the Depository Trust Company ("DTC")
will be made by wire transfer of immediately available funds to DTC or its
nominee.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior notice to any
Noteholder. The Company or any of its Affiliates may act in any such capacity.
4. Indenture. The Company issued the Notes under an indenture, dated as of
November __, 1997, as amended by the Supplemental Indenture of even date
therewith (as so amended, the "Indenture"), between the Company and The Bank of
New York, as Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of the
Indenture. The Notes are subject to, and qualified by, all such terms, certain
of which are summarized hereon, and Noteholders are referred to the Indenture
and such Act for a statement of such terms. The Notes are unsecured obligations
of the Company limited to (except as otherwise provided in the Indenture) up to
an aggregate principal amount of (a) $150,000,000 plus (b) such additional
principal amount (which
A-4
<PAGE>
may not exceed $22,500,000 principal amount) of Notes as shall be purchased by
the Underwriters on the Second Closing Date pursuant to the Underwriters
Agreement. The Notes are subordinated in right of payment to all existing and
future Senior Debt of the Company as provided in the Indenture. Any holder of
this Note shall be deemed to have agreed to and be bound by all the terms and
conditions contained in the Indenture applicable to a holder of a Note.
5. Optional Redemption. The Notes are not subject to redemption at the
Company's option prior to November 1, 2000. On such date and thereafter, the
Notes will be subject to redemption at the option of the Company, in whole or in
part (in any integral multiple of $1,000), upon not less than 15 nor more than
60 days prior notice by mail at the following redemption prices (expressed as
percentages of the principal amount set forth below), if redeemed during the 12-
month period beginning November 1 of the years indicated:
Redemption
Year Price
---- -----
2000 .................................. %
2001 .................................. %
2002 .................................. %
, in each case together with accrued interest up to but not including the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on an interest payment date). On or after
the redemption date, interest will cease to accrue on the Notes, or portion
thereof, called for redemption.
6. Notice of Redemption. Notice of redemption will be mailed at least 15
days but not more than 60 days before the redemption date to each holder of the
Notes to be redeemed at his address of record. The Notes in denominations larger
than $1,000 may be redeemed in part but only in integral multiples of $1,000. In
the event of a redemption of less than all of the Notes, the Notes will be
chosen for redemption by the Trustee in accordance with the Indenture. Unless
the Company defaults in making such redemption payment, or the Paying Agent is
prohibited from making such payment pursuant to the Indenture, interest ceases
to accrue on the Notes or portions of them called for redemption on and after
the redemption date.
If this Note is redeemed subsequent to a record date with respect to any
interest payment date specified above and on or prior to such interest payment
date, then any accrued interest will be paid to the person in whose name this
Note is registered at the close of business on such record date.
7. Mandatory Redemption. The Company will not be required to make mandatory
redemption payments with respect to the Notes. There are no sinking fund
payments with respect to the Notes.
A-5
<PAGE>
8. Repurchase at Option of Holder. If there is a Designated Event, the
Company shall be required to offer to purchase on the Designated Event Payment
Date all outstanding Notes at a purchase price equal to 101% of the principal
amount thereof on the date of purchase, plus accrued and unpaid interest to the
Designated Event Payment Date. Holders of Notes that are subject to an offer to
purchase will receive a notice of a Designated Event Repurchase from the Company
prior to any related Designated Event Payment Date and may elect to have such
Notes or portions thereof in authorized denominations purchased by completing
the form entitled "Option of Noteholder To Elect Purchase" appearing below.
Noteholders have the right to withdraw their election by delivering a written
notice of withdrawal to the Paying Agent in accordance with the terms of the
Indenture.
9. Subordination. The payment of the principal of, interest on or any other
amounts due on the Notes is subordinated in right of payment to all existing and
future Senior Debt of the Company, as described in the Indenture. Each
Noteholder, by accepting a Note, agrees to such subordination and authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
as its attorney-in-fact for such purpose.
10. Conversion. The holder of any Note has the right, exercisable at any
time after 60 days following the date of original issuance thereof and prior to
the close of business (New York time) on the date of the Note's maturity, to
convert the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into shares of Common Stock at the initial Conversion Price
of $[ ] per share, subject to adjustment under certain circumstances, except
that if a Note is called for redemption, the conversion right will terminate at
the close of business on the Business Day immediately preceding the date fixed
for redemption.
To convert a Note, a holder must (1) complete and sign a notice of election
to convert substantially in the form set forth below, (2) surrender the Note to
a Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax, if required. Upon conversion, no adjustment or payment will be made
for interest or dividends, but if any Noteholder surrenders a Note for
conversion on or after an interest payment record date and on or before the
related interest payment date, then, notwithstanding such conversion, the
interest payable on such interest payment date will be paid to the registered
holder of such Note on such record date. In such event, such Note, when
surrendered for conversion, must be accompanied by payment in funds acceptable
to the Company of an amount equal to the interest payable on such interest
payment date on the portion so converted. The number of shares of Common Stock
issuable upon conversion of a Note is determined by dividing the principal
amount of the Note converted by the Conversion Price in effect on the Conversion
Date. No fractional shares will be issued upon conversion but a cash adjustment
will be made for any fractional interest.
A Note in respect of which a holder has delivered an "Option of Noteholder
to Elect Purchase" form appearing below, exercising the option of such holder to
require the Company to
A-6
<PAGE>
purchase such Note, may be converted only if the notice of exercise is withdrawn
as provided above and in accordance with the terms of the Indenture. The above
description of conversion of the Notes is qualified by reference to, and is
subject in its entirety by, the more complete description thereof contained in
the Indenture.
11. Denominations, Transfer, Exchange. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered, and Notes may be exchanged' as provided
in the Indenture. The Registrar may require a Noteholder, 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 Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption (except the unredeemed portion of any Note being redeemed in part).
Also, it need not exchange or register the transfer of any Note for a period of
15 days before a selection of Notes to be redeemed.
12. Persons Deemed Owners. Except as provided in paragraph 2 of this Note,
the registered Noteholder of a Note may be treated as its owner for all
purposes.
13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its request. After that, Noteholders of Notes
entitled to the money must look to the Company for payment, unless an abandoned
property law designates another person, and all liability of the Trustee and the
Paying Agent with respect to such money shall cease.
14. Defaults and Remedies. The Notes shall have the Events of Default as
set forth in the Indenture. Subject to certain limitations in the Indenture, if
an Event of Default occurs and is continuing, the Trustee by notice to the
Company or the Noteholders of at least 25% in aggregate principal amount of the
then outstanding Notes by notice to the Company and the Trustee may declare all
the Notes to be due and payable immediately, except that in the case of an Event
of Default arising from certain events of bankruptcy or insolvency, all unpaid
principal and interest accrued on the Notes shall become due and payable
immediately without further action or notice. Upon acceleration as described in
either of the preceding sentences, the subordination provisions of the Indenture
preclude any payment being made to Noteholders for at least 5 days except as
otherwise provided in the Indenture.
The Noteholders of a majority in principal amount of the Notes then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of a redemption payment or the Repurchase Amount principal or
interest that has become due solely because of the acceleration. Noteholders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Noteholders of a majority in principal amount of
the then outstanding Notes issued under the Indenture may direct the Trustee in
its exercise of any trust or power. The Company must furnish compliance
certificates to the Trustee annually. The above description of Events of Default
and remedies is qualified by
A-7
<PAGE>
reference to, and subject in its entirety by, the more complete description
thereof contained in the Indenture.
15. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Noteholders of at least a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or
exchange offer for Notes), and any existing default may be waived with the
consent of the Noteholders of a majority in principal amount of the then
outstanding Notes including consents obtained in connection with a tender offer
or exchange offer for Notes. Without the consent of any Noteholder, the
Indenture or the Notes may be amended, among other things, to cure any
ambiguity, defect or inconsistency, to provide for assumption of the Company's
obligations to Noteholders, to make any change that does not adversely affect
the rights of any Noteholder and to comply with the requirements of the SEC in
order to maintain the qualification of the Indenture under the Trust Indenture
Act.
16. Trustee Dealings with the Company. The Trustee, in its individual or
any other capacity, may become the owner or pledgee of Notes and may otherwise
deal with the Company or an Affliate with the same rights it would have if it
were not Trustee, subject to certain limitations provided for in the Indenture
and in the Trust Indenture Act. Any Agent may do the same with like rights.
17. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Noteholder, by accepting a Note, waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the Notes.
18. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE NOTES, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
19. Authentication. The Notes shall not be valid until authenticated by
the manual signature of an authorized officer of the Trustee or an
authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (for tenants in common), TEN ENT
(for tenants by the entireties), JT TEN (for joint tenants with right of
survivorship and not as tenants in common), CUST (for Custodian), and U/G/M/A
(for Uniform Gifts to Minors Act).
21. Definitions. Capitalized terms not defined in this Note have the
meaning given to them in the Indenture.
A-8
<PAGE>
The Company will furnish to any Noteholder of the Notes upon written
request and without charge a copy of the Indenture. Request may be made to:
Mail-Well, Inc.
23 Inverness Way East, Suite 160
Englewood, Colorado 80112
Attention: Chief Financial Officer
A-9
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Date: ___________________
Signature Guarantee: *** _______________________________________________________
_______________________
* **Signature must be Guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
A-10
<PAGE>
OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof repurchased
by the Company pursuant to Article VIII of the Supplemental Indenture, check the
box: [ ]
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased: ______________
Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Date: ______________________________
Signature Guarantee: * ________________________________
_________________________
*Signature must be guaranteed by a commercial bank, trust company or member firm
of the New York Stock Exchange.
A-12
<PAGE>
ELECTION TO CONVERT
To Mail-Well, Inc.
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion below designated, into Common Stock
of MAIL-WELL, INC. in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned, unless a different name has been indicated
in the assignment below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Date:
To be converted in whole [ ] Portions of Note to be converted ($ 1,000 or
integral multiples thereof): $______________
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other identifying Number
Signature Guarantee: * ________________________
______________________
*Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
A-13
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF ROTHGERBER, APPEL, POWERS & JOHNSON LLP APPEARS HERE]
November 7, 1997
Mail-Well, Inc.
23 Inverness Way, Suite 160
Englewood, Colorado 80112
Ladies and Gentlemen:
We have acted as counsel to Mail-Well, Inc., a Colorado corporation
(the "Company"), in connection with the preparation of the Registration
Statement on Form S-3 (the "Registration Statement") filed with the Securities
and Exchange Commission (the "Commission") on or about September 24, 1997 and
amended on October 30, 1997 and November 10, 1997. The Registration Statement
relates to the issuance and sale from time to time, pursuant to Rule 415 of the
General Rules and Regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), of the following securities with an aggregate initial
offering price of up to $300,000,000 (or the equivalent thereof, based on the
applicable exchange rate at the time of sale, in one or more foreign currencies,
currency units or composite currencies as shall be designated by the Company):
(i) shares of the Company's Common Stock, $.01 par value per share ("Common
Stock"); (ii) whole or fractional shares of the Company's Preferred Stock, $.01
par value per share (collectively, "Preferred Stock"); (iii) Preferred Stock
represented by depository shares ("Depository Shares"); (iv) the Company's debt
securities (the "Debt Securities"), which may be issued under the Senior
Subordinated Debt Indenture, between the Company and a trustee to be named in an
applicable Prospectus Supplement (the "Senior Subordinated Indenture") or under
the Subordinated Debt Indenture, between the Company and a trustee to be named
in an applicable Prospectus Supplement (the "Subordinated Indenture" and,
together with the Senior Subordinated Indenture, the "Indentures"); (v) warrants
to purchase Common Stock (the "Common Stock Warrants"); (vi) warrants to
purchase Preferred Stock ("Preferred Stock Warrants"); and (vii) warrants to
purchase Debt Securities ("Debt Warrants" and collectively with the Common Stock
Warrants and the Preferred Stock Warrants, the "Warrants"). As amended on
October 30, 1997, the Registration Statement relates to a specific offering of
$150,000,000 aggregate principal amount of Convertible Subordinated Notes due
2002 (the "Notes") to be issued under an indenture between the Company and The
Bank of New York, as trustee (the "Indenture") as supplemented by an indenture
supplement to be executed simultaneously therewith (the "Indenture Supplement.")
(The Indenture and Indenture Supplement are collectively referred to herein as
the "Note Indenture.") We do not express any opinion herein as to the issuance
of Debt Securities under any indenture other than the Note Indenture. This
opinion is furnished in accordance with the requirements of Item 601(b)(5) of
Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of: (i) the Registration
Statement filed with the Commission on September 24, 1997 under the Act as
amended on October 30, 1997 and November 10, 1997; (ii) the form of the Note
Indenture proposed to be entered into
<PAGE>
Mail-Well, Inc.
September 24, 1997
Page 2
by the Company; (iii) the form of underwriting agreement (the "Note Underwriting
Agreement") proposed to be entered into by the Company and the underwriters
named therein in connection with the Offering of the Notes; (iv) the Articles of
Incorporation of the Company as in effect on the date hereof; (v) the By-laws of
the Company as in effect on the date hereof; and (vi) resolutions adopted by the
Board of Directors of the Company (the "Board"), authorizing the issuance and
sale of the Notes (the "Board Resolutions"). We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and others, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed by parties other than the
Company, we have assumed that such parties have the power, corporate or other,
to enter into and perform all obligations thereunder and have also assumed the
due authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof. As to any facts material to the opinions expressed herein that were
not independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Company and others.
Members of our firm are admitted to the bar in the State of Colorado, and
we do not express any opinion as to the laws of any other jurisdiction. This
opinion is limited to the laws, including the rules and regulations, as in
effect on the date hereof.
Based upon and subject to the foregoing, we are of the opinion that:
1. When (i) the Registration Statement shall have become effective under
the Act, (ii) the Blue Sky or securities laws of certain states shall have been
complied with, (iii) the Note Underwriting Agreement with respect to the Notes
has been duly executed and delivered by the Company and the other parties
thereto, (iv) the Note Indenture shall have been duly executed and delivered by
the Company and the Trustee and duly qualified under the Trust Indenture Act of
1939, as amended, (v) the terms of the Notes
<PAGE>
Mail-Well, Inc.
September 24, 1997
Page 3
shall have been duly established by the Board, or any appropriate Committee
appointed thereby, in conformity with the Note Indenture so as not to violate
any applicable law or the Articles of Incorporation or By-laws of the Company or
result in default under or breach of any agreement or instrument binding upon
the Company and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company, and (vi)
the Notes shall have been duly authorized, executed, authenticated and delivered
against payment therefor in accordance with the Note Indenture and Note
Underwriting Agreement, the Notes shall constitute binding obligations of the
Company enforceable in accordance with their terms, except as enforceability may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a proceeding of law or in
equity). In addition, when and if the Notes are converted into Common Stock in
accordance with their terms and the terms of the Note Indenture such Common
Stock shall be validly issued, fully paid and nonassessable.
<PAGE>
Mail-Well, Inc.
September 24, 1997
Page 5
To the extent that the obligations of the Company under an Indenture may be
dependent upon such matters, we have assumed for purposes of this opinion (i)
that the trustee is duly
<PAGE>
Mail-Well, Inc.
September 24, 1997
Page 6
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified to engage in the activities
contemplated by the Note Indenture, (ii) that the Note Indenture has been duly
authorized, executed and delivered by and constitute the legal, valid and
binding obligation of the trustee, enforceable in accordance with its respective
terms, (iii) that the trustee, is in compliance, generally and with respect to
acting as a trustee, under the Note Indenture with all applicable laws and
regulations, and (iv) that the trustee has the requisite organizational and
legal power and authority to perform its obligations under the Note Indenture.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the Registration Statement. In giving
this consent, we do not thereby admit that we are included in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Sincerely yours,
ROTHGERBER, APPEL, POWERS & JOHNSON LLP
/s/ Rothgerber, Appel, Powers & Johnson LLP
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 333-36337 of Mail-Well, Inc. on Form S-3 of our
reports dated February 10, 1997, appearing in the Annual Report on Form 10-K of
Mail-Well, Inc. for the year ended December 31, 1996 and to the reference to us
under the heading "Experts" in the Prospectus, which is part of such
Registration Statement.
/s/ Deloitte & Touche, LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
November 7, 1997
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO
RULE 901(d) OF REGULATION S-T
================================================================================
Exhibit 25.2
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
MAIL-WELL, INC.
(Exact name of obligor as specified in its charter)
Colorado 84-1250533
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
23 Inverness Way, Suite 160
Englewood, Colorado 80112
(Address of principal executive offices) (Zip code)
______________________
% Convertible Subordinated Notes Due 2002
(Title of the indenture securities)
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO
RULE 901(d) OF REGULATION S-T
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.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Name Address
- ---------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 5th day of November, 1997.
THE BANK OF NEW YORK
By: /s/ Mary Beth A. Lewicki
_______________________________
Name: Mary Beth A. Lewicki
Title: Assistant Vice President
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 7,769,502
Interest-bearing balances............. 1,472,524
Securities:
Held-to-maturity securities........... 1,080,234
Available-for-sale securities......... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell....... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,352,045
LESS: Allowance for loan and
lease losses ..............625,042
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts......... 1,611,096
Premises and fixed assets (including
capitalized leases)................... 676,729
Other real estate owned................. 22,460
Investments in unconsolidated
subsidiaries and associated
companies............................. 209,959
Customers' liability to this bank on
acceptances outstanding............... 1,357,731
Intangible assets....................... 720,883
Other assets............................ 1,627,267
-----------
Total assets............................ $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices................... $26,875,596
Noninterest-bearing ......11,213,657
Interest-bearing .........15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 16,334,270
Noninterest-bearing .........596,369
Interest-bearing .........15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury.............................. 303,000
Trading liabilities..................... 1,308,173
Other borrowed money:
With remaining maturity of one year
or less............................. 2,383,570
With remaining maturity of more than
one year through three years............ 0
With remaining maturity of more than
three years......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding................. 1,377,244
Subordinated notes and debentures....... 1,018,940
Other liabilities....................... 1,732,792
-----------
Total liabilities....................... 52,937,421
-----------
EQUITY CAPITAL
Common stock............................ 1,135,284
Surplus................................. 731,319
Undivided profits and capital
reserves.............................. 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities............................ 1,948
Cumulative foreign currency transla-
tion adjustments...................... ( 12,272)
-----------
Total equity capital.................... 4,577,537
-----------
Total liabilities and equity
capital ........................... $57,514,958
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
**
Alan R. Griffith *
J. Carter Bacot *
Thomas A. Renyi * Directors
**
- --------------------------------------------------------------------------------
4
